The issue surrounding the acquittal of Leno comes down to a clause in the WGA MBA known as the “AFTRA” exception. The trial committee that exonerated Leno has interpreted the clause one way, and David Young is interpreting it another way. I’m going to publish the clause here, and then offer my own explanation for why the trial committee has to be correct.

The clause, for those of you who really love reading the MBA, is in Appendix A, Article 1.A.5.d. Here it is, with my emphasis added:

Article 1.A.5. The first sentence defining the term “literary material” shall include “telescripts,” and the following shall be added: Notwithstanding the foregoing, the following shall be excluded from the definition of literary material:

d.    material written by the person who delivers it on the air unless such person has written material for delivery by another person as well as by himself/herself on that particular program; provided that, unless elsewhere herein excluded, the following shall not be excluded: Such material written for any dramatic programs, and such material written for comedy-variety programs broadcast in prime time on a basis of once-a-week or less unless the material was completely written for another purpose prior to such person’s engagement.

Okay, let’s go through it.  What the Guild represents, and what the Guild restrains during a strike, is literary material.

If someone…say Jay Leno…writes material and then delivers only that material on air, it’s not literary material. We don’t cover it. We don’t restrain it (as long as the show is broadcast more than once a week).

However, let’s say Jay Leno writes some material and then I write some material and someone faxes some material in. At that point, the monologue is no longer purely written by the performer (Leno), and so it is considered literary material. That makes sense.

So what’s the problem? Well, the clause is excusing self-written performance material on that particular program.

Two ways of interpreting that, as far as I can tell. There’s what appears to be the trial committee’s way, which is to say “on that particular program” means on that specific episode. If Jay and I collaborate on Monday’s monologue, it’s literary material. If Jay is the sole writer of Tuesday’s monologue, it’s not.

Then there’s what appears to be David Young’s interpretation, which is to say “on that particular program” means “on The Tonight Show in its totality.”

Here’s why that’s insane…although I’m sure you already get why.

The Tonight Show has been running since 1954. Is David Young really suggesting that if one guy one time wrote one joke for Steve Allen during the Eisenhower Administration…and no other writer save the hosts ever wrote a single joke again…that Jay Leno would still be creating literary material with his entirely self-written monologues in 2008?

Please.

That interpretation turns the AFTRA exception into a this-can-never-apply contract term, and that’s a good enough reason to reject it as absurd. Besides, the clause uses the phrase “particular program” in one spot and “program” in another. Obviously, “particular” was meant to imply “an instance of” or “single airing” or “individual show of” or “episode.”

The trial committee wisely rejected David Young’s point of view, and so too should the rest of us.

17 Comments »

The 2009 WGAW election season is upon us.

I posted this originally on another site, but thought it worth posting here, as well:

All the candidates are avoiding the elephant in the room:

The terms we ended up with in the 2008 MBA.

Both the New Media Re-use terms and the New Media jurisdiction terms we ended up with are terrible — worse than what we were told they were, and worse than the terms either the DGA or SAG got.

But explaining why requires a membership that has some degree of intellectual curiosity about their own contract, as well as the ability to consider facts that contradict their own beliefs.

That does not describe very many Guild members.

“Organize organize organize” and “We’re kicking corporate ass!” are pretty much as complex as Guild politics can get.

“FOUR LEGS GOOD, TWO LEGS BAD, was inscribed on the end wall of the barn, above the Seven Commandments and in bigger letters. When they had once got it by heart the sheep developed a great liking for this maxim, and often as they lay in the field they would all start bleating ‘Four legs good, two legs bad! Four legs good, two legs bad!’ and keep it up for hours on end, never growing tired of it.”– George Orwell, ANIMAL FARM

I stand by this.

But it was pointed out to me that perhaps I have become unpleasantly cynical about my fellow Guild members. That maybe its not a lack of interest or intellectual acumen that limits Guild political discourse to the level of punditry and sloganeering common to national politics, but simply a lack of awareness and information.

Fair enough. Let’s find out.

WGAW Board member and WritersUnited co-founder Robert King wrote a letter in support of the Wells/Gould/Keyser slate. In it, he brought to light the fact that, in drafting the 2008 MBA, the Guild fumbled the ball on the terms covering residuals on so-called “ESTs” — electronic sell-through or, more commonly, iTunes downloads.

Well, not so much fumbled the ball, as handed it to the opposing team, stepped aside, and waved bye-bye as they ran past toward the goal line.

In the 2008 MBA negotiations, the Guild gave away EST residuals on more than thirty years of movies and tv shows.

Conventional wisdom bandied about on picket lines was that coming into these negotiations, the studios refused to pay us for the use of our work on the internet.

Not true.

In 2001, the Guild won us the right to residuals on internet exhibitions of movies and tv shows produced since 1971. The rental rate was set at 1.2% of 100% of total receipts; the EST rate would be agreed upon at a later date.

(The terms also established that since use of movies and tv shows on the internet was outside the primary market, payments would be made for that use.

So, really, when the AMPTP’s initial offer included no new rates for internet residuals — in fact, when the Companies started streaming network shows without our permission — the Guild’s response should have been to fold our collective arms, smile smugly, and say “We already established six years ago what kind of girl you are, AMPTpetite. Now, we haggle over price.”

But that would require acknowledging that the Guild had actually achieved some solid gains in past negotiations — which runs contrary to the narrative that goes, the Guild can’t achieve anything in a negotiation without a strike.)

In 2008, of course, we agreed to an EST rate — based on the DVD rate, calculated against 20% of total receipts, rather than “of 100%” rate we’d been holding out for since 2001 — payable on movies and tv shows produced after the strike ended.

