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No, Brooks. No.So far, the WGA-AMPTP negotiations have gone pretty much how I expected. Both sides started very far apart, and any perceptible motion seems to indicate a widening of the gap. No one seriously expected a deal to be brokered; everyone’s working under the assumption that the WGA will work past expiration, and the AMPTP won’t really start bargaining until they have to face SAG or the DGA.

Still, that doesn’t mean there’s no room for journalists unfamiliar with our industry to lob Molotov cocktails of fiery ignorance into the breach. Ladies and gents, I give you Brooks Barnes and his artitorial on residuals in the New York Times.

Enjoy the slant. It’s delicious.

SCENE STEALER
In Hollywood, a Sacred Cow Lands on the Contract Table
By BROOKS BARNES

Jasper Johns isn’t paid based on the number of years his flag paintings remain popular attractions at museums. Rem Koolhaas doesn’t cash a check every time an architecture fan takes a trip to Seattle to see his space-age public library. So why should the writers, directors and actors responsible for box-office bombs like “Gigli” be able to pocket some cash every time somebody buys the DVD?

It’s a question that cuts to the heart of the biggest fight in Hollywood these days and sums up a fundamental choice the troubled entertainment industry needs to make: whether to cling to old blueprints for running the business or to draft a whole new set.

Brooks couldn’t make it out of the first paragraph without mangling logic, but I let him run on to the second paragraph, because I really enjoyed how he thinks a question he poses out of ignorance is, therefore, a really important question.

When an author creates a work of visual (or, in the case of architecture, “sculptural”) artistry, he holds copyright as well as certain moral rights (yes, even in the United States). That artist can control the display of that work. However, if the artist chooses to freely display his work, so be it.

If you paint a painting on the sidewalk of New York, and I walk by it, my simple act of looking at your artwork doesn’t infringe on your copyright or your authorship in any way. I’m not copying it, I’m not making a derivative work of it, I’m not destroying it and I’m not exhibiting it.

I’m LOOKING at it.

Hey, Brooks….I’m just looking.

That’s not at all analogous to our circumstance as screenwriters. While we do not hold copyright, we are acknowledged by the copyright holders (the studios) in very real ways as part authors of our works. Those copyright holders exploit our authorship for money.

They make copies of our work of authorship. They make derivative works. They exhibit it for money. And yes, they occasionally destroy it.

Just as an author of a book receives royalties for copies that people can possess, so too should we receive residuals for copies that people can own and enjoy.

Or, to please Brooks, if Rem Koolhaas wants to sell little models of his cool library, the manufacturer should pay him a royalty for every item sold.

Duh.

The spat, as always, is about money.

That’s a nice piece of reductive reportage. It’s a bit like saying, “John Smith awoke to find a strange man in his bedroom, rifling through his wife’s jewelry drawer. The ensuing spat was, as always, about money.”

It’s not about money per se. It’s about our rights and our due as authors of the movies we help birth.

Writers, who started talks with studios last month for a new three year contract, want to be paid the way they always have. Movie script writers get an upfront payment, now at least $1 million for a major film, according to studio executives. Screenwriters then receive a residual whenever one of their titles is put on DVD, shown abroad or otherwise resold. Under the same system, a typical TV series writer may get $30,000 an episode, plus residuals.

If any of you know Brooks, could you please ask him to just call me before he writes about Hollywood again? Movie script writers get “at least $1 million for a major film” now??? Really? Last time I checked, scale was still in the five figures. Yes, there are some of us who get paid over a million dollars for a screenplay…or for all of the drafts required to get a movie made. I’m guessing there are about 150 screenwriters in that club in the entire world. Plenty of movies get made where no writer gets paid more than a million.

The residual payments vary widely, depending on a maze of formulas.

Yes, it’s true. There is a maze of formulas. For instance, in movies, there are two.

Two.

The maze is just…arghhh! Can’t find my way out!

A lead writer might earn hundreds of thousands from the DVD sales of a blockbuster movie; a junior member of a writing team for a dud might get a few thousand or less.

Lead writer? Junior member of a writing team? Brooks, sweetheart…please…talk to a screenwriter before your fingers hit the keys. There are no “lead writers” in movies. There are no “junior members.” We’re not grips. We don’t have apprentices. Either you get credit for authorship, or you don’t. Doesn’t matter how old you are, how much you get paid or how long you’ve worked on a project. All that counts toward credit and residuals are the literary contributions you make to the final screenplay.

Studios want to junk the residual payment structure, which dates to the early 1950s, when the fledgling TV business borrowed it from radio. Under their proposal, unveiled with unexpected zest in early July by Barry M. Meyer, chief executive of Warner Brothers Entertainment, so-called creative employees would get residual checks only after the studios have recouped their basic costs.

Have a cookie, Brooks. You made it through a paragraph without getting anything wrong. Except that “so-called creative employees” really are, in actuality, creative employees. Qualifiers not required.

The two groups have reasonable arguments.

This is what I mean by “artitorial.” Is this an article or an editorial? If it’s an article, then what’s with the opinion? And if it’s an editorial…

…you’re totally wrong.

The other side does not have a reasonable argument.

In coming weeks and months, as both sides start huffing and puffing with even more intensity, the writers will declare that they can’t trust Hollywood accounting as to when costs are covered. They’ll also portray the effort to redraw the residual map as a huge rollback in wages. Young writers in particular will be hurt, they say, because they rely most heavily on residual income from failed movies and programs.

Oh, that crazy huffing and puffing! Through huffing and “portrayal” and “they’ll say” arguments, we’ll manipulate the truth!

Except that it is the truth, and no manipulation is required. Anyone whose brain stem is attached knows that Hollywood profit accounting is a joke. No film is ever reported to be in the black. Every film “loses money.” Every…single…one.

This is fact.

Expect studios to battle back with hard facts on finances.

Ah, but see, Brooks thinks that while we engage in huffery and tricks, the studios have “facts” on their side. Unbelievable.

While almost every project turned a profit when the residual structure was enacted, 6 out of 10 movies today will fail to make money even after they are distributed across multiple platforms, according to the Alliance of Motion Picture and Television Producers. On the TV side, almost 90 percent of modern series fail to make money. Studios argue that it’s ridiculous for a business to pay bonuses before it makes back its initial investment.

I’m going to presume, generously, that the above statistics are absolutely true.

So what? If 10 out of 10 films used to generate an aggregate profit of $100 million, and now only 6 out of 10 films are profitable, generating an aggregate of $900 million, then why should I give a damn? These statistics mask an obvious fact of modern Hollywood: franchises are rarer, but endlessly profitable. In short, you need fewer hits than ever to make a ton of dough.

Oh, and residuals AREN’T BONUSES, Brooks. They’re a negotiated equivalent to royalties. They are compensation for the reuse of works of authorship. They’re not a reward for a job well done. They are a payment for continued exploitation of a property.

Already lost in this tit-for-tat skirmish, say analysts and economists who specialize in Tinseltown’s peculiar business models, is the magnitude of the studios’ decision to simply put the residual structure on the table. The studio bosses probably haven’t figured out the best solution, said Josh Bernoff, a media analyst at Forrester Research, but perhaps for the first time they are insisting that cosmetic tweaks to their way of conducting business won’t work.

Hey, Josh Bernoff…you listening?

You got rooked by a frickin’ press release.

Even the studios don’t believe in this crap. It’s an opening salvo in what will be a very long negotiation. The fact that Forrester is often hired by the media corporations we’re negotiating with (and never by, say, me) may have something to do with their narrow view.

At a time when the likes of Paramount and Warner Brothers are having trouble turning a profit on movies that gross $200 million at the box office and the Internet is rapidly making the concept of intellectual property a quaint notion, the sacred treatment of residuals has an air of unreality, according to some economists.

Ridiculous. Anyone in this business knows enough to know that if you gross $200 million at the box office, you will absolutely be generating profits every single time no matter what the movie is.

Every…single…time.

“There is a good question about why they even pay residuals in the first place,” said S. Abraham Ravid, a visiting professor of economics at Cornell, who recently studied how studios price screenplays differently, based on writers’ box-office track records.

Oh God. And now a floating quote from that great center of Hollywood, the inheritor of Lew Wasserman’s throne, the mastermind behind the movie business…

…Mr. S. Abraham Ravid.

