Dollars and sense

Cost to NBC in ad revenue due to cancellation of this year’s Golden Globes award: $15-$20m

Cost to NBC of agreeing to every single one of the writers’ demands for the next three years: $22.32m

And we haven’t even got to the Oscars yet.

Staying away from the negotiating table is simply not good business.

I went on a negotiating course once, you know

So, here we are again. The AMPTP has thrown the toys out of the pram, and my cautious optimism has come to naught.

Let’s delve a little deeper.

Datestamp: 6th December 2007
Nikki Finke reports rumours that the AMPTP has no intention of making a deal, and is planning to storm out of the talks

Datestamp: 7th December 2007 (morning)
The WGA issues a statement saying they’ve heard the rumours, and intend to stay at the bargaining table no matter what.

Datestamp: 7th December 2007 (afternoon)
The AMPTP presents an ultimatum – withdraw the following items from the bargaining table immediately, or we’re walking away. The items in question are:

  • Allow a third party other than the studio to determine fair market value for a property.
  • Allow WGA to represent writers/storyliners/editors (call them what you will) for reality TV shows
  • Allow WGA to represent animators
  • Allow WGA to refuse to cross picket lines of other striking professionals (eg Actors, Directors)
  • Revenue to be dependent on overall gross

Datestamp: 7th December 2007 6:05pm
The AMPTP walks away, refusing to negotiate further.

Now, as far as the WGA are concerned, these five items are still on the table. Still negotiable.

And, as previously discussed, the reason the WGA is on strike is Internet Residuals. All of the above points are potentially sacrificable for movement on Internet Residuals.

To the title of this post.

I was on a negotiating course once, you know. And what you do in a situation like this, is you list the things you care about, and you trade them off.

So if the AMPTP finds these five negotiable items so terrible that they must be taken off the table, there’s a very simple solution: trade them for some movement on Internet Residuals. Boy, doesn’t have to be much. Just show willing.

Demanding that a bunch of items have to come off with no trade or you walk, is not a negotiation.

The companies are currently claiming that the proposals that they are offering right now will cost $130 million. (The source implies each year, as it then goes on to mention current yearly spend. But let’s assume, more reasonably, that this is over the lifetime of the next three-year contract.)

Unfortunately, the AMPTP has declined to show their workings for this figure. However, the WGA has done the workings for the cost of everything the WGA are asking for right now.

It comes to (drumroll): $151 million over three years.

(The WGA helpfully even breaks down how much each company would have to pay.)

And this is our starting point for negotiations.


If the AMPTP are serious, we should be at the negotiating table right now, yes? We’ve established that the things they’ve walked out over are negotiable. We’ve established that the price difference is affordable. What conclusions can we draw from this?

Well, sadly, there’s only one conclusion, and that is that the AMPTP is not interested in resolving these issues and having the writers return to work. They’ve attempted to pin the blame on the negotiating committee, but that has failed.

The bigger question is this: Why don’t they want to settle?

Well, at this point I have to introduce a new concept into the discussion: force majeure.

The studios have a lot of high-money contracts with various producers. By way of an example, let’s look at a deal that’s already expired, that with Cruise/Wagner, Tom Cruise’s production company. Paramount were paying Cruise/Wagner 10 million dollars a year in exchange for a first look at anything they produced. (It should be noted that this deal was not extended – so, actually, that’s made up the difference between the two proposals right there.)

There are a lot of these Producers with Overall Deals (or PODs). They cost a lot of money. And this pilot season has not been a good one.

Meaning a lot of money is going out for no good result.

Wouldn’t it be nice if you could, I don’t know, slim the number of PODs down somewhat?

Well, turns out they all have force majeure clauses in their contracts. So if they weren’t able to develop shows (for example if there was a writers’ strike) for, say, two or three months – they could all be fired. Potentially freeing up a lot more profit.

What’s that you say? We knew this was a possibility back in November?

Well. Yes. I suppose there’s always a possibility that we’re dealing with scumsucking lowlife pondscum who’d screw over anyone that got in their way of a quick buck, instead of a human being.

But, you know, I like to think the best of people until they prove me wrong.

Unfortunately, this last AMPTP manoeuvre would, indeed, seem to prove me wrong.

New prediction: the strike lasts until February, at which point producers – real producers – will start getting fired.

What’s the betting the AMPTP then attempts to blame that on the writers?

Why We Fight

I’ve already put this in the sidebar… but I think it would be good to have it in the main section.

It’s a three-and-a-half minute video stating what the issues are behind the current strike.