The DGA agreed to the same rate on movies and tv shows produced under their new contract; so did SAG.

But in drafting our internet nee “New Media” residual terms — which, remember, the Guild insisted on doing before accepting any offer or ending the strike — our negotiators got rid of the language that required EST payments on any movies or tv shows produced under any previous contract.

That’s wasn’t part of the deal the DGA made, and it wasn’t part of the deal that SAG made, patterned on the DGA deal.

We gave back EST residual on over thirty years of movies and tv shows.

Even at the lowly DVD rate the AMPTP had been offering since 2001, that still represents millions upon millions of dollars in writers’ income … gone.

This can be easily verified by anyone. The 2004 MBA — look at the “Sideletter on Exhibition of Motion Pictures Transmitted Via the Internet” — and the 2008 New Media Reuse terms are online at the WGAW website. The only thing you have to know — which, apparently, Guild negotiators did not — is that terms in a collective bargaining agreement are prospective unless they explicitly establish retroactivity (and that, too, can be easily verified).

And, it must be pointed out:

The Guild insisted upon drafting and signing off on the final language of the New Media Reuse sideletter, before the AMPTP ever put the offer on the table, before accepting the offer, before ending the strike. This significantly undermines any argument the Guild could make that the language does not accurately reflect the agreement reached between the Guild and the AMPTP.

As does the fact that the language in the 2004 MBA that established retroactivity of all internet residuals is still in the 2008 MBA — but its been moved, so as to apply only to the rental rate agreed to in 2001.

The other internet residual terms — covering free-to-the-viewer streaming — also include language that explicitly establishes retroactivity of those terms.

The only internet residual term that does not include retroactive language is the EST term.

And our EST term is identical to the one in the DGA’s contract, and SAG’s contract.

However, both the DGA and SAG retained the language from their previous contracts that establishes retroactivity of all internet residuals. The EST rate they agreed to applies going forward only, just like ours. But their contracts still anticipate EST payments for work done under previous contracts, at a rate still to be determined.

All evidence points to the Guild, and the Guild alone, as the source of this screw-up. You can be pissed at the AMPTP because they did not warn us that we were giving away something they did not ask for — but its not like its the AMPTP’s job to represent the interests of writers in negotiations.

That’s what we elect officers and Board members to do.

There’s house meetings and coffee klatches and candidates night coming up. Go to them. There’s people running on both slates who were on the Board and the Negotiating Committee. Ask them about the EST rate.

Ask them about the problems with the terms covering new media programs derived from covered tv series (there’s nothing in the contract that requires that a derivative new media program must be produced by a signatory company. At least one studio is contracting them to non-Guild prodcos, and the only thing the Guild has done is threaten members with an unenforceable rule).

While you’re at it, ask them why there’s nothing in the derivative new media terms that requires payment to the creators of the television shows, or even acknowledges that derivative new media programs are an exercise of the creator’s serial sequel rights.

And since we theoretically got the same terms as the DGA requiring the Companies to share data about new media residuals, ask them why the DGA has been meeting with Residual Department execs from every Company for the last year, while we’ve only just been able to get our phone calls returned.

And ask them:

What are we going to do in the next negotiation to repair the damage done to the MBA in the last negotiation?

And don’t stop asking until you get real answers.

26 Comments »

Sometimes I forget how long I’ve been writing this blog.  I remember that I’d done an article about “free rewrites” way back when…but I was a little shocked to see that it was nearly four years ago.

Seems like I started this site just yesterday…ah, memories.

Anyway, that article was a net I cast for suggestions on how to deal with free rewrites. For the few of you who don’t know what I’m talking about, some producers and studios ask the writer for more work once they receive the draft…but not as a new step with fresh payment. Instead, the rewrite is considered part of the ongoing step, or an intermediate step, or a “producer’s pass,” a freebie, a give-away…

“Rip-off” is often a good descriptor.

It’s been going on for a long time. The WGA took the companies to arbitration over it and lost. The arbitrator ruled that per our collective bargaining agreement, our contracts must specify a “delivery agent.” Unless we deliver to that delivery agent, we haven’t actually contractually finished the step, and any work that we choose to do until that point is our problem, not the producers’ or the companies’.

It was a fine legal ruling inasmuch as it stuck to the letter of the law. It was a bad legal ruling inasmuch as it ignored what’s become a rampant culture of threats and abuse. The fact that the legal delivery agent is often the head of the studio, with whom most writers never even speak, makes the status quo even less satisfactory.

Here’s the typical nightmare scenario. A relatively new writer, no credits yet, is hired to do a rewrite for $250,000.  That 250K is divided up in his contract like so:  $175,000 for the first draft, and $75,000 for the second draft. The writer finishes his first draft and gives it to his producer, who insists upon reading it first. He’s been told by the studio to read it first. He always reads it first.

He has notes. He gives them to the writer and says, “Do these before we turn this in, or you’re not going to last on this project.” Or he says, “Do these before we turn this in, because if you do then we’ll get Actor A or Director B to attach themselves. You don’t want to kill the momentum, do you?” The writer acquiesces and does the work. The producer still isn’t happy. He demands another pass. And another. Finally, the writer puts his foot down and says, “I’m not doing five drafts for the price of one.”

At that point, the producer calls the writer’s agent and says that he’s never working with the writer again, he’s telling the studio what a crappy job he did, etc.

Ugly.

And it happens all the time.

This has to end. It’s costing individual writers time and money, and it’s costing the Guild untold losses in dues.

Unfortunately, the cures I’ve heard proposed over the years are almost as bad as the disease. I was talking about these with some friends, who had been talking about them with their friends. I’m going to go through the possible solutions, discuss why I don’t think they’re wise, and then propose my own solution…the same drum I’ve been banging on this for years.  Maybe the WGA will perk up and take notice this time.

