Show May Go on As Hollywood Writers Discuss Deal to End Strike

After three months of canceled awards shows, picket lines at the gates of the Hollywood studios, and TV schedules reduced to reality programs and reruns, striking Hollywood writers appear to be close to a deal with the studios.

Direct talks between the heads of the Fox and Disney studios and representatives of the Writers Guild of America produced a tentative agreement that could be presented to the union's board at the end of this week. The strike, which began on November 3, is thought to be the costliest ever dispute in the film industry, surpassing the estimated $500m cost of the last major dispute, in 1988.

The impetus for an agreement between the two sides was provided by a recent agreement struck between the Directors Guild and the studios, which provided a template for the major area of dispute, payment for digital content. But the possibility of the cancellation of the film industry's biggest showcase of the year, the Oscars, also helped to focus minds. Production on programs for the critical autumn television season, scheduled to begin this month, can now also proceed.

The agreement, which is being finessed by lawyers, increases payments for programs sold online, sets payment levels for content streamed online and allows web-based programs to be unionized.

The dispute initially centered on the level of reimbursement for DVD sales. But that issue was superseded by the grey area of digital payments. The studios argued that the economic model offered for digital downloads on the web, on mobile phones and mobile devices such as iPods was too unproven for them to be able to commit to the payments the writers were demanding. But the agreement thought to have been reached shadows the Directors Guild agreement, which doubled payment for content sold online.

The strike has had a deep effect on all levels of the film industry. Behind-the-scenes workers such as make-up artists, set builders, drivers, caterers and agents have all seen their employment dry up as studios have suspended production. Several high-profile films were suspended or failed to begin shooting as union rules banning writers' input to scripts in production took effect. Warner Bros canceled shooting on the adaptation of Shantaram, starring Johnny Depp; shooting on Sacha Baron Cohen's follow-up to Borat was canceled due to a lack of writers; the Da Vinci Code sequel suffered a similar fate, while films starring Brad Pitt, Tom Cruise and Bruce Willis have all been affected.

But it is on the small screen that the immediate effects of the strike have been most noticeable. The hit series 24 failed to begin its new season in January, while recent awards winners such as The Office and 30 Rock have also gone off air. While they have been replaced by repeats or reality shows, the late-night talk shows have continued without their writing teams.

Initially the shows so beloved of American audiences went dark. But after two months of the strike, most of the leading hosts returned to their sets and their monologues in early January. Most of them, from Jay Leno to Jon Stewart, aired their shows without writers, leaving them often exposed by the dearth of material. Only David Letterman had his writers with him, after his production company, which he owns and which owns his show, negotiated a waiver with the union.