‘Ovitz Wrinkle’ Latest Buzzword to End Strike

The “Ovitz wrinkle” isn’t something that happens to a super-agent’s suit if he lingers too long over lunch at Jimmy’s.

Rather, it is Hollywood’s latest buzzword for an imagined peace plan--details unknown--that Creative Artists Agency officers Michael Ovitz and Bill Haber have supposedly devised to end the Writers Guild of America strike, now in its 20th week.

According to both sides in the dispute, there is no secret plan. But Ovitz and Haber, according to several sources familiar with their efforts, are continuing to serve as the principal intermediaries in informal talks between the guild and producers.

Neither the guild, nor Ovitz, nor the Alliance of Motion Picture Producers has been willing to disclose the finer points of the talks.

But at least some things that have been discussed--without leading closer to a settlement--are clear. They include:

Binding arbitration. About 120 writers sent a petition to the guild and the alliance proposing that the sides submit issues still under dispute to binding arbitration. The guild’s directors, at a Monday afternoon meeting, endorsed the call for arbitration--reiterating a position that chief guild negotiator Brian Walton says he had taken as early as May in private negotiations.

J. Nicholas Counter III, chief negotiator for the alliance, claims arbitration won’t work because the unresolved issues--including a guild demand for increased foreign residuals--are “intertwined and interelated” with tentative agreements on about 75 other issues.

“You can’t just isolate one or two issues . . . (and) I think both sides would agree that it’s inappropriate to go back and arbitrate the size of writers’ credits, the whole creative rights package, a lot of things,” says Counter.

Foreign residuals. In the last formal contract offer, producers gave writers a choice between two formulas. One kept the existing foreign residuals system, which pays a one-time maximum fee that currently runs about $4,400 for a one-hour TV series and increases slightly each year as guild minimums increase; another pays foreign residuals as a percentage of foreign program sales, with a maximum payment at 150% of the current levels.

In private sessions, producers recently offered to let writers switch between the formulas at any time during the contract, depending on which would yield more money for guild members.

Guild negotiators--who have publicly said that the percentage formula would result in immediate rollbacks for many TV writers--didn’t see the proposal as a solution to the standoff. But they said they might be willing to put a cap on their own demand for an additional annual foreign residual.

Under the guild’s new proposition, which was rejected by producers, the demanded annual payment of $637 for a one-hour show would have stopped when it reached an additional 100% of the current foreign residual, for a total maximum of $8,800.

Basic cable. According to several sources, the producers expressed at least some willingness to give the guild its first agreement covering programs made for basic cable services such as the Arts & Entertainment Network and the USA Network in order to break the bargaining impasse. Currently, such programs are occasionally covered by guild agreements, but only on a case-by-case basis. Guild negotiators, according to the sources, didn’t see the proposal as sufficient to end the strike.

Contract term. The sides have discussed stretching the term of a new contract to five years. The last guild contract ran for three years, and the latest formal producers’ offer would have had a four-year term. It isn’t clear whether either side would benefit more than the other from a longer term. But a five-year agreement would obviously provide a long cooling-off period before they meet again.

Program fee. Frank Cardea Jr. and George Schenck--both of whom joined 19 other writers in filing an unfair labor practices charge against the guild last week--early in July proposed to Walton that the guild find something to swap for the foreign residuals they want from the producers.

Cardea and Schenck specifically proposed that staff writers for TV shows might be willing to give up some portion of the “program fee”--a small per-episode payment made to staff writers--to balance out the money that producers would pay by hiking foreign residuals. The proposition would, in theory, have let companies pay the new residual without establishing a pattern for other guilds, since the program fee is unique to writers.

Cardea and Schenck, speaking publicly at a meeting of dissident writers last week, said Walton seemed interested in the proposal, but didn’t believe it would prove acceptable to producers or to the producer-writers who would be sacrificing the fee.

One source close to the recent talks claimed that the guild did in fact bring the idea before the producers, who weren’t interested.