 

LEGAL ACTION

This was was actually tried. The idea is that the Guild subpoena its own members, who are theoretically violating Guild working rules by doing free passes.  The writers are forced to cough up names, and the Guild goes after those names. Unfortunately, since the arbitration ruling, the Guild can’t really claim that the free passes are violations. And, of course, firing a gun at your own soldiers is rarely the best way to win a war.

WAIVER SYSTEM

Dan Petrie Jr. proposed this in 2004.  The idea is that the Guild would grant certain writers waivers to  do “free passes”, but deny those passes to others. Why?  Well, free writing is mostly a problem for writers who aren’t getting paid millions.  For instance, I know a writer who doesn’t like working in “steps.” Rather, he prefers to work with producers or studios until the project is either good to greenlight, dead, or he feels like he’s given it his all.  He gets paid well into the seven figures, and I don’t see any reason why the Guild should interfere with his process–it’s working for him and just as importantly, it’s generating big dues for the union. Under Dan’s system, that writer would get a waiver, but the $175,000 writer would not.

The problem with this? First, the arbitration sort of mooted it. Second, people seemed quite squeamish about institutionalizing a tiered system of governance based on individual success.  Third, it created a bureaucratic challenge, and lastly, if the $175K writer was afraid to say “no” to the producer asking for free work, it’s just as likely they’ll be afraid to ask the Guild for a waiver.  They’ll just do the free pass and pray.

SURVEILLANCE

One writer proposed to me that the WGA should audio record all meetings and telephone discussions between every writer and every producer or studio exec. Those recordings would then be transcribed, and the Guild would study them for demands for free work.

I’ll let you all figure out the four thousand reasons why that’s a non-starter.

REGISTERING DRAFTS WITH THE GUILD

This is one of the more popular solutions.  The Guild would require every member to send in each draft they did.  The Guild would then tell the producers or studios to pay up.  In order to avoid the “weak link” syndrome of a writer simply not turning the draft in and doing what the producer wanted, the Guild would only allow “registered” drafts to be eligible as literary material in a credit arbitration.

Here’s why this would not work. First, the Guild is pretty bad at getting money out of producers and studios. The WGA’s track record in this area is rather depressing; when I was serving on the Board in 2006, there were open cases relating to nonpayment that dated back to the 90′s. Second, the threat of drafts being ineligible for credit is a bit toothless.  Even if it turned out that this was legally defensible, most writers typically submit one draft for credit purposes anyway.  If a guy writes four free drafts to get the fifth paid one, it’s more than likely that the fifth one is going to be the only one relevant to a credit arbitration. Lastly, the arbitration moots this once again. If the Guild calls up and says “pay John Smith for the draft he just registered with us” and the studio says, “Sorry, the contractually designated delivery agent hasn’t received it” and the writer is under pressure from the producer not to submit it to that delivery agent, the Guild is left holding an unloaded gun.

 

Okay, so those are the most common suggestions. What’s my solution? How should the Guild solve the free rewrite problem?

Answer:  it should first acknowledge that it can’t.

The Guild has wasted years deluding itself into thinking that it must be the source of the solution. I can understand why. It feels precisely like the sort of collective problem the Guild specifically exists to solve. That, however, doesn’t obviate the fact that it can’t. The reason the Guild can’t solve the problem is because it centers on two forces the Guild cannot control: employer greed and employee fear.

The Guild can compensate for employer greed by collective bargaining and striking. The Guild can compensate for employee fear by creating counterfears like disciplinary action. Unfortunately, the arbitration essentially took away both kinds of compensation in one fell swoop.

So to whom should they turn?

The agencies.

The agencies don’t collectively bargain with studios. They bargain individually, thousands of times a year. And yet, as institutions themselves, they bring to bear their collective might from time to time. The studios don’t need the WGA to like them, but they need CAA to like them. They need Endeavor and WMA and UTA and ICM to like them.

My proposal is quite simple.

The WGA should send a small envoy of high profile screenwriters to meet with the heads of each of the big agencies. At that meeting, the envoy should explain why for certain clients in certain situations, the agency, not the agent or client, but the agency should make clear to the producers and studios that as a matter of policy they will not allow their clients to engage in abusive rewrite situations.

The employers know that the one relationship they cannot circumvent is the client-agent relationship. Until now, agents have done the most expedient thing possible; they’ve urged their clients to play ball.

We need to point out to the agencies that they’re actually losing money by playing ball.

Now, how do we define which writers deserve the policy protection of the agency? And how do we define the difference between a producer’s pass that the writer really wants to do, and a situation in which the writing is being coerced?

Simple.

We don’t. We can’t. That ship has sailed.

Instead, we let the agency make the determination. We urge them to change their own culture, and by extension the employer culture. We ask the agencies to admit to themselves which of their clients are at risk, and then we ask the agencies to protect those clients as a matter of policy.

Is it perfect? No. Is it better than what we have? Yes. Is it better than anything the WGA has achieved institutionally?

Considering that the WGA hasn’t achieved anything institutionally to address this problem, the answer is clearly “yes.”

57 Comments »

Cleaning out my e-mailbox, I came across a copy of the WGAW’s electronic members’ newsletter, WRITE NOW, from December 3.

In the upper right hand corner was a box, that said:

DID YOU KNOW … that MBA [sic] covers writers on ‘Reality’ television?

It went on:

To better understand this point, one must simply be aware of the WGA’s historical jurisdiction along with a few simple definitions within our MBA.