Where do they GET these people? It’s only a good question about why a company should pay residuals if you are:

• ignorant of our business
• ignorant of copyright law
• ignorant of the role Mel Nimmer played in creating the residual structure

Few components of Hollywood’s crumbling business model

Sorry, Brooks, stopped reading after you managed to call one of America’s healthiest business models “crumbling.”

John F. Bowman, chairman of the Writers Guild of America’s negotiating committee, said he disagreed with the sacred part, but that untouchable was fair enough. “These are wages to us,” he said. “They’re not bonuses.” He said he thinks that the studios are using the scary-sounding residual retrenchment to make their real target—using material on the Internet without paying a hefty residual—more palatable.

Arghhh! Bowman, you’re not helping! Residuals are not wages. If they were, then yeah, the companies could argue that “you’re paid too much” and our only argument back would be “no we’re not!”

Residuals are compensation not for labor but for reuse of copyright!

We need to start getting that right…because if we don’t, it’s not likely that the Brooks of the world ever will.

John BowmanNow that the Kabuki Theater of negotiations is officially underway, I thought I’d reprint John Bowman’s opening remarks made on behalf of the WGA Negotiating Committee.

I really love this speech.

I love it because it’s the perfect tone. Calm, reasonable, business-oriented, without a trace of Norma Rae nonsense, no whiff of the words to “Joe Hill,” and no detectable mouth foam.

All in all, a huge step forward for us.

Naturally, Bowman had to put in plugs for a better home video residual rate and jurisdiction over animation and reality, but everyone knows those are essentially DOA. This fight is about downloads, and he’s positioned us strongly. With generous references to authorship and intellectual property rights, Bowman sure sounds like an Artful Writer to me.

I like what I’m hearing from my union right now, and it’s been a while since I could say that.

Here are John’s remarks.

---

First of all, I want to congratulate our corporate partners at CBS, Time Warner, News Corp., Disney, Viacom, and NBC-Universal on what appears to be another great year for entertainment revenues and profits. Box office is up, and broadcasters are getting ad rate increases across the board, driven largely by digital content created by many of the people in this room. We are all of us very fortunate to be working in an industry that is thriving. It is thriving not only because of the content created by members of the DGA, SAG, AFTRA, and the WGA, but also because the CEOs of these companies are proving to be extremely adept at finding ways to monetize the Internet and other new technologies.

There is a real disconnect, however, between what the companies are reporting to Wall Street and what they’re saying to the talent community. Investors are hearing about the changing landscape in entertainment and exciting new markets to exploit. In contrast, the AMPTP communicates nothing but problems to the Writers Guild. Problems like-and this was mentioned by AMPTP at a recent press conference-ad skipping, even though NBC Universal had just announced a one billion dollar DVR deal. And while WGA member revenues have not kept pace with industry growth-we are a line item that is definitely under control-the companies balk at giving us a fair and reasonable share of the industry’s success.

I don’t think anyone in this room is arguing about the right of writers, actors, and directors to residuals. As collective authors of a work, we are entitled to a portion of the revenue generated by that work. But you have publicly stated that you no longer want to pay us residuals on shows that are not in profit. Here’s why that is untenable:

Writers are a cost of doing business. They have no say in production, marketing, on advertising and publicity, directors, casting, the decision to spend tens of millions of dollars advertising, etc. They can’t be expected to be paid from profits when they have no say in the costs which affect those profits. Profits are under the control of CEOs and their executive staffs.

Intellectual property has rights, just as physical property does. Management has no problem paying the person who made the DVD box before a film turns a profit; they shouldn’t have any problem paying the artists who created the intellectual experience that came in that box either. To claim that intellectual property has lesser rights than physical property is a dangerous argument for anyone in our business to make. You are making the same argument to us that digital pirates make to you.

According to Hollywood accounting, The Simpsons is not in profits. How can we trust that kind of bookkeeping? What other business but ours has the accounting term, “monkey points?”

Residuals from shows not in “profit help” support a writing middle class, and keep writers in the business until they finally create that one great thing. Do away with residuals, and you do away with late-blooming careers like Marc Cherry and David Chase - they couldn’t afford to stay in the business. Your proposal transfers money from developing, promising writers, actors, and directors who need them the most to established pros who need them the least. It’s bad for the business.

Ultimately, your complaint is not about unprofitable shows, it’s about the portfolio nature of the entertainment business. Risk is spread out among many shows, some of which are unprofitable. This economic fact will never be changed, even if writers work for free, as you propose they do on the Internet.

Now let’s turn to your proposal that we do a three year study before bargaining about the Internet. Your reasoning is exactly the same as it was in 1985. Models haven’t emerged, the environment is uncertain, we’ll take care of you later. Well, we know what happened then. Home video and DVD sales soared, and nobody got taken care of later. But this isn’t 1985, when TV writers didn’t envision that their shows would someday end up on DVDs, and they’d get stuck with a .3% return. This time, TV writers can see how important the Internet is - our shows are already there. And, unfortunately for your argument, positive economic events are daily giving the lie to your doomsday scenario.

But if you insist on a study - I used to do studies for a living - I’ll give you one now. The Internet is a distribution channel with no major fixed costs, no media costs, no shipping or handling costs, and margins that are the envy of even the cigarette industry. Though you lose your monopoly on distribution, you have a strategic advantage that nobody else has: strong relations to the talent community. Above all else, nurture this relationship. If you don’t-if, for instance, you insist that members of that community not get paid for three years, or get paid, at most, a .3% residual rate, what possible incentive would they have to work for you? What incentive do they have to help you fight video piracy, when they’re only getting .3%? If you don’t pay them someone else will-Yahoo, Youtube, who knows? It won’t happen overnight, but it will happen, and very quickly indeed, if you bargain so unreasonably that you force talent to go elsewhere for a fair deal. Of course this study is flawed, but then all studies are - you can make them come out any way you want to.

I can imagine an NBC-Universal Wall Street press conference, 18 months from now. Revenues are down, profits are down, due to a work stoppage which you, the AMPTP, collectively, forced. Shareholders are restive. They ask the company this: “Your industry paid 84 million to fire Tom Freston, 300 million to invest in “Last FM.” Yet at a time when it was absolutely crucial that we establish a presence on the Internet, you chose to alienate content providers, the best strategic advantage you had. And you made this catastrophic decision over how much money?

Today you’ll receive our proposals. They are designed to help writers keep up with the overall growth of revenues in our business. Our operating principle is simple: if you get paid for the reuse of our material, we get paid. So let’s now back away from the edge, get real, and get to work. Studies and profit-based residuals are not serious proposals. They have no legitimate basis in the economics of this industry. They are non-starters for this committee and membership. Our response to such proposals will be a polite “no thank you.” But there are serious issues to discuss, issues that come directly out of our real relationship. Those issues are:

How we will share new media income

How we will produce material together for new media

How we will deal with the non-union shell companies that you’ve created to avoid paying the talent, especially on reality and animation

How talent will get a fair share of home video money

How we will work together on issues like piracy

How we will work together to make sure that new technologies are a boon for all of us

These are real issues. Writers and the talent community deserve to keep up and we have not been. All of our proposals will be focused on that central fact. Writers have to keep up with the industry growth that we help create. It is simple and fair. We look forward to your response, and thank you.

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…

In the last article, I wrote about what I perceive to be a growing gap between the way writers look at new ways to gain power and the way writers’ representatives look at new ways to gain power.

To summarize, the writer’s model is a traditional one, in which writers work as employees and collectively bargain with management for better terms…hoping to move our participation in revenues forward…and pursuing a strategy of organizing and strike threats to achieve this goal.

The representatives’ model, which is currently evolving, works a little something like this.

In the future, a filmmaking unit will not work as employees for a studio. Rather, the filmmaking unit (writer and director and perhaps star) will present their vision of a movie to a group of independent financiers, who will form a partnership with the filmmakers. Obviously, this is nothing new. Hell, just about every indy art film is made this way. What’s changing is the amount available.

For the sake of argument, let’s stipulate that the financiers will spend about 25 million dollars to finance the film, and in exchange for that, they will own 75% of the film. The filmmakers will still get paid their normal front-end salaries, but they will also own 25% of the film.

