By Steve Gorman

LOS ANGELES (Reuters) - Late-night TV host David Letterman reached a deal on Friday with the union for striking screenwriters that will let his show return to the air next week while bringing his writing staff back with him.

The Writers Guild of America called its pact with Letterman's production company, WorldWide Pants Inc, a sign of union readiness to negotiate a deal with major film and TV studios to settle Hollywood's worst labor crisis in 20 years.

The WGA said its "comprehensive agreement" with WorldWide Pants included provisions to pay writers for work distributed over the Internet -- presumably covering the large assortment of advertising-supported video clips of Letterman's show that CBS posts on its Web site.

Compensation for Internet content has been the main sticking point in stalled talks between the WGA and studios aimed at ending the writers' strike, now in its eighth week.

The work stoppage by 10,500 WGA members has thrown the U.S. television industry into disarray, postponed production on several major motion pictures and is threatening to spoil Hollywood's annual awards season.

The Letterman's deal will pave the way for his "Late Show," and "The Late Late Show with Craig Ferguson," also owned by WorldWide Pants, to resume CBS broadcasts of fresh episodes with their writing staffs intact starting on Wednesday.

Letterman, who like his late-night peers on other networks has kept his show off the air and in reruns since November 5 in support of striking writers, said in a statement he was "happy to be going back to work, and particularly pleased to be doing it with our writers."

"This is not a solution to the strike, which unfortunately continues to disrupt the lives of thousands. But I hope it will be seen as a step in the right direction," he added.

Letterman has been an outspoken critic of studio executives involved in the WGA talks, once describing them on his show as "cowards, cutthroats and weasels."

LETTERMAN ADVANTAGE?

The deal could give Letterman a decisive advantage in the late-night ratings war over his chief rival, Jay Leno, host of NBC's "The Tonight Show," who has long commanded a bigger audience and plans to return the same day without writers.

WGA strike rules bar Leno, a union member like Letterman, from preparing any scripted material for his show that his striking writers would normally have produced.

NBC's "Late Night with Conan O'Brien" and ABC's "Jimmy Kimmel Live!" also resume production next week without writers. The NBC and ABC hosts do not own their own shows, so they are unable to negotiate separate deals.

CBS said in a statement it "is very pleased that Dave and Craig will be returning on January 2." The network added it "controls the Internet exploitation rights" for both shows and "will comply with any eventual negotiated agreement between the AMPTP and the WGA."

A source familiar with Letterman's agreement said it was structured to allow WorldWide Pants to pay Internet residual fees provided under the deal to writers out of the company's own pockets. Once a larger AMPTP agreement is ultimately reached, that will supersede Letterman's deal.

The latest round of contract talks broke down in acrimony on December 7 when the studio executives demanded the writers drop several of their demands, and union negotiators refused. The union has since said it would pursue separate talks with smaller, independent production companies.

The studios' bargaining agent, the Alliance of Motion Picture and Television Producers, dismissed the Letterman pact as insignificant, calling it "the latest indication that the WGA's organizers may not have what it takes to achieve an industry-wide deal."

The union's deal with Letterman came as doubts grew that one of Hollywood's premier award shows, the Golden Globes, would go on as usual due to plans by striking writers to picket the event.

A source close to the Hollywood Foreign Press Association, which presents the Globes, said it was considering canceling the live TV NBC broadcast of the January 13 event so the ceremony could proceed without WGA protests. NBC had no comment.

WGA executive Jeff Hermanson said the union was organizing a "massive presence" of its members outside the Golden Globe awards, and "we expect to have some of the nominees and award winners on our picket line."

A Screen Actors Guild spokeswoman said a majority of the Globe nominees it had contacted "are indicating that they will not cross picket lines."

The WGA has said it also plans to picket Hollywood's biggest night of all, the Oscars on February 24, unless the strike is settled by then. That prospect already has forced producers of the People's Choice Awards to cancel the usual live telecast of that show in favor of a pre-recorded "magazine"-style format with winners giving their acceptance speeches in video clips.

It was less clear whether celebrities' concerns about crossing picket lines might make it harder for Leno and other late-night hosts who lack special WGA agreements to book guests for their shows when they return.

Screen Actors Guild President Alan Rosenberg issued a statement late Friday saying SAG members "will be happy to appear" on Letterman and Ferguson's shows with union writers at work on those programs.

Among the celebrity guests slated to appear on Letterman's first show back next week is real estate tycoon turned reality TV star Donald Trump, according to producer Rob Burnett.

Reuters/Nielsen
© Copyright 2007 Reuters.

Photo:
David Letterman at the Shrine Auditorium in Los Angeles September 18, 2005. Letterman has reached a deal with the union representing striking screenwriters that will let his show, return to the air next week with his writing staff, the union said on Friday. REUTERS/Robert Galbraith