Murderlized syntax aside, I was intrigued. Since the reality production process was specifically designed to skirt the Guild’s historical jurisdiction — in no small part, by exploiting definitions within the MBA intended to prevent non-writer employees from encroaching on the compensation and benefits won by writers for writers — I wondered how Guild organizers were going to prove their thesis.  So I clicked on the READ MORE link, which took me to a hidden page in the “If You’re a Member” section of the WGAW’s website.

According to the article:

The WGA has always covered the ‘reality’ genre …

Really?

Odd, then, that in the last negotiation, even after Guild negotiators had yanked off the table things like increases in DVD residuals and premium cable residuals and eliminating the discount for the CW network and other things that directly affect writers who work under MBA, the Guild nonetheless still had us all  picketing in support of a demand to cover reality.

If the WGA has always covered the ‘reality’ genre, I mean.

But, okay, the article’s thesis is, the MBA covers writers in “Reality” television, and the first proof is, the WGA has always covered the “reality” genre. Continue:

… although historically these shows have been called comedy-variety, quiz and audience participation, documentaries, docu-soaps, and competition shows.

Huh. I recognize “comedy-variety,” “quiz and audience participation” and “documentary” as areas of employment covered under Appendix A of the MBA. 

“Competition” and “docu-soap,” though ..? Those words are sometimes used to describe different types of reality shows, sure — but they are not areas of employment that the Guild has ever covered. 

Historically speaking, that is.

The article then goes on to draw a false syllogism. Take a look:

For example, Star Search was covered under the MBA. Thus, it’s disconcerting when reality-producing giants, like FremantleMedia, refuse to admit that there are professional writers on a hit-show like American Idol. Indeed American Idol’s show concept is the same as that of Star Search. The reality is simple: writers existed on Star Search and they exist on American Idol.

See what I mean?

• The Company that produced Star Search employed people in the capacity of “writer” to provide services writing literary material as defined in Appendix A of the MBA, and was signatory to the MBA.
• Star Search was a talent competition.
• American Idol is a talent competition.
• Therefore, the Company that produces American Idol employs people to provide services writing literary material as defined in Appendix A of the MBA.

The last is presented as though it has been proven, but it hasn’t been.  All this argument proves is, employees of Freemantle who work on American Idol could be covered under the “comedy-variety” provisions in Appendix A of the MBA — if any of those employees meet the definition of “writer” in Appendix A of the MBA.

And, as far as I understand the terms of the MBA, none of ‘em do. 

But, then, that’s why I wanted to read the article. Because it promised it was going to help us Guild members simply understand a few simple definitions in the MBA.  So, first up:

Article 1.C.1.a. (1) of the MBA states:

A “Writer” is a person who is engaged by the Company to write literary material as defined herein (including making changes or revisions in literary material), when the Company has the right by contract to direct the performance of personal services in writing or preparing such material or in making revisions, modifications, or changes therein.

Yes, that is the definition of “writer” from the general television definitions of the MBA. Somebody who is employed by a production company to provide services writing literary material as defined in the MBA. 

But, since the Guild’s reality organizing campaign keeps running smack up against the fact that reality prodcos don’t employ people to provide services writing literary material as defined in the MBA … this doesn’t really prove that the MBA covers writers in reality television.

But, wait, now we come to the “professional writers” portion of our edumacation. This is a key point to the article’s argument, so here’s what the article offers up, in full:

The MBA covers PROFESSIONAL WRITERS defined under Article 1.C.1.b of the MBA, which states: 

A “professional writer” means any person who has received employment for a total of thirteen (13) weeks as a television, motion picture or radio writers…

Hey, hold up — that’s not the entire definition — oh, you’re not done? Sorry, go on.

Explains the article:

Basically, a professional writer is a writer who is hired for at least 13 weeks of employment to provide literary material as contracted by a Company who has the right to direct the performance of the personal service in writing such material or in making revisions therein.

Basically?

Basically that’s how the MBA defines “professional writer”?

Only if “Basically” is being used here to mean:

“Ignoring the language in the contract, the bargaining history of the contract, and the Guild’s history of enforcement of the contract, and presenting only part of the definition out of context while ignoring everything and anything else that does not support the argument –”

– then, sure, “basically,” that’s what a professional writer is. 

But that’s not even close to what “professional writer” actually means.

The term “professional writer” in the MBA means — in both the television and theatrical articles — someone from whom a signatory Company acquires or licenses the rights in literary material written on spec, who meets one of a number of criteria that entitles to him (or her or they) to all terms and rights in the MBA as minimum terms in the sale/license agreement.

One of those criteria is, if the Company acquires literary material written on spec from a person who “has received employment for a total of thirteen (13) weeks as a motion picture and/or television writer, or radio writer.”

That means, if a spec writer has at any time in the past been employed for an aggregate of 13 weeks in any of those capacities — whether under Guild jurisdiction or not — then the Company must acquire or license the spec material subject to the MBA.

(The other criteria are: has received credit on the screen as a writer for a television or theatrical motion picture; has received credit for 3 original stories or 1 teleplay for  1-hour or longer live television program; has received credit for 3 radio scripts for 1/2-hour or longer radio programs; has received credit for 1 professionally produced play on the legitimate stage, or 1 published novel).

The most interesting thing about the definition of “professional writer” as that term is used in the MBA?

Anyone who is covered under the MBA as a “professional writer” is, must be, and can never not be, a non-employee for the purposes of the spec literary material being acquired or licensed.

The fact that the material is written outside any employment or work-made-for-hire arrangement is what makes it spec material, and is exactly the reason why the Company must acquire or license the rights in it.

Sheesh.

The Guild’s argument that the MBA covers employees in reality television that Guild organizers call writers is founded in a term of the MBA that is wholly inapplicable to any employee of Freemantle, or Mark Burnett, or any other company that produces programs in any “genre,” including reality.