The financiers do not give notes. They do not request final cut. They have simple terms like “it has to be PG-13 or R” and “it can’t run more than 120 minutes.”

While the film is in production, the representatives shop it to studios. They state that given the economic realities of foreign sales, broadcast fees, etc., if a studio purchases the film for 40 million dollars, the studio pretty much knows they can automatically make that back and then some, just by dint of standard global exploitation of the property.

The studio buys the film for 40 million dollars. The financiers recoup their 25 million dollar investment, leaving an additional 15 million, which is instant profit.

The filmmakers’ 25% nets them nearly four million in additional cash. But that’s just the beginning.

The studio will spend money to market and distribute the film. Let’s say that they spend enough to offset the entire worldwide theatrical gross of the movie. No problem. As everyone knows, the profit is entirely in the video. That’s the free money. Because the studios rely on video for their profit, they have been loathe to share it with the artists.

The WGA strikes in ‘85 and ‘88 were over video residuals definitions. If we strike in 2007, it will be over internet video residuals definitions.

Currently, a writer receives 1.5% of 20% of the studios’ video earnings.

Surely that number is better for big stars or big producers, right? Well, maybe bigshots can do better than the 1.5%, but everyone gets screwed on the definition on the earnings. In the WGA’s case, it’s that 20% number. Some people get that number to 25%. Really big-time producers and stars can push it to 35%.

But financiers? The people who post the cash to finance the film?

100%.

In our example, the filmmakers are partnered with the financiers, so they piggyback on to the 100% definition. Now let’s say the sales deal to the studio included a 15% share of the video. Our filmmakers’ take would be nearly 4%.

4% of 100%. As opposed to 1.5% of 20%.

In other words, 4% vs. .3%. The video earnings would be 13 times as much as you would normally get.

If you’re talking about a decent hit, it’s the difference between earning a few hundred grand in residuals…and earning 30 million dollars in video profits.

Now, think that’s all crazy talk? Think that’s never gonna happen?

What if I told you it happened last week?

Instead of selling his next script to a studio, Sascha Baron Cohen packaged his next film with independent financiers for 25 million dollars, presold it to Universal for 42 million dollars, and will likely earn tens of millions if the movie does decent business.

Sascha Baron Cohen has leapfrogged beyond unions. He has leapfrogged beyond employment. He is an owner now.

Think this only works if you’re a star as well as a writer? Well, the filmmakers of Babel did the same thing. It’s happening more and more now, and I think it’s the wave of the future. Mid-sized budget films are going to be independently financed, and the studios will simply serve as releasing companies, providing the services that they provide best (marketing and distribution).

Why would the companies allow this?

First off, they’re not. They’re being competed against by new money, and if Baron Cohen wants to partner up with some Wall Street money to make his next movie, there’s nothing they can do about it.

Secondly, the very corporatization and conglomeratization that unions fear is very likely a source of advantage for entrepreneurs. The studios used to fly by their gut. No more. They’re not in the business of building a library that will pay off huge dividends in the future. They’re in the business of increasing their stockholders’ value right now, and that means minimizing risk.

As one agent explained to me, “Just about every studio film is now cofinanced with another studio or an independent partner. If they’re going to hedge their bet with outside money, why shouldn’t you be that outside money?”

In my mind, reliable filmmakers who shoot genre films for a price will be the immediate beneficiaries of this new model. Think Baron Cohen, Judd Apatow, Eli Roth and so forth. It will spread, though. Once a writer makes 30 million dollars on a movie that only earned, say, 90 million at the box office in the U.S., every single writer in Hollywood is going to want to do the same thing.

What’s the practical effect?

Studio development will wither away.

Production companies that aren’t based around artists will wither away.

The unions and studio management will continue to negotiate contracts that will cover fewer and fewer artists.

Total filmmakers will be rewarded.

Specialists will not.

Granted, this could all be crazy talk. Maybe what Baron Cohen and Guillermo Arriaga (Babel) did is just a brief quirk in the Hollywood timeline, and we’ll all be laughing about it five years from now.

Something tells me, though, that this trend will continue because it makes sense. If it does, we may finally get everything we ever thought we deserved.

And then some.

Edited to add: Ted just alerted me to an L.A. Times article about this very topic. Of particular note is the paragraph that describes how Tony Gilroy wrote a script, then declined to sell it to a studio, preferring instead to meet with private financiers.

Two weeks ago, I terminated the services of my manager. Since I had been without an agent for a number of years, it was time to go out and get one…and I hit the shark-infested waters like a nice bucket of bloody chum.

This essay isn’t about whom I’m choosing or why. It’s about the gap between writers and businessmen in the way they perceive our business, its future, and what ought to be done about it.

Over the course of the last week, I met with fairly high-level agents and occasionally the highest-level agents at CAA, ICM, UTA, William Morris and Endeavor.

While each agency has its own personality and each group of agents is unique, the perspective that the agencies have about the future of the business is fairly uniform. It’s also shockingly different than the perspective of the average writer about the same topic…and it’s miles apart from current WGAw leadership’s point of view.

I’ll attempt to articulate the two viewpoints, and in doing so, I suspect you’ll begin to see just how far apart the two groups are.

The WGAw leadership views the business through the traditional lens of management and labor, i.e. management exploits labor, thus labor must form a collective to demand fair treatment from management. Furthermore, since there are only five or so conglomerates that form management but thousands of individual writers that form the bargaining collective, numbers are key. Current union leadership believes that if striking is the ultimate gun to management’s head, jurisdiction is the caliber of the bullet.

The WGAw theory is that the more writers they represent, the more powerful they are.

In terms of the future of the business, the union’s viewpoint is that no matter what the future brings, be it digital delivery or an all-reality TV world or developments yet unforeseen, labor must continue to be fairly compensated through minimums, pension and health care and residuals. If not, then it’s war! We will strike and cripple the industry! And above all, massing numbers and creating labor unity is essential because the studios have become global conglomerates.

They’ve increased their power, thinks the Patric Verrone acolyte, therefore we must increase our numbers.

While it’s hard to characterize the perspective of the rank and file of the WGAw, I think I’d be fairly safe in saying that it’s pretty close to this: writers want more job opportunities, want to be paid better for those job opportunities, want to be treated better by their employers and want to participate more in the exploitation of the properties to which they contribute authorship.

Got it? Okay, good. That’s one side of the chasm. Let’s walk across the bridge to the—

Wait. Can’t build a bridge that long.

Helicopter?

Not enough gas.

Let’s get into a 747 and head on over to the other side, shall we?

First off, remember that I’m talking about businessmen who advocate for writers, directors, actors and filmmakers. If the other side were the companies, then their perspective would be an obvious set of antipodes to the writers’ views. We ought to be paid less and get no residuals, because that’s what their shareholders tell them to think.

The advocates are far different. In fact, the advocate businessmen seem more pro-writer than most writers or their union.

Well…scratch that. More pro-good-writer.

They don’t view anything through the prism of labor vs. management, a dichotomy that’s always been questionable in an industry like ours. Instead, they look at the business as swirling circles of financial interest.

And they see changes.

They see studios drastically cutting development budgets and even more drastically reducing output of self-generated films (for instance, Disney and its affiliates put out more than a movie a week in the early 90’s, but they’re now planning to make maybe eight total for 2008). They see massive layoffs of creative executives who used to be charged with sheparding film development. They see fewer and fewer “open” writing assignments, and more and more films being birthed by creative nuclei (writers and directors and producers and actors).

Most interestly, they look at the globalization and corporatization of the studios as an opportunity for artists, because to a one, the corporations that comprise Big Hollywood are more risk-averse today than ever before in their entire history.

The businessmen advocates don’t really care about strikes. To them (and probably to the companies), strikes are short blips on a long-term radar. The WGAw and many writers are looking at Hollywood as employers they have to fight, and the businessmen advocates are looking at Hollywood as a business in trouble that they can exploit.

And how?

Since the first schmuck with an Underwood typed “Fade In”, writers have believed that they contributed the thing of most value. By value, some might argue creative value, but I’ll demur on that for the sake of this argument, and stipulate instead that writers contribute the thing of greatest economic potential.

Sorry. I did it again. Good writers contribute the thing of greatest economic potential. Put a good writer together with a good director, and you have the two people who contribute the lion’s share of what constitutes economic potential. Throw an actor on there, and you’ve got 99% of the economic potential.

