Networks, studios prep for potential strike by Writers Guild: tech issues create new battlefront for Hollywood producers and 12,000 scribes.

Hollywood writers aren't scheduled to begin talks with the studios and networks until this summer, but the prospect of a strike is already affecting film and TV production schedules.

Faced with the prospect of a walkout that would begin in the fall, the film studios are speeding up production and the TV networks are turning to more cheaper, unscripted fare like reality and game shows.

"This is a nail-biting time," said Jack Kyser, chief economist for the Los Angeles Economic Development Corp. "The industry has an enormous economic impact in Los Angeles County, and when work stops it affects businesses from the lighting houses, star trailers, craft services, sound stages, anyone who makes costumes and even hotels."

Should the Writers Guild and the AMPTP--which represents about 350 producers from studios and networks--fail to reach an agreement before its current contract expires on Oct. 31, it's virtually assured that its 12,000 members would walk. The studios and networks faced a similar strike threat by both actors and writers in 2001, and learned the value of accelerated production schedules.

"They can't turn the lights off and they have time slots to fill," said one industry insider of the networks. "They don't want to lose that audience, so in anticipation they are preparing for a de facto strike."

Many in the entertainment industry remember the crippling 1988 strike that cost the local economy about $1 billion, according to Kyser.

"The impact of 2001 was also huge, but harder to measure in dollars because when the threat of a strike was clear, studios started stockpiling scripts--they remember how bad it was," Kyser said.

The two sides are cutting up a massive economic pie. The most recent PriceWaterhouseCoopers Global Entertainment and Media Outlook predicts that the entertainment economy will expand from an estimated $550 billion in 2005 to roughly $725 billion in 2010. Complicating the situation is the emergence of a myriad of new distribution platforms created by technological advances.

"New media is so incredibly dynamic. That makes it so difficult to deal with," said WGA negotiating committee chair John Bowman. "A big competitive advantage the studios have had was controlling distribution. The Internet takes that away from them, but we face the same thing in that it makes tracking royalties and fees harder."

Bowman said the two biggest issues facing the union are payment for Internet downloads and the guild's right to represent writers for cable and reality programming--something that could bring another 1,000-plus members into the union's fold.

The WGA shunned a November offer from the AMPTP to launch January negotiations, which drew fire from the Nick Counter, president of the Alliance of Motion Picture and Television Producers. He said the new tech issues are so complex that they need to be negotiated as soon as possible. But the scribe tribe wasn't buying it.

"We have done and have to do a lot of research for ourselves before we go into negotiations, so we are sure to know what we are doing before we get to the table," Bowman said. In a field in which technology is changing the terrain so quickly, even a few months might provide time for a clearer download business model emerge, union insiders point out.

The writers' stance was also criticized by the International Alliance of Theatrical Stage Employees, which represents stagehands and technicians. Like the directors and actors unions, their contract will run out after the WGA has begun its talks.

"Early talks would have shown willingness on the part of the WGA to avoid a work stoppage that will almost certainly result from delayed talks," IATSE said in a statement.

Charles Slocum, assistant executive director of the WGA, said that with respect to tackling new media, the guild's first-up position is not one born of choice.

"For better or worse, it's really the happenstance of when issues arise," he said. "The trigger for the controversy right now was "Desperate Housewives" and "Lost" being offered (on iTunes) in October of 2005. It just happed to fall when we were the next up."

Some insiders suggest another potential reason for the writers' refusal to bargain early is the potential that they could eventually bargain jointly with the Screen Actors Guild and the Directors Guild, at least in a de facto sense, a notion WGA representatives didn't dispel.

"We think we are much stronger as a bloc," Bowman said. "Writers can shut down production at some point, but actors and directors can shut down production immediately, in a day."

Bowman said, however, that were the producers to put "a reasonable offer on the table, we'd have a deal."

Hurry up offense

In the approach to the talks, the studios and networks are looking to do things on the cheap, and quickly. The studios are working on accelerated shooting schedules and looking to nonunion productions outside the U.S.

"The networks will be looking for alternatives to expensive scripted programming in the event of a strike," an industry insider said.

A barometer of the networks' success in stock-piling will come this May, when the networks unveil theft content for the upcoming fall season to advertisers. As they look to fill their fall schedules, the networks are likely to cut the number of comedy and drama pilots they order, skip the spring hiatus, renew more shows because it's cheaper than creating new ones and shift talk, news and game shows to primetime.

By ANNE RILEY-KATZ

Staff Reporter