But, there’s a bigger issue here.

This article is posted on the WGAW website, it was linked to from the WGAW members newsletter, and it is targeted at Guild members.

The article intentionally misrepresents the very definition of the work writers are paid for under the MBA … to the membership whose professional interests the Guild is supposed to represent.

This article is intended to misinform the membership about fundamental terms of the contract that has major impact on our professional careers.

This article is endemic of the willful ignorance toward the MBA that has plagued the  WGAW for the last few years — a willful ignorance that allowed networks to exhibit entire episodes of tv shows on the internet as “promotional use” without the Companies ever applying for waivers or the Guild billing them for clip fees … that encouraged Guild members to call other Guild members “scabs” and “strikebreakers” for providing services that are not covered under the MBA and, in some cases, specifically and explicitly excluded from MBA jurisdiction … and that ultimately resulted in a contract that …

… well, for now, let’s just say that when WGAW President Patric Verrone called it “the best deal this Guild has bargained for in 30 years,” his use of the word “best” had the same relationship to the actual meaning of the word “best” as the article’s use of the word “basically” has to the meaning of “basically.” More later.

There’s no excuse nor justification for the Guild publishing this article, or doing anything else, that demonstrates such monumental disregard and disrespect for its own collective bargaining agreement.

Because, you know … if we do that, then the studios may get the idea that its okay for them to do it, too.

Oh, wait.

Hm.

-Ted Elliott

5 Comments »

Oprah came out to celebrate the opening of Tyler Perry’s new studio, but I guess she either doesn’t know or doesn’t care that Tyler Perry is apparently a union buster.

From THR:

LOS ANGELES (Hollywood Reporter) – Four writers involved with a Writers Guild of America organizing effort at writer-director-producer Tyler Perry‘s cable TV show “House of Payne” have been fired.

The production company says they were fired for cause, but the union said Thursday that they were dismissed because they were involved in the organizing effort. The WGA West plans to picket Tyler Perry Studios in Atlanta when the facility opens the wekend of October 3.

The guild claims that the problems began in April when the writers — Kellie Griffin, Christopher Moore, Teri Brown-Jackson and Lamont Ferrell — were among seven scribes seeking to negotiate a first WGA contract with Perry’s production company, House of Payne. The company produces “House of Payne” and the upcoming TBS show “Meet the Browns.” No contract has been signed.

Perry’s attorney, Matt Johnson, said that the four were fired because of poor work performance. Griffin, Moore, Brown-Jackson and Ferrell had worked on more than 100 episodes of Perry’s TBS series, now syndicated on Fox. The three remaining writers were asked to stay on, and two did.

“We continue to work toward a resolution of their contract,” Johnson said.

The WGA has filed unfair labor practice charges with the National Labor Relations Board, claiming the four were fired unjustly and that Payne’s company bargained in bad faith.

Just going by what’s been reported, the WGAw has a pretty good chance of winning this one. You don’t employ people for years, and then suddenly decide they’re no good and need to be fired shortly after they ask for union representation. That’s a blatant no-no, and I expect that Tyler Perry is going to get his ass handed to him on this one.

In thinking about this case, as well as some other organizing problems the WGA has been dealing with, I started to wonder a bit about how the union views one of its own working rules. The working rules govern the conduct of WGAw members. If you violate them, you can be fined…all the way up to the entirety of what you earn on the project for which you’re in violation.

Some of the working rules are obvious. “Don’t accept less than minimum for your work” is a no-brainer. Without that one, union members would be caught in an undercutting race to the bottom. But perhaps the single most important working rule is Working Rule #8.

No member shall accept employment with, nor option or sell literary material to, any person, firm or corporation who is not signatory to the applicable MBAs.

Violation of this Rule shall automatically subject the member to a fine, the maximum amount of which shall not exceed 100% of the remuneration received from such non-signatory.

Why is this the most important rule we have? Well, the companies own subsidiaries that have agreements with our union, but they also own subsidiaries that do not. For instance, Disney has a company that has a deal with the WGA, but it owns plenty of companies that can do non-union work.

Working Rule #8 is so important because it requires union members to only work for union companies. Right? Disney can make a non-union live action movie if it wants to, but it can’t get any members of the WGA to write on those movies, because those writers would be violating Working Rule #8.

The key limitation to Working Rule #8 is “applicable MBAs.” What that means is that Working Rule #8 only restricts me as long as we’re talking about a project that could be covered under our existing collective bargaining agreeements.

Our MBA doesn’t cover feature animation, so I can do a non-union feature animated project if I want. But our MBA does cover live action features, it does cover network prime time, it does cover game shows, it does cover basic cable…

Uh…wait. Whoa. Hold up.

Every feature writer knows they can’t work non-union gigs. I don’t know any feature writer in the WGA who has ever broken this rule. But isn’t our entire argument on reality TV that most of those shows should be covered by the MBA as game shows? And if we have a deal on basic cable, why are we trying to get WGA deals on shows that WGA writers are working on?

Why are any WGA writers working in scripted reality or basic cable shows if they’re non-union?

Why are we not enforcing Working Rule #8?

The easy answer is that no one wants to “blame the victim.” If WGA writers are working non-union for Tyler Perry’s basic cable show or for a “reality” game show like American Idol, we shouldn’t punish them by taking their salaries. We should attack the shows.

Well, at the risk of saying something extremely unpopular (yet again), how about we do both?

If every WGA writer working in reality and basic cable stopped tomorrow, that would have a serious impact on those shows. An immediate impact, one would hope. If a reality show chose to continue on without WGA writers, then so be it. But could most basic cable shows do so? I doubt it.