Take that fact, add two cups of studio fear and mix in a quart of modern economic realities…and you get the thing artists in Hollywood have been clamoring for since The Great Train Robbery.

Ownership.

More to come….

Will work for
access to set…A reader wrote in with a question about the WGA’s preferred practices, but rather than dump a quick answer off in the Q&A bin, I thought I’d write a larger piece about the creative rights and preferred practices enshrined in the MBA for screenwriters—and what they actually mean for us.

All professional screenwriters have at least one or two awful tales about how they were discarded from or poorly treated on the production of a movie they wrote. In response to a seemingly unending march of boorish behavior on the part of directors and producers, the WGA began routinely demanding creative rights gains in each collective bargaining negotiation.

This is a brief summary of some of the bigger ones. For the whole kit and caboodle, get thee as always to the WGAw website.

Coverage Can’t Be Sent Around Town

That’s right. The studio can blast your script to pieces in its internal coverage, but it’s forbidden from emailing that coverage to another studio or producer inquiring about your work.

The Right of Prima Scripta

Okay, I just made that Latin phrase up, but the idea should be obvious. If you sell a spec, you are entitled to the first rewrite on it. Furthermore, if you’re still the only writer on the project and a new “element” is added (a director or star), the company must hire you for the next draft.

Consultation on Notes

The studio can’t just give you notes and refuse to talk about them with you. This is a curious right, because usually we can’t get the studio to shut up about notes. Remember this one, by the way. I’m going to refer to it at the end when I make my Big Point about all of this.

Authorization of Rewrites

Remember our big discussion about free rewrites? That’s what this attempts to address. Your contract must include the name of the person authorized to actually request a paid draft. Sadly, this person is usually the head of the studio, and typically you’ll never speak to them. A shell game, really.

How Many Writers???

If you’re called into to pitch on an assignment, and you happen to be so bold as to ask how many other writers are being called in to pitch on the assignment, the studio has to be honest about it. Roughly.

You’re Covered Under Their E&O

This is a big one. When you write a movie for a company, they must include you under their errors and omissions insurance policy, and they must indemnify you for legal expenses and damages. After all, they’re the official “author”, right? Makes sense, and a big protection for WGA writers.

You Get To Describe Your Vision To The Producer

Yeah, that’s right. Before production begins, you have the right to a meeting with the producer to talk about all aspects of production involved in translating your screenplay to film. Of course, what would really be great would be a meeting like that with the director, right? Well, that’s a “preferred practice.”

“Preferred practice” is a nice way of saying “the companies don’t have to do it if they don’t feel like it.”

Call Sheets

You must be listed on daily call sheets, and the currently employed writer is entitled to receive a daily call sheet when issued to the crew.

Table Reading?

Before a movie shoots, the cast sits around a big table and reads the script out loud. Theoretically, this would be the most important preproduction event for a writer to attend. Alas, we do not have a right to be there. Why? Because the DGA doesn’t like the idea of it. It’s not that directors are all insecure egotists. Some writers have shown up at those things and acted like jerks. On the other hand, the fact that this isn’t a right and is merely a “preferred practice” is quite ridiculous, and I’m hoping that will change.

Set Visits

We have a right to visit the set of the movie we wrote, but that right is subject to the director’s approval. So, umm…what the hell kind of right is that?

First Class, Baby!

You fly to a gig, you fly first class. Non-negotiable. Booya!

Cast And Crew Events

If you work on a movie, you get an invite to the cast screenings or the wrap parties. If you live in L.A. and the wrap party is in Saskatchewan, they don’t have to pay for you to get there. But you do get an invite. Notice that I didn’t say “premiere”, right? See, here’s another fun little “right” that we have. We have the “right” to attend the premiere and press junket of the movie we write…unless the company notifies us otherwise. Sigh.

Writer’s Viewing Period

The writer is owed a chance to screen a cut of the movie and give notes on it in enough of a timely fashion so that those notes might actually be incorporated. By someone. Theoretically.

A VHS Copy!

Yes! They owe us a VHS copy of the movie we wrote!

What’s a VHS?

Hey, we also get a copy of the script! Sigh.

As you can see, some of these rights are important and clearly well worth fighting to keep, while others are either pseudorights or completely worthless. What’s fascinating about this list, however, is that it’s essentially an insight into basic professional courtesies that have been denied screenwriters.

If they hadn’t been denied us, we wouldn’t have collectively bargained for them. Unfortunately (and here’s the Big Point, y’all), there’s a difference between getting a rule on the books and actually getting treated with courtesy. You can’t legislate good will. We can force the companies to let us watch a cut of the movie so that we can give notes, but we can’t stop them from not caring about a single thing we say.

That’s why my personal crusade has been to try and move professional screenwriters away from standing on these rights and demanding them like Norma Rae, and move screenwriters toward practical real-life solutions that actually improve the relationship between them, the employers and the director.

It’s significant that we have the right to discuss our vision with the producer. I can tell you, though, that it’s far more satisfying to have the producer call you and say, “Hey, we should talk about the movie before the cameras start rolling.”

The WGA is a labor union, and it must live in the world of institutions and bargaining. It will be very challenging to make real creative rights gains at the negotiation table. Positive working relationships are not governable by contracts. They just happen…or they don’t. Remember that right about “consultation on notes”? Well, apparently some studios were just handing some writers notes and refusing to discuss them further. Why would a studio ever do such a thing?

Probably because they had zero interest in that writer actually succeeding. The working relationship was bad. Now, thanks to our creative rights, they have to discuss the notes with that writer.

That won’t change a single thing about the way they feel about the writer.

Know your rights, but do what you need to do so that you get all those things you’re entitled to without having to ask.

Like this, but less evilIt is better to light a candle than to curse the darkness. Brothers and sisters, we writers are living in the darkness, and all I hear around me is cursing. The companies that employ us change the rules, they slip through loopholes, they invent new definitions and theories and business plans, and we’re constantly running after them, wondering why we’re always behind.

We have two real weapons. The first weapon is unity.

We’re not so good at that. I’ll talk about unity some other time, maybe after I pop a Xanax or something.

The second weapon is knowledge.

We’re awful at that. Every deal we make, every contract we sign, every bit of business we do as WGA members is governed by a master contract. The Minimum Basic Agreement. We can always do better than the MBA, but we can never do worse. It holds the keys to our minimum salaries, our residuals, our credits. It is the DMZ between us and the companies. It’s the battlefield where we wedge our way towards victory or get clobbered in defeat.

It is, in its enormous totality, the evidence of our struggles and our collective history.

And none of you have ever read it.

When I ran for the Board of the WGAw a year or so back, one of my campaign promises was to do what I could to help educate our membership, and one of the ways in which I promised to do that was to publish the MBA online. Traditionally, the MBA was available only by calling the Guild and having them mail you the book.

Yes, it’s a book.

The problem wasn’t one of mere reluctance. Typical of a monopolistic bureaucracy, the word processor files for the MBA were archaic and weird and not even pdf-able without a lot of work.

However, the DGA had managed to get their contract online, as had SAG. And so, with much pushing and forcefulness and nudging, I finally made good on my promise.

The 2004 WGA MBA is online, available to anyone. Because of its size, it’s been split into a few pdf files. The good news is that each file is searchable.

This seems as good a time as any to recommend the excellent PDF Plugin for Mac OS X. It allows easy viewing of pdf files right in your browser.

The MBA is enormous, and it’s a legal document, so it can be confusing and bewildering and, well, boring. There are some spots, however, well worth peeking at.

Article 1 contains the definitions that govern the document that, in turn, governs us. Learn who meets the definition of “writer,” for instance.

Articles 6 and 7 describe how the WGA and the AMPTP companies create the exclusive relationship between us, and under what conditions we can strike and under what conditions they can lock us out.

Article 9 explains how you can’t do worse than the MBA terms, but you’re always free to do better.

Article 13 lays out what “scale” is for every kind of job writers can do. If you’re wondering what you’re supposed to get paid, this is the mother lode.

Article 16 is the complete and definitive version of my skinny on separated rights.

Article 48 contains the slowly-advancing “creative rights” that we have made over the years, and should give you a sense of what we’ve been able to achieve…and what we haven’t.

