WGA v THE STUDIOS: Unspinning The Spin
Today, the negotiations began between the WGA and the AMPTP.
Well, at least the formality of negotiations began.
Leading up to this day, I’ve seen quite a bit of spin and positioning. As always, I’m here to try and untangle the truth from all of the hype. I’m keenly aware that there are some in union leadership who honestly wish I’d just shut up, because a membership that only gets their news from Pravda is a Happier membership, but we’re all too smart to be snowed.
And, frankly, I think leadership will probably like this particular article anyway.
Before I start with all that, I want to review some statistics that were released by the Guild in their annual report.
First, Guild members earned 905.8 million dollars in 2006 (under Guild contracts, of course). That’s down 1.5% from 2005, but still up quite a bit from 2004, when we earned 869.2 million. I’m not sure how we’re supposed to reconcile this major increase with our reported loss of jurisdiction. If we’re working fewer jobs but earning more money…could it be that fewer writers are just getting paid more?
It’s certainly possible.
Overall, however, the amount of working writers in the WGAw hasn’t really changed (even if the ones working have). Year after year, with minor fluctuations, about 4,400 WGAw members actually get hired to write. The total amount of “current active” members in the union? 8,084, which is down from 9,216 in 2000.
One thing to note about that: when it comes time to vote for contracts or vote for strikes, nearly half of the eligible voters will not have written under a Guild contract for at least a year. That’s not exactly an ideal political situation to be in if you are a working writer.
Television writing earnings held steady, although that number is practically worthless as an aggregate, since so many TV writers earn large portions of their dough as producers (which isn’t reportable to the Guild). Film writer earnings dropped slightly, but not in any major way.
The foreign levies situation still seems a mire. The program is still holding over $20 million. I’d like to see that number get knocked down into the single digits by ‘08.
And what about residuals? After all, that’s the big issue this year.
Well, WGA writers earned more in residuals this year than in any year prior: $264 million. Television residuals were way up, mostly because the boom in DVD releases of old shows is still echoing.
However, film residuals from home video were down, reflecting the softening of the DVD market.
Wait, I’m sorry…the Guild publication has a different explanation for that…
…this area declined…reflecting the prominence of non-Guild animated features, each of which woud generate a million-dollar residual, and also reflecting the exhaustion of the release of the film libraries into the DVD market, which has been ongoing for about seven years.
That is just dumb. Do we really need to editorialize about non-union work when it’s obviously not the cause of the dip? Non-union theatrical animation has been booming since I was in college. It is not at all a significant cause in the dip for feature residuals. It’s entirely about the DVD market going soft.
I just find bad arguments to be annoying.
Anyway, enough with the statistics. There were two major developments preceeding this week’s start of negotiations.
First, the companies announced that far from being interested in giving us a good residuals formula on downloads, they were now interested in getting rid of residuals altogether and shifting to a profit-participation model.
Awww, that’s cute.
Ummmmmmmmm, no.
Residuals aren’t some rootless payment we argued for because it sounded sexy. Residuals are our financial substitute for royalties. We agree to work for hire, they agree to pay us residuals as if our authorship were meaningful (which it is).
Like royalties, residuals don’t exist to reward us for the companies’ profits. They don’t exist to make us partners with the employees. They exist to compensate us for the reuse of our works of authorship. Plain and simple.
It doesn’t matter how much money a movie makes. Every time you reuse it by selling a DVD or airing it on television or putting it on the internet, you must compensate the author for that privilege.
Don’t get me wrong—I’m a big fan of sharing in profit. But not to the exclusion of what is a basic right of authorship.
Happily, I don’t think the AMPTP is ever going to do this. I think some members would like to do it, but the cooler heads there are well aware that if they attempt to eliminate residuals, the WGA and SAG will strike until their dying breaths. Even worse, guys like me would be happily marching next to guys like Patric Verrone.
Eliminating residuals is simply not an option. It’s a poison pill.
That’s probably why they shouldn’t have announced it the way they did. In my opinion, it made them look a little bit desperate. An insinuation might have been more chilling. A news conference?
Not their best move to date.
Meanwhile, the WGA has suddenly figured out how to play the game. Even though our latest contract bulletin features an article by “Chief Negotiator David Young” (particularly amusing, given how much current leadership hated the fact that John McLean called himself “Chief Negotiator”…meet the new boss….), the star of the WGA for the past two weeks has been not David…not Patric, but…
John Bowman, chairman of the Negotiating Committee.
And what’s so hot about that?
Well, kudos to Patric and David for finding enough to humility to realize that they’ve blown a ton of credibility with the town. On the other hand, Bowman has some legitimacy. He created a hit sitcom, and he was a showrunner, which means he’s had real experience dealing with management in a partnership.
He’s got an MBA from Harvard, so he can speak Corporate.
Most importantly, he’s a fairly moderate guy. I’ve known John for about three years now. He’s calm, level-headed, and completely disinterested in an ideology-driven agenda. He was a great choice to head the NegComm, and I think he’s an excellent complement to Patric’s olde tyme religious fervor.
Therefore, it’s WGA 1, AMPTP 0 as we head into the first week.
Still, this is pretty much all about biding time. We’re not going to make a deal in the next few months. And we will work past our deadline.
