DAY FIVE TALKS: ENCOURAGEMENT, QUESTIONS, HAGGLING AND BAD MATH (VAR, DHD)

By Nancy Vialatte

Although yesterday�s resumption of talks between the WGA and the AMPTP went smoothly, there remain key differences and mounting fears that time is running out. The talks will resume today.

Tuesday�s talks focused mostly on Web streaming as the WGA presented a counteroffer to last week�s proposal by the AMPTP, writes Variety. A source close to the talks said the session was encouraging and more productive than previous sessions as writers presented their tiered usage plan.

However, the WGA said the AMPTP�s math was deeply flawed when the companies estimated that scribes would see a $130 million increase in total compensation over three years. The writers concluded it would be more like $32 million. (VAR)

Given the writers� suspicions about Hollywood bookkeeping, part of the problem is that the producers have not revealed their methods for estimating their figures.

But when the WGA presented its counterproposal, the studios and networks did not reject the proposal out of hand.

One source described the queries as being respectful and, in another sign of possible progress, reps for both sides discussed the proposal informally at a sidebar, according to Variety.

The WGA�s proposal -- based on how many times a program is viewed -- for Internet streaming of TV dramas came in response to the fixed annual $250 residual offered last week by the AMPTP. (VAR)

CAA partner Bryan Lourd attended the talks, which were held at an undisclosed location.

The skepticism about the AMPTP�s numbers were contained in a report to WGA members released during the negotiating session by negotiating committee chief John Bowman.

Bowman wrote:

The latest WGA proposal would cost the companies $151 million over three years. It is reasonable, serious, and easily affordable. For instance, it would cost Sony only $1.68 million per year. Paramount and CBS would each pay only $4.66 million per year. MGM would pay only $320,000 per year.

The AMPTP claims its proposal would give us $130 million over three years. Our analysis � and again, please visit the website to see for yourself � tells us their offer is worth only $32 million. But if you factor in the companies� regressive proposal on �promotional use� (streaming TV shows and feature films in their entirety for free) writers could potentially lose $100 million in income over the course of this contract.

So while we don�t see how their proposal adds up to anywhere near $130 million, we greet their public willingness to make such an offer with real interest. If the AMPTP is serious about this figure, the WGA is confident we are closer to a deal than anyone has suggested, and we are hopeful that the companies will respond positively to our proposal, which is a serious, reasonable, and affordable attempt to bridge the gap between us.

In response, the AMPTP repeated its own conclusions saying they are sticking by their numbers, adding, �The New Economic Partnership presented by the AMPTP represents a gain of $130 million for writers over the next three years based on projected increases in compensation, benefits and residuals including new media. This is on top of the annual $1.3 billion in payments they currently receive.�

One industry vet told Variety the exchange shows that the sides are �not even speaking the same language.�

Such disagreements likely will try the patience of CEOs of AMPTP�s congloms and may push them to make a �last, best, final� offer to the WGA within the next week or two. And if the WGA rejects that deal, the AMPTP likely would launch negotiations shortly thereafter with the Directors Guild of America.

The guild�s numbers also showed the sides remain nearly $120 million apart on economic terms having calculated that the companies would have to put up an additional $151 million over three years if they agreed to the guild proposal.

The guild costs break down to $33 million in the first year, $50 million in the second year and $68 million in the third year -- a �modest� 3.9% annual increase -- with the top gains coming in Internet re-use ($88 million) and minimum increases ($29 million). (VAR)

The WGA also noted that since 2000, entertainment segment revenue for employers has grown from $63 billion to $95 billion for an annual growth rate of 7%.

Last night, a WGA source told DeadlineHollywoodDaily.com that a �small group� talked about the WGA�s counter-offer. �Questions were exchanged. There was some haggling. This will continue tomorrow.� Said another WGA insider, �Our negotiators have been played so often. But it�s not bad. They�re at least engaged.� And a third party familiar with the talks emailed Nikki Finke, �The tone of �haggle� is it. I�m encouraged today.�

With the strike about to enter its second month, picketing continued at all major lots Tuesday in Los Angeles with temps reaching into the 80s. And in New York, where temps were around freezing with snow squalls, almost 300 strikers braved the cold to picket in front of News Corp.�s HQ. (VAR)

DAY FIVE TALKS: ENCOURAGEMENT, QUESTIONS, HAGGLING AND BAD MATH (VAR, DHD)

By Nancy Vialatte

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