If you don’t read anything else, read Article 51. Entitled “Supplemental Markets,” Article 51 is ground zero of our residuals battles. It defines residuals, it delineates the various formulae that govern them, and it contains the odious clause that, in 1985, slashed our residuals down to a fifth of their size. That little clause caused not one, but two strikes.

It may yet cause another. Read the Article. Educate yourselves.

If you only want to read two things, then after you’re done with Article 51, read Theatrical Schedule A. Boy, that sounds sexy, huh? Theatrical Schedule A is the basis of all of our credits guidelines for feature films. Within Theatrical Schedule A, you will find definitions of screenplay, story, literary material, and practically everything else you’d ever want to know about how and why our credits work (or fail to work) they way they do.

Okay, one last one. It’s an easy one.

As the MBA gets renegotiated, it’s often easier to create “side letters” that amend the main contract, rather than go into the main contract and start rewriting.

There is one extremely important side letter in the 2004 MBA, and I believe it will be this single three page document that will rest at the heart of not only our negotiations with the AMPTP, but SAG’s and the DGA’s as well.

You can find it on page 563. It’s very short. What it says of particular relevance is:

Where the subscriber pays for the program either on a subscription or per-picture basis, and where the payment is in exchange for the right to view the motion picture for a fixed and limited period of time or a fixed number of exhibitions, the Company shall pay to the credited writer an aggregate sum equal to one and two-tenths percent (1.2%) of the license fee paid by the licensee for the right to exhibit such picture on the Internet.

This sideletter gives us 1.2% of 100% of the companies’ gross on internet rentals, versus our formula of 1.5/1.8% of 20% of the companies’ gross on DVD sales and rentals.

The battle will center around internet sales. We believe we are legally entitled to sales by our definition. They do not. And so it goes.

There’s a larger point here, of course.

I know this stuff isn’t fun. I know it’s homework.

Do it anyway. Don’t rely on your elected leaders to do it for you. They’re just writers like you, and in my experience as a member of the Board, most of them aren’t particularly well-versed in the MBA either. Educate yourselves. Be smart. You’re going to be asked to make decisions soon that will affect your livelihoods in serious ways.

The only bad choice will be an uninformed one.

A: It depends where you are when you write.

The Artful Writer is visited most frequently by Americans, but we do get a fairly good-sized international readership as well. There are lots of you from Canada, The Netherlands, Australia, Great Britain, New Zealand, Finland, Hong Kong…

…well, you’re pretty much from everywhere. Even Latvia.

Many of you have a similar question: if you sell a screenplay to a WGA signatory company, must you join the Guild? Embarrassingly, I’ve gotten the answer to this one wrong in a number of ways, and I’ve spread a bit of bad info in the past, so this post will hopefully set the record straight.

The determining factor when it comes to non-U.S. citizens is location.

The WGA is mostly concerned with jurisdiction, rather than prior membership or national citizenship. Regardless of what your passport says, if you perform the majority of writing services for a signatory while you are in the United States, then you must join the WGA if you’re not already a member, and the work is covered under our Minimum Basic Agreement.

However, if you live in the UK, you may work for a signatory to the WGA without the work being covered under our agreement. The WGA cannot compel you to join or compel the company to abide by the WGA’s collective bargaining agreement. However, you can negotiate to be treated as if you were under WGA jurisdiction! In other words, you can live in England, write a movie for Paramount Pictures from your home in London, and still get residuals and credit protection…but only if you get Paramount to agree to that deal.

If you hop on a jet and fly to New York, hole yourself up in a hotel and write the movie from midtown, then Paramount has to abide by the terms of the MBA.

The one final point to consider is that WGA membership isn’t really something you ever have to worry about choosing. If you meet the terms of membership through the appropriate amount of actual covered work, the WGA compels your membership. If you don’t, then you can’t join anyway.

For those of you writing outside of the United States, if you do sell or option literary material to any company that is a signatory to the WGA, try and negotiate yourself as if terms. The work won’t be officially covered by our MBA, but it’s well worth trying to get some of the goodies that those of us doing covered work get automatically. The company can certainly say “no”, but since they give those terms to thousands of other writers in the U.S. as a matter of course, you may find that they might be willing to bend a little…and give them to you too.

Ed. Note: This is a reprint of a an article published earlier this year. I’ll be back with a brand new post on January 1st or 2nd. Hope you’ve all had a nice holiday break.

Most WGA screenwriters are very aware that we do not retain copyright on our scripts. When we sell them to the companies, we do so on a work for hire basis. What that means is that we agree to provide our literary material to the company as an employee, and the company becomes the legal author of the script.

Many WGA screenwriters feel that this transfer of copyright is the source of any perceived or real weakness of our stature in Hollywood, and in fact, if we retained copyright, the “gun” would be pointing the other way, so to speak. We’d be in the driver’s seat, we’d be in creative control, our scripts wouldn’t be rewritten and mangled, and we wouldn’t be fired or ignored at will.

This is not true. In fact, not only is it not true, but if we retained copyright, we would actually be worse off.


The Way It Is Without Copyright

First, let’s lay out the realities that exist now under our current system. We sell a screenplay on a work for hire basis, and become copyrightless employees. As an employee, we are allowed to join a labor union that can collectively bargain on our behalf. As such, we have the right to minimum payment for our work, we have the right to collectively determine the proper attribution for our work (credits), and we receive residuals based on reuse as a reward for our de facto authorship. Happily, we are free to negotiate better terms for ourselves if we can, but just as importantly, no one can undercut us by selling scripts for basement prices or waiving their rights to residuals. If you sell a screenplay to a studio, you MUST do so within the MBA terms. Furthermore, as employees, we are entitled to health care and pension contributions from our employers.

Oh, and we get separated rights! You can read about those here.

The downsides of our current system? After our services are completed, the companies can hire other writers to rewrite us. They can hire directors to change the script as well. Our input is not mandatory for the film process. Also, we must tithe 1.5% of our gross income to the WGA.

Now, let’s look at what happens if we retain copyright.


What If They Let Us Keep Our Copyright?

First things first. If you write something like a spec, you own the copyright on it. If you sell it to a studio, that’s when it becomes a work for hire. Therefore, this choice I’m about to discuss isn’t completely hypothetical. You can actually do this!

I just wouldn’t recommend it.

One of the rights of the copyright holder is the right to create and control derivative works. A movie is a derivative work of a screenplay. Therefore, if you insist on owning the copyright on your screenplay, but you want a studio to produce a film from your script, you must license the right to do so to the studio. Currently, the MBA minimum for selling your original script is $100,000. Currently, the minimum for licensing the film rights to your script is…

…nothing. There is no minimum. You could license it for a dime if you wanted. Or just give the license away.

“Hold on,” you say. “I’m in the WGA! If I retain copyright, there must be some way that the WGA can still protect my rights!”

There is not. The WGA is a labor union, recognized, empowered and regulated by the United States Government. In the United States, labor unions are for employees only. A union cannot accept independent contractors and remain certified to collectively bargain for those employees.

Therefore, right away, here’s what you’re giving up when you insist on retaining your copyright and not working as an employee, but rather as an author who is licensing rights. You give up minimum payment for your work. You give up a guaranteed residual rate, and must bargain for your own royalty rate (and let’s point out…WGA writers can always negotiate better residual rates than are in the MBA, so no guaranteed minimum rate is a huge loss for copyright-retainers). You get no health care contributions and no pension contributions. That’s your problem.

“But,” you say, “at least I’m in control!”

Nope.

If the studio wants to take your screenplay and immediately go into production, they license the film rights from you. Now they are in charge of the film. They have no incentive to grant you any control over that film, and you have no moral right to it once you’ve licensed the film rights.

Of course, it’s a rare spec script that goes right into production. And what if the studio says, “You know what? We want another writer to prepare a new derivative work…a rewrite…before we consider producing this film.”

Here’s the one upside of owning copyright. You can say “no.” Of course, if the sole reward of owning copyright is that you can stop a bad film version of your script getting made, I’m not sure it’s worth losing minimums, health care and pension just for that.

Let’s be frank, though: the only way any studio would ever agree to license your material is if you did so completely. The studios will want to license the full, total and in-perpetuity rights to create new scripts, a movie, a TV series, a play, books, merchandise…EVERYTHING.

