LOS ANGELES (Reuters) - As the ink dried on a tentative deal between directors and studios, the big question swirling around Hollywood on Thursday was whether it would bring striking writers back to the negotiating table.
The studios’ tentative three-year labor pact with the Directors Guild of America (DGA) includes provisions to pay union members more for work distributed over the Web, which has been a key issue in the 10-week-old strike by the Writers Guild of America (WGA).
“At the end of the day, this proposal should bring the writers back to the table. It falls short in some significant ways of what writers are looking for, but it’s unlikely they’ll achieve any gains beyond what the DGA has achieved,” said Jonathan Handel, entertainment attorney with TroyGould and a former WGA counsel.
The writers said on Thursday they would evaluate the DGA deal, which directors said more than doubled fees earned on Web downloads to 0.7 percent of gross revenues on TV shows and raised fees by 80 percent to 0.65 percent for feature-films.
The writers’ union has sought 2.5 percent of gross revenue. “The writers are asking for four to five times as much as what the directors received and I think this is going to be a hard-fought area,” Handel said.
For ad-supported content streamed on the Web, directors also agreed to lower terms than writers have sought.
Under the DGA deal, after a 17-day window for free promotional streaming, studios will pay directors 3 percent of the residual base, or about $600 for a network prime-time one-hour drama, for 26 weeks of streaming. The writers have been seeking compensation based on viewership.
“The directors will only get a fixed dollar amount, rather than a percentage of the studios’ ad revenues, even if millions of people watch a particular show online and the studios make a lot of money,” Handel said, though he noted the writers’ demands helped influence the directors’ deal.
One network executive involved in the negotiations said the directors’ deal reflected huge concessions by the studios, noting the studios’ bargaining arm, the Alliance of Motion Picture and Television Producers (AMPTP), came up significantly from what it had first offered writers.
“I think it’s safe to say that this is a fair offer for the talent. We’ve set out fair formulas and precedents. This is something we could live with,” said the executive, who declined to be named.
Other industry watchers agreed that the directors’ deal, while not ideal for writers, should set the stage for more productive discussions with the AMPTP. Talks between the two sides collapsed on December 7.
“I think it’s (the DGA deal) is a really great first step. I’m sure there will be people who feel it should be better, but I think it’s a big step forward,” said Ted Cohen, managing partner of Tag Strategic, a digital media advisory firm.
“I think we have to ease into what is a realistic balance between what the market is and what it promises,” said Cohen. “There’s a lot of money to be made in digital media, but we’re not out of the woods on piracy and selling the consumer on the concept of paying for digital content.”
The directors’ deal came five days after contract talks began, following weeks of informal discussions with the studios — and months of economic research by the union — to lay the groundwork for official negotiations.
“Different issues are important to the different guilds. This represents an improvement for directors in certain ways, but falls short of some of the writers’ demands,” said Steven Katleman, an attorney and partner at Greenberg Traurig.
As he and other industry insiders continued to analyze the directors’ deal, many Hollywood insiders expressed hoped it reflected the end was near for a dispute that has paralyzed Hollywood.
“Here is a deal that with some modifications could please the writers and bring the town back to work,” Handel said.
Editing by Braden Reddall