The $21 million contract gap

LOS ANGELES - A relatively small $21 million separates contract proposals disclosed by studios and striking Hollywood writers.

But the difference that matters the most is the one between the $20,000-plus that writers now earn for a single network rerun of a TV episode and the $250 the studios are offering for a year's online use of an hour-long show.

It represents the chasm between the old business order and burgeoning new media that the two sides are confronting as they try to end the strike, now in its fifth week.

The sides continued to bargain yesterday, but a news blackout was expected to keep further details from being released.

The strike has shut down production on dozens of prime-time and late-night shows, sending a number of programs into reruns.

Last Thursday, before negotiations recessed, the Alliance of Motion Picture & Television Producers said it was willing to offer $130 million in extra pay over the life of its proposed three-year deal, on top of the $1.3 billion already paid annually to writers.

The Writers Guild of America countered by saying the proposal only addressed advertising-supported programs streamed for free on the Web and jurisdiction over shows made for the Internet. It said the offer constituted a "massive rollback."

The writers said their plan, also presented Thursday, would cost producers $151 million over three years. Details of that plan were not publicly disclosed.

However, citing an unidentified person close to guild negotiators, the Hollywood Reporter trade publication said the union was proposing fixed compensation rates that also are graduated in increments tied to viewership.

David W. Rips, director of the media and entertainment practice at Deloitte Consulting, said the biggest issue in talks was determining compensation for emerging online and digital platforms.

"I'm surprised producers offered a flat fee at all. . . . I think they're just paying to end the strike," Rips said. "I don't think they would even be tacitly acknowledging that there's any relationship between that payment and real revenue."

At this point, there is not enough information about the value of digital distribution to "have a legitimate negotiation" on compensation, he said. He suggested that the alliance offer was an attempt to shift the decision a few years into a better-informed future.

Patric Verrone, president of the Writers Guild of America, West, accused the alliance of failing to negotiate. "I don't really feel like they're negotiating, and part of how they operate is, the AMPTP allows bottom-line hard-liners to rule the day," Verrone told the Associated Press while visiting picketing writers outside NBC's Burbank studio.

"If any of these companies want to come forward and bargain with us individually, we think we can make a deal," he said.

The alliance, which represents studios, networks and producers, declined to comment. But it struck a conciliatory tone in an "Open Letter to the Entertainment Industry" printed yesterday in trade publications.

A Wall Street analyst said that, if the strike continued into next year, it would begin to affect the first- and second-quarter outlooks for the TV divisions of media conglomerates.

The strike could cost the CBS, ABC and Fox networks a combined $300 million, according to a report from Alan Gould, senior analyst with New York-based Natixis Bleichroeder. The report did not include NBC, which is owned by General Electric Co.

ABC is owned by the Walt Disney Co., Fox is a unit of News Corp., and CBS is a division of CBS Corp.