We know they would want to do this, because it’s what they do right now. Well, it’s almost what they do right now. Because we’re employees, we have the strength of a union to chip away at some of that (resulting in separated rights and residuals).

As individual copyright holders…it’s just you and your script versus a multinational corporation with a 70 billion dollar market capitalization.

My point is that as a copyright holder, you’d be subject to the same pressures the WGA employee writers are subject to, but without any of the collectively bargained guarantees and protections the employees have in place.

“Wait, wait, wait!” you say. “As the copyright holder, I do have a guarantee! The Berne Convention says that copyright confers certain moral rights that the companies can never take away by license or anything! And that’s why this is all worth it!”

Is that right?

Depends where you are.


The Realities of U.S. Copyright Law

The Berne Convention recognizes that copyright confers the following inalienable moral rights upon the copyright holder:

1. Attribution, i.e. to be properly identified as the author of the work when it is made public, and

2. Creative Integrity, i.e. no one can mutilate or distort the work in such as way as to be prejudicial to the honor or reputation of the author

“See?,” you shout. “I can license away the right to every derivative work from my screenplay, and I can even do so for no money, but no matter what those bastard companies do, they can’t deny me credit and they can’t change my freakin’ words!”

And if you just licensed those rights to a film in any country in the world except the United States, you’d be right. However, the United States Government (and this is a big one) does not recognize moral rights. Actually, they do for visual artists—painters and sculpters and the like—but NOT filmmakers or writers or software coders, etc. etc. etc.

What this means is that as the copyright holder, you can license away every last one of your rights and have NO protections left. Not even a credit protection, or a royalty protection. The companies can and will continue to mutilate and distort your work, because that’s what they do.

Do you think I’m painting too bleak a picture? Well, let’s examine the empirical realities of systems where screenwriters do retain copyright.


The English and Canadians Retain Copyright, So Why Can’t We?

There are three major differences at work in Canada and the UK, as opposed to the situation here in the U.S. First, Canada and Great Britain recognize moral rights. Secondly, and maybe even more importantly, Canada and Great Britain allow labor unions to represent independent contractors.

Thirdly, and most importantly, there is no “work made for hire” concept in Canadian or British copyright law. It’s not an option to be an author-employee.

So, with all of those differences in place, it would seem as if Canada and the U.K. would be writers’ paradises, and yet, we all know that the vast majority of screenwriting done on the planet occurs in the U.S. What gives?

Well, for starters, because the up-front fees aren’t collectively bargained, they tend to be far far lower than those guaranteed to employee-writers. Furthermore, they are often considered applicable against royalties. What that means is that if you get $10,000 for the film rights to your Canadian screenplay, you can expect the producer to reduce the royalties due to you by $10,000.

Imagine if the AMPTP suggested that the fees we earn for our scripts be deducted from our residuals! We’d be on a picket line tomorrow.

But wait. It gets worse.

Unlike our system, in which we have an infrastructure designed to continually and endlessly audit the reuse of products and then exact residuals from the companies on our behalf, the royalty system pretty much leaves the writer at the mercy of studio accountants. Here’s what one Canadian writer has to say about their system:

Producers report these earnings to the Guild on at least an annual basis. The WGC can, theoretically, request that a producer open his account books to prove statements of income, though you will understand that in practice, this is often difficult to effect. In the Canadian system, screenwriters essentially depend upon the honesty, fairness and openness of producers over the life of a project’s distribution - a period that could extend.over many, many years.

For those of you who have met some producers, it’s unlikely that “honesty, fairness and openness” will immediately leap to mind as apt descriptors.

But wait. It gets worser.

The fees for these rights are often determined unilaterally by the producers, especially when the state is the producer. A WGA writer living in the UK reports that the BBC wanted to rebroadcast some old radio shows. They were not compelled to bargain with the Writers Guild of Great Britain. Rather, they unilaterally opted to pay the writers $20,000 for the renewal of the license.

That’s not $20,000 per writer. That’s $20,000 for ALL of them to split up. About $25 per writer. Mind you, those writers owned the copyright on the scripts…but of course, owning a copyright on a script isn’t the same as owning a copyright on a derivative work.

But wait. It gets worserer.

Remember that up-front license fee in Canada? The one that gets subtracted from future royalties? How’d you like to split that with a guy who rewrites you?!?.

In Canada, the first writer “owner” often ends up “splitting” his/her script fee with any any subsequent writers that may come on board later.

You dig that? When you retain copyright, you are an “owner”, and your up-front fee isn’t a labor cost. It’s a license, and it’s divisible, and they can absolutely offer you a contract that requires you to both license away the right to prepare derivative drafts (which don’t violate your moral right to have your draft rewritten, see how clever???) AND divide that license fee with the new guy they contract with. You think people wouldn’t sign contracts like that? They do. With no “undercutting” protection that an MBA and closed shop affords, it is absolutely a race to the bottom.

Now, for those readers who hail from Canada and Great Britain, don’t get me wrong. I’m not beating you guys up for signing bad deals. The fact is that you can’t sign deals like ours because of the nature of your copyright laws. You are forced to be the owners of your work, and while being an owner can have its upside, it certainly has its downsides as well…as you can see.

The fact is that as employees represented by a labor union in the United States, we are far better off than writer/owners who retain copyright in Canada and Great Britain.


A Brief Comparison

For convenience, here’s a brief comparison.

If You Write In The U.S. On A Work Made For Hire Basis
You are guaranteed a minimum upfront fee that is not applicable against residuals.
You are guaranteed a minimum residual rate.
You are guaranteed the right to have your peers, rather than your employers, determine credits.
You are guaranteed the right to have health care and a pension if you meet the basic requirements.
You are guaranteed the protections of a federally certified labor union.
You are guaranteed separated rights if you qualify, and those rights are unwaivable.
You are guaranteed to not be undercut by any other writer working for the signatory companies.

And lastly, you are guaranteed the right to personally negotiate any term that a copyright holder might be entitled to.


If You Write In The U.S. As An Author Who Retains Copyright
You do not have any unwaivable rights.

And lastly, you are guaranteed the right to personally negotiate which terms, if any, you accept for the licensing of your copyright.


Not much of a contest, is it?

So…if retaining copyright isn’t the answer for improving our status, then what is???


Employees With “As If” Terms

There is a perfect world. In that perfect world, the writer is part of a collective bargaining unit, receives minimums and protections, but also receives the very best that copyright ownership can grant.

That philosophy has guided our negotiations stance for decades. That philosophy led to separated rights, residuals, credits determination and our fledgling reacquisition rights. The answer is not to give away all that comes with being an employee (including the ability to best protect our newest and weakest members as well as not be undercut), but to remain employees and try and enshrine more and more rights that are associated with a strong copyright licensing agreement.

Dig that?

The best way we can enshrine the equivalent of a strong copyright licensing agreement is by uniting and bargaining collectively, all the while enjoying the protections of being employees.

We don’t want copyright. We want a deal as if we had copyright. That’s my guiding light for negotiations, and that’s where the pressure comes back from the studios. It’s the smartest and best frontline for our struggle, and that’s where we should aim our firepower.

When we talk about retaining copyright, we’re not talking about empowerment. We’re talking about breaking our union and fending for ourselves. Still, the more we know about the promise that copyright holds, the better a deal we can wrest from the studios.


ERRATA: While the BBC threatened to unilaterally determine a crappy royalty rate for the reuse of the radio broadcasts, they actually could not do so lawfully because the UK writers retain copyright. Instead, the WGGB collectively bargained on their behalf and got them more like $75 per writer. This is still a low number, but it’s certainly better than $25. What’s interesting about this is that UK copyright law apparently views the recording of a radio broadcast as a performance (and so, not new intellectual property), whereas US law clearly views a recording of a radio broadcast as intellectual property, and not a performance.

I was also wrong to suggest that there are no minimums for copyright holders in the UK. Because the UK allows unions to bargain on behalf of independent contractors, they can get copyright holders minimums. In the U.S., however, there is no such protection for copyright holders.

Curiously, UK copyright law, which is far more favorable to the writer than US copyright law, has not led to a stronger economic conditions for British writers.