I don’t mean to sound harsh, but if I nor any of my feature film sisters and brothers line our pockets or support our families with non-union work (in order to not undercut each other on union work), why should game show or basic cable writers be able to get away with it? Why aren’t we demanding that Working Rule #8 be applied fairly and consistently across the board?

Hell, we don’t even have to apply the fines. Use it as a lever if you want. If a basic cable show has a staff that’s 50% WGA, apply #8 to those writers and try and force a WGA deal on the show.

Look, there’s no chance we’ll ever get real jurisdiction over basic cable if we’re soft on Working Rule #8. No chance at all. The companies will always find the path of least resistance, and here’s an area where we’ve just rolled over and not bothered to resist at all, even though we have the means to do so…and even though we ask many of our other members to do so.

It appears that at least some of the writers protesting their termination on Payne are WGA members.

I support the fight to get them a WGA contract. I support the WGAw’s unfair labor practice charge against Tyler Perry.

But I have a bigger question that I think deserves an answer.

Why were some WGA writers allowed to violate Working Rule #8 for a hundred episodes on a non-union show?

Perhaps there’s something I’m missing. If so, I’m all ears. But I fail to see how we’re ever going to win an organizing war if for every writer we recruit through the front door, there’s a writer walking out the back.

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Perspective requires time. Has enough time passed since the end of the strike for a reasonably sober view of it all? Probably. There’s no doubt that more time still will be required to draw the most purposeful conclusions, but here’s an early attempt on my part.

If nothing else, it will give us all something to scoff out down the road if I turn out to be completely wrong.

The obvious question is “Did it work?” That’s a decent amalgam of “Did we win?” and “Was it worth it?”

Next week, I’ll take on the issue of the strike itself as a tactic, as well as the ramifications of our labor action. This week, let’s just start by looking at the deal itself.

There are those who think this deal is very good (John Wells), and there are those who think it’s the end of days (Justine Bateman of SAG and Harlan Ellison of the WGA). I imagine most people fall somewhere in the middle (because that’s how most people fall on most things, including our own leadership), but it’s fairly obvious that the majority of WGA members either leaned towards Wells’ viewpoint or felt that the deal was good enough to put the picket signs down and go back to work.

Let’s go through the terms.

Sales and Rental Residuals

The deal works well here. It’s not as good of a deal on New Media as we got in 2001, when Wells and McLean somehow managed to pull the 1.2% for internet rentals out of a hat without striking. That rate, which is the gold standard for residuals, is really the only significant rate right now if you’re a theatrical writer. A lot of people, including me, were convinced that internet rentals were a non-business, and the majority of the residual load would end up in internet sales.

Wrongo. Turns out the companies are rather jittery about selling movies outright on the web, because they’re freaked (justifiably) about piracy. They prefer to rent them via, say, iTunes. The Wells/McLean 1.2% on rentals is going to be lining our pockets for some time, so I salute them.

On the other hand, the sales rate resulting from Verrone/Young isn’t bad at all. Sure, it’s not the 1.2%, but after a reasonable amount of units are sold at the DVD rate, our percentage bumps up to roughly double the DVD rate.

Not bad at all. In fact, I’d call that very good. If this entire negotiation was predicated on the notion that DVDs would one day disappear, to be forever replaced by digital distribution, then quintupling the rental figure and nearly doubling the sales figure has to be viewed as strong progress.

There’s been a bit of hay made over the fact that our deal is now in terms of the total company gross, as opposed to the hated “producer’s gross.” That is, instead of saying we get 1.8% of 20% of 100% on initial internet sales, our deal now says that we get .36% of 100% on initial internet sales. Somehow, this is supposed to position us better and um, make us feel better, or……something.

Being a fan of math as I am, I could care less. They could have said we’re getting 180% of 2% of 100% or .036% of 1,000%. Who gives a damn? What’s the check gonna be? That’s all that matters.

Residuals for Streaming Media

This was the big one. How much would the companies pay writers when they reran television programming on the internet? The fear at the core of this issue was very real and very justified. There is a sense that internet reruns will someday replace network reruns entirely. It was critical to get this one right.

Did we?

I’ll go with a “yes, for now.”

Here’s how it works. When a network airs an episode of a show, they get 17 free days in which to run it on the internet without paying residuals (24 days if the show is in its first season). A lot of people hate this provision, and there’s certainly nothing nice to say about it. However, there is at least one mitigating factor. The 17 (or 24) days must be either immediately after the show’s run on the network or be running during it. That’s a clue as to how the companies may be planning on using this window. It’s likely that some of those free days will be used in advance of the initial airing of the episode, particularly for new shows. In other words, a week before an episode’s airing, the network may run a portion (or all) of the episode on the internet to generate some buzz or interest.

Once we get past the initial hump of the free window, the money kicks in. Sort of. Again, it’s not great, but it’s okay. The problem for the unions was one of calculation basis. When a company licenses its show for internet distribution, what does it get back?

Anything? Something? Nothing? All three of the above are currently true, and the fact that the production company is often licensing the show to another division of the same parent company only confuses things further.

The compromise was to go with a fixed residual for the first three years following the initial broadcast airing, then go to a percentage of license. For an hour-long program, the first three years will net a total residual of $4,262. Following that, the residual switches to 2% of whatever the license fee is.

Thanks to Steven Schwartz from the WGA NegCom for correcting me here. The compromise is to go with a fixed residual for the first year following initial broadcast, and then it’s a 2% of true gross after that. That fixed residual, however, increases each year of the contract’s life, so if that first year occurs in the third year of the contract, the fixed rate is higher than it would be if the first year were in the second year of the contract.

Silly mistake on my part.