The game is still the same. Will the DGA sit back and see if a WGA/SAG alliance can get a good deal? Or will they decide that brings too much of a strike risk, and slip in between to end all the strife?
I hate to say it, but this fight probably won’t get interesting until next April.
I’ll keep updating as it goes…
First, Guild members earned 905.8 million dollars in 2005 (under Guild contracts, of course).
You mean in 2006 ?
Don’t count out DVD revenue just yet: http://vallywood.blogspot.com/
Don’t count out DVD revenue just yet: Lionsgate sees HiDef DVD boon
Craig,
Do you have a guess why dvd residuals are down? Are the payperview downloadie movies included in dvd?
No, home video and DVD doesn’t include internet downloads.
DVD residuals are down because much of the DVD boom was fueled by consumers purchasing older films as well as new ones. Now that most people have bought the older films they want to own, DVD consumption is softening.
I have a question about residuals.
In February 2006, one of the major networks put a free DVD in the major newspaper here - one for every newspaper. It had the first episodes of a few of their new TV series.
It seemed like a good promotion to get viewers hooked - it wouldn’t damage the DVD sales (since it only had one episode of each series) or the TV viewing (since the giveaway was after the episode had aired .. but before the next one).
It would seem that free DVDs (and free downloads) of single episodes would be a great promotional tool - I’m surprised it isn’t used more often.
Is there a special residual rate when an episode is used as a promotional giveaway … or would the lucky writer of that episode have gotten the residuals from 100,000 + DVD sales?
Mac
Mac:
Since residuals are calculated as a percentage of revenue (not profit), in the case of the free DVD, there is no revenue, so there are no residuals to be paid.
This is an annoying little area called “promotional use.” DVDs generally aren’t given away for free, so it’s never been a big issue. However, the companies are attempting to argue that much of what they do on the internet is “promotional,” even when they charge money!
And that’s something we’re going to have to fight.
Hmm .. It makes sense - but even if the DVD was ‘free’ to the consumer (well, included in the sale of the newspaper) it wouldn’t have been ‘free’ for the newspaper … I’m sure they paid SOMETHING for the ‘free’ DVDs to distribute.
Since it is calculated using overall revenue, though, it would seem to be included.
Mind you, I’m not sure I’d trust someone who argues that ‘The Simpsons’ has never made a profit to calculate what revenue was truly earned!
Thanks for the info,
Mac.
It amazes me that this entry only has eight (now nine?) comments while the Leapfish one garnered 26.
Anyway, thanks Craig for clearly and concisely demystifying the whole WGA negotiations process for us. I’m not a member of the union (yet!), but I’m very interested in what’s going on—and the whys and hows behind the scenes.
I was talking with a makeup artist (member of IATSE I think?) a couple of months ago and she adamantly INSISTED that the WGA would be striking. Or so her union tells her. Any comment on that?
Stella:
Maybe I was so clear, no one had anything to say! :)
I know. Not likely…
Anyway, here’s my comment on your IATSE friend. I think IATSE leadership (particularly Tommy Short) is both specifically against the current leadership of the WGA and generally against above-the-line union leadership no matter who’s in charge.
Below the line folks resent the fact that above-the-line unions even consider striking (and thus eliminating below the line jobs) over residuals, which no IATSE member gets at all.
To oversimplify, IATSE folks think writers, directors and actors are spoiled, overpaid, greedy mofos whose temper tantrums for yet even more money do nothing but ruin the livelihoods of blue collar film workers.
There’s a kernel of truth to that, but there’s also the difficult fact that were it not for the prima donnas in the WGA, DGA and SAG, there wouldn’t be any film sets to work on at all.
Management, of course, delights in this kind of inter-labor strife.
I tend to sympathize with IATSE members, in part because I am one as well, but mostly because I’ve spent a lot of time on sets, and the crews in Hollywood are outstanding and hard-working, and deserve more notice and respect than they get.
That’s one reason I’ll never take a “film by” credit.
Also, I think the WGA needlessly antagonized IATSE during their abortive attempt to organize reality TV editors into the WGA.
However, Tommy Short is one of those guys who tends to point fingers outwards to distract from internal failings. That’s why he’ll blame the WGA for problems in IATSE when he should be blaming himself for years of so-so contracts.
Craig,
Thanks again for the most illuminating information! As an outsider (right now!), it’s so great to have someone disseminating the “real deal” as it were.
You’ve said in the past you don’t think the WGA will strike. Do you still feel that way?
I’m less optimistic than before. I’m at 50-50 right now.
So, the average working writer made $205,000 in 2006.
Who exactly are we supposed to be feeling sorry for?
This whole “we’re the downtrodden working class” schtick is, frankly, dishonest. And boring. As with every other union, the world would be better if individuals were compensated for their individual performance, and paid more as a whole just to avoid their thuggery.
The idea of Hollywood writers on strike is only slightly less ludicrous than if Hollywood actors were to strike.
Does the strike mean that we will be spared from further atrocities like “The Biggest Loser” and “Flash Gordon”?
People in the entertainment industry tend to think they’re the most important people in the world. Maybe it’s time you all got over yourselves.
Unfortunately, most of the American public will dutifully watch whatever mindless pablum is placed in front of them, so WGA minions will continue to make a billion dollars a year writing what is largely crap.