Novelizations
are covered…Ed. Note: This article was published earlier this year. A commenter in another thread asked a question about novelization rights, which are covered by separated rights, so I thought I’d reprint this as a refresher course for our newer readers.

It’s probably a sad commentary on my own curiosity that I’ve been hearing the phrase “separated rights” since 1995, but only really understood what they were about a year ago.

Separated rights sound kind of complicated, but once you look closely at them, you’ll see there’s nothing too difficult about it all. However, since one of our commenters who happens to be a Board Member (his last name rhymes with “Mawton”) displayed a shocking…I say shocking!…unawareness of one of the basic separated rights, I figured it was time for a brief primer. Mind you, this article is only about theatrical (i.e. movie) separated rights. The TV version will have to wait for another time.

First, let’s remind ourselves (because it’s been four whole days) that when we sell literary material or are hired to create literary material for the studios, we do so as a work made for hire.

As the de jure author of the screenplay, the studio would essentially hold all rights that come along with copyright ownership. However, writers have managed to carve out a few of those rights for themselves. They’ve separated those rights away from the large list of the rights the companies have not given up.

Before we get into what those reserved, or separated rights are, let’s first discuss who gets them.

In order to receive your separated rights in movies, you basically need to do one of the following:

1. Write an original story (treatment) or screenplay and story, and receive “story by” or “written by” credit for doing so.
2. Write a story (treatment) or screenplay based on underlying material (novels, plays, etc.), but create a substantially different story than the one contained in the underlying material, and receive “screen story” or “written by” credit for doing so.
3. Write a story (treatment) or screenplay based on underlying material that you do not have access to (e.g. an out-of-print book).

Given those rules, you can see that the most typical way a writer receives separated rights is by being a credited writer on an original. Another important point is that separated rights are assigned for story authorship, not screenplay authorship. “Screenplay by” isn’t enough to get you separated rights. You need to either receive “story by” for an original or “screen story by” for an adaptation. Since the “written by” credit includes a credit for story authorship, that also qualifies.

Now that we know what you need to do to qualify for your separated rights, let’s look at what they actually are.

1. Publication Rights: You control the right to publish the screenplay and books based on the screenplay. The studios still have the right to employ a writer to create a novelization of the screenplay, but they must offer that job to you first, and even if you decline to write the novelization, they must still pay you a minimum fee.

2. Dramatic Stage Rights: This is the one Mr. “Mawton” forgot about. After the release of the film, the company has two years in which to produce a stage version of the screenplay. If they fail to do so, the writer now controls the right to produce a stage version.

3. Sequel Payments & Credit: If the company produces a sequel to the screenplay (for theatrical or television), the writers with separated rights receive WGA minimums for those sequels. In addition, the writers get a “Based on Characters Created By” credit for theatrical sequels.

4. Mandatory Rewrite: This one’s sort of a cool one. If you sell or option a spec, you must be offered the first rewrite. What’s interesting is that this separated right is obtained prior to the awarding of credit. Obviously, it ceases to be relevant once the first rewrite is complete.

5. Meeting With A Production Executive: Works on the same basis as #4. If you sell or option a spec and then do your rewrite, the company must let you meet with an executive before they fire you. This is the “right to grovel for your job,” so let’s move quickly past it to…

6. Reacquisition: I just wrote an article about reacquisition here, so follow the link for the full skinny on this separated right.

So, now you know. Go impress a lawyer. But more importantly, when you begin a new assignment or take a new job, ask yourself whether or not you’re going to receive separated rights. True, published screenplays aren’t exactly bestsellers, and it’s rare for films to be made into stage plays. Nontheless, it happens (see this new play for instance). What’s more, those sequel payments can come in very handy.

Ed. Note: This article was originally a post I wrote on WriterAction. I subsequently revised and published it here in January of 2005.

So, the theoretical question has arisen: how is it ever possible that a group of writers could write scripts connected by a single chain of title, and yet some of those writers would not be considered participating writers by the WGA in an arbitration?

Here’s my explanation, informed by my reading of the MBA, but no less informed by a discussion I had with Ted Elliott, who crystalized the “as if” theory (more on that later).

Participation Isn’t Defined by Employment, But By Contribution of Intellectual Property

First, some definitions. Per Schedule A, Paragraph 9 of the MBA:

A writer who has particpated in the writing of a screenplay, or a writer who has been employed by the Company on the story and/or screenplay, or who has sold or licensed literary material subject to this Basic Agreement, shall, for the purpose of this Basic Agreement, be considered a participant.

Pretty simple. If you participate in the writing of a screenplay, either as an employee, spec seller or just some dude who wrote stuff, you’re a participating writer (by the way, if we eliminated “A writer who has participated in the writing of a screenplay, or”, we’d have ourselves Writing Credits For Writers Only, but that’s a whole ‘nother discussion).

Next definition…what does copyright protect in regards to written works of art? The U.S. Copyright office says:

Copyright will protect the literary or dramatic expression of an author’s idea but not the idea itself.

So, first thing’s first. Let’s say I have an idea for a movie. “A high school outcast learns about life and love from a martial arts teacher.” The first question is…can I copyright that idea as it pops out of my head? No. It needs to be expressed in a fixed form. Okay. I write it down. I now own the copyright on that fixed form, i.e. that piece of paper with those words on it and any mechanical reproduction (xerox) of that fixed form (piece of paper with words on it). Does that mean no one else can use that idea? No. I could only own the copyright on the literary expression of the idea (which I haven’t written yet), but not on the idea itself.

A treatment or script is considered a literary expression of an idea. A logline MIGHT be a literary expression of an idea if it is specific enough. A premise, however, generally doesn’t pass the test of copyrightable.

Yes, this means you are absolutely free to write a movie with the same damn idea as The Karate Kid. You just can’t steal the specific manner in which that idea was expressed in a fixed form, because the literary expression is protected.

Okay. So…let’s imagine a world without studios. Yes, I can actually hear some of you sighing with joy.

In the world without studios, writers come up with an idea (which is not copyrightable), and then they write a script (which is copyrightable because it’s a literary expression of the author’s idea). Now let’s say that Harry has the idea about the kid who learns karate. Harry writes the script, and now he owns the copyright on the script…but he decides in all honesty that his writer friend Joe could really improve the script if he let him contribute to it. He offers, as the copyright holder, to authorize Joe to revise the work.

Joe agrees, but he makes a reasonable request of Harry. “Let’s say I contribute a lot to the final version. My unique literary expression (exluding elements borrowed from you) is copyrightable too, even though it’s derived from your initial literary expression. How will we determine authorship, or credit, for the final script?”

No problem! There’s a Scribes Union of writers who agree to submit to binding arbitration in cases like these. The SU says, “We analyze the drafts and then decide what a fair credit should be based on your individual, copyrightable contributions to the final script, paying careful attention to chronology as well as reuse of elements, etc.”

And so it goes. Joe rewrites you, the two of you submit to a binding arbitration as participating writers on the script, and you’re happy.

Ah, but there’s a wrinkle. Some dude named Fred says, “Hey! I wrote a different script based on the same idea of a high school outcast who learns about life and love from a Karate master! I should be a participating writer too, even though I don’t know these other guys.”

The SU arbiters read his script and respond as such: “Fred, we believe the only thing similar between your script and Harry/Joe’s is the idea. Since idea is not copyrightable, and written literary material is copyrightable, we believe you didn’t contribute any written literary material, so we don’t believe you meet the standard of participant in Harry & Joe’s script. That’s the bad news. The good news is that, in turn, they aren’t participating writers in your script either. You are free to exploit it without worrying about them asking for a piece of the profits, just as they are free to exploit their script without sharing profits with you.”

And that seems reasonable, right?

Now let’s re-enter our world. Yes, Virginia, there really is a studio.

Without getting into the why of it all, when a screenwriter sells a script to a studio, he is also transferring the ownership of copyright. The legal author of every script that Paramount owns is, in fact, Paramount Pictures.

But wait. It’s not The Godfather, written by Paramount. If writers aren’t the legal author, why do they get credit?

We get credit because we bargained for it, and we get to determine which participating writers get credit, because we bargained for that. Still, we’re in the weird place of assigning credit to writers who hold no copyright claims! So how do we do that?

We do it as if the participants all DO hold copyright claims. The WGA, much like my hypothetical Scribes Union, determines screen credit on the basis of copyrightable contributions (unique literary expressions in fixed form, yadda yadda).