Now, you may have heard that we improved upon the DGA deal for the third year of our contract. We did not. We get exactly what they get, down to the penny. The difference is the language. They went with a fixed number, whereas we went with a percentage of distributor’s gross…except we impute the distributor’s gross in the third year to be a number that gets us to the same fixed result the DGA got.

Why the linguistic rigamarole here? Well, it appears that the WGA felt this would position them better for future negotiations. Seems like wishful thinking to me. The number is the number.

Much has been made about the difference between these residuals and the network rerun residual. The first network rerun of an hourlong, for instance, is worth $20,000 in residuals for the writer. So…how can we possibly look at this new rate for the internet as a good thing?

There are two things to consider when comparing this apple to this orange. First, many, if not most hour long programs do not get network reruns. The ones that do are typically the hits. Even those reruns, however, are in danger. The networks are keenly aware that the rerun business is dying. As DVRs proliferate and audiences grow more accustomed to simply time-shifting the first run of a program, it becomes less and less profitable to run the rerun.

As such, it’s unlikely that the $20,000 vs. $1300 argument is a sound one. Most writers aren’t getting that $20,000.

Secondly, what this formula sacrifices up front, it potentially makes up for in the back. As shows are rebroadcast into the ground, the amount they pay out dwindles. Under the internet formula, library shows become potentially more valuable for the writers. The amount doesn’t dwindle. Rather, we have a set 2% of the gross of the license fee.

If (and this is a big IF) the license fees can be verified and held to market standards (and we have some provisions for this), writers can and will come out ahead in the long run…IF…and here’s the other big IF…

…IF streaming on the internet becomes a legitimate business.

The difficult truth is that we were all collectively guessing on this one. We guessed that this would become a legitimate and big business. Let’s pray we were right.

Jurisdiction

This one was the sleeping giant of this past negotiation. Without a guarantee of jurisidiction over made-for-internet programming, our union would have been seriously crippled heading into the future. It’s not that broadcast will ever go away (and for the record, if networks switch their distribution from satellites and airwaves to some kind of IP-based system, that doesn’t count…”internet” means stuff you watch in a browser), and movies will continue to run in theaters, but there’s every reason to believe that made-for-internet will become a viable business for the companies at some point.

We needed to automatically cover that work. And now we do.

Reality, Animation, DVDs

Zippo, zilch and squat. As predicted.

Conclusion

On its face alone, this is a good deal, and I was happy to assign my proxy to Patric Verrone and help ratify it. It’s not a perfect deal (was anyone expecting one?), it’s not a tragic loss (at least, not in the context of our 60+ year history), and it will serve as an okay basis for the next negotiation.

But…

…was it worth the strike? Was the strike necessary? Was it well-run? Could we have gotten this without a strike? And did we really get it at all? Stay tuned for part two.

You might be surprised by some of my answers.

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The DGA summary had one notable omission: what about ad-supported streaming for theatrical movies? The last we heard from the AMPTP, their offer was zippo. Nada. Nothing. “It’s promotional.” Riiiiight.

I’m happy to report that the DGA deal locks in a rate of 1.2% of 100% of distributor’s gross on ad-supported streaming for theatrical films. That’s fantastic news.

Edited to Add:  Some of you have been asking how gross works via ad-supported streaming.  I’m trying to find out.  It’s part of the television streaming formula too, which goes to 2% of distrib. gross after benchmarks.  I’ll let you know whatever I can find out.

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While I continue to study the terms of the deal, I was forwarded a copy of an email John Wells sent to another writer who was interested in his opinion on the deal. John granted me permission to republish his email here. The following is the email, unedited.

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Dear Jim,

I think the DGA deal is good. Very good. For writers, for directors, for the future.

Let me run it down:

EST – ELECTRONIC SELL-THRU (download to own)

3.25% of 20% on Theatrical product after the first fifty thousand units are downloaded (first fifty thousand units are paid at the old homevideo/DVD rate).

3.5% of 20% on Television product after the first one hundred thousand units are downloaded (first one hundred thousand units paid at old homevideo/DVD rate).

Our current rate is 1.2% going to 1.8% of 20% in homevideo (Ed. Note:  Not exactly.  It’s 1.5% going to 1.8% of 20%). This DGA deal doubles our much hated homevideo/DVD. A rate we have tried to improve on for over twenty-two years without success. Twenty-two years. As recently as a few weeks ago the Companies were still saying they would “never, ever” raise this rate. One company exec told me we were “out of our fucking minds” if we thought we would ever get an increase in the DVD rate for EST. This is a huge, historic victory for everyone.

MADE FOR INTERNET – DERIVATIVES (Webisodes/mobisodes)

The DGA got jurisdiction over made-for and derivatives. The AMPTP agreed that all “high budget” made-for and derivatives would be DGA covered employment. The Companies are required to make Pension and Health payments for a DGA director and his/her team and to negotiate minimum payments in good faith.

On “low budget” made-for and derivatives, the DGA has jurisdiction if the Company wishes to employ DGA members, with the same requirements to provide Pension and Health and negotiate minimums in good faith.

The definition of high budget is also very encouraging: $15,000.00 per minute, $300,000.00 per episode, or $500,000.00 per series — whichever is lowest. To put this into perspective, QUARTERLIFE, the web series that Herskovitz/Zwick are producing is being made for more than three times this amount and would clearly be covered employment, as would all of the mobisodes and webisodes made for existing shows so far. Another big win for all of us.

Just as an aside, this “high budget – low budget” solution was championed by several members of our WGA negotiating team and it’s great to see it’s the same solution arrived at by the DGA.

AD SUPPORTED STREAMING

A 17 day free promotional window on existing shows.

A 24 day window on new shows.