If you haven’t seen it already, please spend a few minutes to find out what the writers are actually asking for.

Won’t get fooled again.

Well, there you have it.

The negotiations between the Writers’ Guild of America and the Alliance of Motion Picture and Television Producers finished on All Hallows Eve, and the WGA Contract has expired.

So what the hell does that actually mean?

It’s like this.

The WGA is the union for screenplay writers in the United States. As well as having a fairly decent healthcare plan (essential if you live in a country without a National Health Service), the WGA organises a pension plan, negotiates a minimum wage, and collects money on behalf of its members for the re-use of their work.

This last is what the big fight is about. They’re known as residuals, and are pretty much what you live off. At any given time, about half the members of the WGA are in work.

The rest – while they may be writing – aren’t paid for that writing. It’s not like turning up at the office and getting a salary. The median income of a WGA member from their writing work is $5,000 a year.

Residuals are how you make a living as a writer. It’s a damn precarious living, but a living it is.

You get a residual every time your work is re-used. So if a TV programme or film that you wrote is shown on TV in Germany, or Australia, or Darkest Peru, you are issued a check. Could be a few dollars. Could be a few thousand. But you have an income.

So a few years ago, it came time to renegotiate the contract. At that time, there was this new-fangled technology on the marketplace. Not many people used it, It was unreliable, expensive, and – frankly – weird.

So the AMPTP said: Tell you what. Let’s investigate this new technology a bit before we start negotiating about your level of residuals on it. Do some tests, see how it all turns out. Might just be a flash in the pan. Seem fair?

This new-fangled technology was known as Home Video.

And, it turns out, was quite popular.

In fact, DVD income is the main income source for studios these days. Let’s just have a closer look at these figures:

In 2004, the income from DVDs was $21 billion.
In 2004, the income from Cinemas was $7.4 billion.

And thanks to a bad decision made all those years ago, this new-fangled-whoah-nelly-let’s-see-if-this-works-out technology pays writers a very small amount indeed.

Have a quick guess how much a writer earns from each DVD sold. Go on, just take a moment to think about it. DVD of a new film goes for, what, ten, fifteen quid? How much do you think the writer gets of that?


Tuppence. Two shiny pennies. Just enough to pay for a fare across the Styx.

(And to put that figure in context – the cost to make the shiny disc, print the packaging, and stick it in that little plastic case comes to around 25p out of the cost you pay for the DVD.)

It’s fair to say that writers feel that 2p per DVD is on the low side.

But that’s not all.

The AMPTP also seeks to apply the same formula to Internet downloads. And they are refusing to talk about this.

So, the frankly risible formula for the technology which now forms the cornerstone of studio profits is to be applied to Internet downloads. Which don’t even cost 25p to package and are likely, in the future, to become the predominant means of entertainment delivery.

The AMPTP say they will not budge on this issue. Which means, sadly, that there’s no other option left.

A strike has been called. It just needs to be confirmed by the WGA board, and no new writing will be done.

The first casualty will be scripted daily comedy.

Because topical comedy can’t be written in advance, Late Night with David Letterman, The Tonight Show with Jay Leno, The Daily Show with Jon Stewart, Saturday Night Live, and the Colbert Report are expected to go dark within the next couple of weeks.

The season’s new dramas have somewhere between five and nine episodes written right now. We can expect those to burn out within two months. Then the schedules are likely to be filled with Reality TV, news, and repeats.

Make no mistake, this strike is going to hurt everyone. Studios, producers, and writers alike.

But unfortunately we have no choice. The “proposals” that have been placed on the table by the AMPTP were – literally – laughable. And there has been no movement on them.

Oh yes, I almost forgot, there was one proposal they’ve taken off the table. The one that said “Writers shouldn’t get residuals for anything at all any more.”

You can imagine how grateful we were for that enormous concession.

And that’s why we have to strike.

The exact timing will be clarified today, but it seems likely that writers will stop work on Monday.

This may be a long haul. And I wish it didn’t have to happen. But if the person on the other side of the table isn’t prepared to negotiate, sometimes you simply have to walk away from the table.

For more information on the strike, try the following websites:

The Artful Writer
Craig Mazin disagrees with me on the possibilities for negotiation. However his points are well-argued and well-sourced, and he allows open discussion in his comments section.

Deadline Hollywood Daily
Good news source about the strike from LA Weekly journalist Nikki Finke.

United Hollywood
Blog by some of the Contract Captains – they’ll be the ones organising the picket lines.