As a practical matter, this is actually a two week window (three weeks for new shows) with the Companies allowed to “preview” the show on-line for up to three days prior to it’s initial run for promotional purposes.

After the initial window, the Company would pay $600.00 (for an hour program) for the right to stream each episode for an additional 26 weeks. After the first 26 weeks, the Company would pay an additional $600.00 for 26 more weeks. For a total of one year at $1200.00.

If the Company chooses to leave the episode available for ad-supported streaming after the two 26 week cycles, they would pay 2% of distributor’s gross going forward. Distributor’s gross is the definition we always wanted and they didn’t want to give us.

The $600.00 figure is 3% of the standard residual rate (or 6% of the rate annually) and is tied to the minimums, so as minimums increase each year, the $600.00 will increase right along with it.

This is an extraordinary figure. I’d been pushing a 5% rate per year and assumed it was a real stretch to get that. We got 6%. Unbelievable.

A momentary aside, you’ve asked me before about the AMPTP’s earlier offer in streaming that would “replace a $20, 000.00 residual check with a $225.00 residual check”. A bumper sticker slogan that’s been repeated often in last few months. While this kind of statement is very useful for keeping people fired up on the picket line it doesn’t hold up under even the mildest scrutiny. It’s apples and oranges.

The statement assumes that streaming will replace network reruns, but for most shows, there are no network reruns. And the shows that do get rerun are rerun because their numbers hold up well on rerun and fill slots (Saturday night anyone?) where it’s not economically feasible to stick in original programing.

The total residual load for a network rerun across the three Guilds is approximately $100, 000.00 per hour. No other form of programming (reality/game shows) is that cheap. That’s why the shows get rerun. And for those shows that don’t get rerun, the studios are dependent on syndicated revenues and foreign sales to make a profit on these shows.

The Companies are going to jealously guard the value of our work to make sure they don’t undercut the syndicated and foreign market value of these episodes. I suspect we’ll find the Companies make most shows available online for the initial “free” promotional window and maybe one 26 week period and the episode will disappear online until the episode has been fully exploited in syndication and foreign. Only to “reappear” online as a library piece some years later in the hope of “soaking up” some library “gravy” after we’ve seen our full syndication and foreign residuals paid.

ONLINE RENTALS

This has not been widely reported, but the DGA was able to get the Companies to reconfirm the 2001 Internet Side-letter. What does the 2001 Internet Side-letter say? Well, in 2001 we were able to get the Companies to agree that all rentals occurring over the Internet would be paid at 1.2% of 100%. The recent announcement of the Itunes deal and the Netflix deal will clearly fall under the 2001 Side-letter and be paid at this much higher rate (four times or more the current average homevideo/DVD rate). As would any Internet “On Demand” models that emerge. This is very important. We had assumed that the Companies would make a run at getting the online rental rate down to whatever their eventual EST rate would be. The DGA made sure that didn’t happen.

This may become our most important rate as the Internet market matures. The Companies have made it clear that they would much prefer nurturing an online rental market rather than an EST market. Why? The EST market is going to cannibalize their highly profitable DVD market. An online rental market will supplement it. This is another big win for all of us.

FINANCIAL REPORTING

Also largely unreported is the DGA’s new language on financial reporting and auditing of these new markets. In an unprecedented move, the Companies negotiated with the DGA to allow the DGA full access to all of their un-redacted financial records and contracts in new media during the term of this new deal. This has never happened before. It will allow the DGA to analyze whether the terms of this new deal are working and if the revenues are being properly reported. This is another extraordinary aspect of this deal and a cause for celebration.

That’s it. The headlines. And because of pattern bargaining in our industry, we’ll get all of it in our contract.

While the DGA richly deserves our thanks and appreciation for negotiating a terrific deal that will serve as a template for all three creative Guilds, none of this would have been possible without the blood, sweat and sacrifice of WGA members during this very effective strike. The Companies made a deal they didn’t want to make because of our resolve. They clearly understood how important these issues were for our members and stepped up to resolve them.

Our Negotiating Committee has numerous issues that are specific to writers that must still be resolved with the AMPTP: the term of our next contract, pension and health issues, separated rights on new media, and jurisdiction for material written for derivatives that will not be filmed (show blogs, web-only stories, etc). But this is a historic deal. We’ve won. The strike was necessary to win it and I can only assume our Negotiating Committee will be sitting down with the AMPTP by early next week to resolve these last, final issues.

It’s a very good day for all of us.

John

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The DGA deal was announced today.

Skip past the news articles and summaries.  They’re incomplete.  For the fuller picture, go here.

Before I give my opinion on any of it, the next thing I’ll write (I guess tonight) will be a careful, facts-only explanation of all of it for those of you less versed in Guildspeak and the arcane nature of some of our formulae.

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Cute.

Here’s what I wrote in my last post.

“The first thing we all have to do is take a good long look at whatever the DGA deal is. And now when I say “we” I mean WE. You, me, Patric Verrone, the NegCom…everyone. If a deal comes out this week, and we have people sending signed letters to our union demanding that we accept it…and if we have union leaders firing RPGs off in the press about how it’s a cave and a sellout…then we might as well just stop pretending we’re in the business of collectively bargaining for employees, strap on some lycra tights and convert ourselves into an Extreme Fighting league.”

In other words, I don’t want pressure groups sending threat letters to our union, and I don’t want our leadership immediately slamming the coming DGA deal in the press.

Pretty simple, pretty moderate.

THR made the “and” into a but…as in, if we send threatening letters BUT the leadership slams the deal, then this would be bad.

The nice thing about blogging is that I know the reporters who read my blog and then quote it will certainly come back and read this.

So guys?

“But” is different than “and.”

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