This is important for the same reason it was important back at the Scribes Union. Here in reality, years after Karate Kid was made, a movie was released called “Showdown.” Showdown was about a high school outcast who lusted after a girl whose violent boyfriend was a karate master. Only by learning karate from a mysterious school janitor could he face off against the boyfriend and win the girl. The guy who wrote Showdown did not violate the copyright of Karate Kid because he only used the same idea, but created a unique literary expression of that idea called “Showdown,” and apparently did so demonstrably enough to avoid being sued for plagiary of dialogue, specific characterizations, narrative, etc.

Ooh, big deal, we protected the Showdown guy, right? Ahh, but by saying that Showdown is a unique work distinct from Karate Kid, we’re also protecting Karate Kid. Should they ever want to remake Karate Kid (and honestly, we can’t be more than five years away from that), they’re not going to have to deal with a lawsuit from the writer of Showdown.

Okay. So…finally we get to the sticky problems caused by the chain of title. If you’ve read this far, I promise you…we’re almost there.

Studio A buys Harry’s original script. They now own the copyright. They hire Joe to rewrite it. Then they decide that they really hate this thing, but Studio B is willing to buy it (ownership of copyright) out of turnaround, keeping the same producer along for the ride. The producer and Studio B sends the script to Fred, in the hopes that he can improve it.

Fred comes to them and says, “Guys, I read the script. I read it fifty times. I’ve memorized it. And I hate it. The only thing I like is the idea, but I have a completely unique literary expression I’d like to put in fixed form based on this idea (Fred is such a fucking geek). My unique literary expression has absolutely nothing in common with the copyrightable elements of the prior scripts. It may, however, have uncopyrightable things in common…i.e. not-unique literary expressions like ideas. For instance, I love this notion of a high school outcast who learns about life and love from a karate master. But that’s it. Everything from here on out will be unique and original to me.”

Fred is hired by Studio B AND by the same producer who was attached to Harry and Joe’s script, and he goes off and writes. The script gets the green light, and they shoot KungFu High!

When it comes time for arbitration on KungFu High!, Studio B follows the chain of title when determining how to list partcipating writers. They list Harry, Joe and Fred.

But Fred calls the Guild and says, “Wait a second. We determine credits as if we were the copyright owners of our unique literary expressions in fixed forms, which is why KungFu High can’t, say, be ‘written by Studio B.’ But that means the chain of title is totally irrelevant, because chain of title only reflects studio ownership of copyright, not the in-truth authorship of the scripts that this Guild is trying to determine. All that matters is whether or not the material I wrote can possibly be considered a work derived from another copyrighted literary expression. And I’m saying…it’s not. I’m saying KungFu High is totally unique to me with the exception of the uncopyrightable IDEA…and so Harry and Joe aren’t participants in the writing of it.”

And Fred then realizes something else. “You know what? I could have read Harry and Joe’s script, and THEN written my exact same script for Studio X, which has ZERO chain of title going back to Harry and Joe! And neither Studio A nor B nor Harry nor Joe could have sued me, because I didn’t take anything copyrightable from them. That means they contributed nothing copyrightable to my screenplay, which means they are no more participants in it than anyone else you’ll meet on the street.”

And Fred turns to Harry and Joe and says, “By the way, this also means that I’m not a participant in your script, which means that if Studio B chooses to exploit your version, I won’t be able to seek credit on that movie.”

The Guild now has a decision to make.

Is Fred right? Does his script contain zero copyrightable literary material taken from Harry and Joe’s script? The fact that he read their script is irrelevant, just as it’s irrelevant that the writer of Showdown most likely watched Karate Kid on cable. Regardless of the chain of title, do the two incarnations of the project (a term of economic, rather than creative, distinction) share anything in common other than the uncopyrightable idea?

The Guild will read the scripts and make that decision. However, there IS a decision to be made. Unity of the chain of title doesn’t necessarily preclude a complete division of copyright.

PS: Suddenly, the fact that the studio/writers of “Vice Versa” didn’t get sued by the studio/writers of “Freaky Friday” starts to make sense, right? :)

Why are we the only ones in the movie business who get hired and fired like migrant workers? Why are we writers the only ones in the movie business who create story and are then ignored or belittled? Why are we the only ones who get overlooked when it comes to press and marketing? Why are we the only ones forced to implement ridiculous notes? Why are we the only ones who literally save movies from being complete disasters, only to be overlooked and forgotten and uncredited?

Why, oh lord…whyyyyyyyy?

Hey, we’re not the only ones.

For a long time, I’ve said that actors get attention because they’re pretty and fascinating (undeniable) and directors in film retain enormous power because the economics of the movie business make them the most important individual in the chain of production (arguable, but I think I’m right).

This means that writers get the short end of the stick not because the world has it out for us, but because the business’ default position is to not care about anyone unless there’s good cause, i.e. a clear connection to profit or protection of investment.

In the sense that the dismissal of writers isn’t particularly intentional, but is instead more a function of a general callousness, it has to be pointed out that we’re not special. I know this may come as a disappointment to those who have invested a large amount of personal energy in the “persecution” model of screenwriting, but it’s true nonetheless.

I know this because I see it happening to others. Actually, I see it happening even more egregiously to others.

Take the case of the film editor.

When you watch a film editor work, it becomes immediately clear that they are story tellers. They’re telling a story in a very different way than we writers do, but they’re doing it nonetheless. As fate would have it, they are not beholden to the script. They are beholden, instead, to whatever film it is that the director (to a lesser extent) and the company (to a greater extent) desires.

Given that they are not beholden to the script, their creative freedom in telling the story is enormous. With mere frames, they can change a character from bold to shy, from hero to goat, from predator to prey. They can rewrite the entire narrative of the movie (yes…rewrite…what else to call it?). And yet, they are overlooked, ignored, unattended to, hired and fired with abandon, occasionally stacked three or four at a time, re-edited and re-edited again, and constantly under the barrage of notes from people who do not understand the limitations and requirements of their craft.

Sound familiar?

Of course, they tend to get paid less as well.

As we head towards the end of the year, here’s a toast to all of the put-upon, ignored, toiling away in the dungeon storytellers in this town. No one knows we’re here, no one cares we’re here, no one will miss us when we’re gone…

…but if we really needed all that validation, we would have taken acting classes, right?

Back in my screed about why it’s better that we don’t retain copyright, I made the point that labor unions in the U.S. can only represent employees. That’s why novelists, for instance, can’t be unionized. They retain copyright. As such, they’re independent contractors.

Recently, a fellow writer challenged this with a very interesting question. “If the WGA can only cover employees, then how can it cover options?”

Why is that a good question? Well, when a producer options a script, he does not purchase it. The writer still retains copyright. The producer is merely paying the writer to not sell it to anyone else for a specific amount of time. The producer has the option of then purchasing the material at a later date.

Yet, the WGA does cover options, meaning that it has a basic set of minimum terms in place and it collects dues on the options and represents writers in grievances if the option terms are violated. But if the optioner hasn’t yet been employed, then how can the WGA cover her?

Let’s wind back to get to the bottom of this.

When the WGA was founded, screenwriters worked in the studio system. They were employees in the truest sense of the word. As the studio system crumbled, the existence of the spec market was born.

Spec writers can either sell their scripts to a company, or they can option their scripts to a company.

This new development posed something of a problem to both the WGA and the companies.

The companies have always wanted the copyright in the screenplays they develop for reasons I’ve stated before: they exist to exploit intellectual property, and the most efficient way to exploit intellectual property is to own the copyright.

The union has always wanted screenwriters to have the benefits of collective bargaining (like residuals, P&H, credit protection, and minimums), because if one segment of screenwriters don’t receive those benefits, all screenwriters suffer.

Over the course of the years following the collapse of the studio system, the WGA successfully negotiated to cover options and spec sales. Given that spec writers and optioners weren’t working as traditional employees (having been assigned material, for instance), how did the WGA achieve this?

Let’s take the case of the spec script first. When you sell a spec script, the companies routinely (meaning, 100% of the time) require the sellers to engage in a legal maneuver. That maneuver states that even though you wrote the script on spec without any promise of employment, the purchasing company actually “commissioned” you to write it, and it’s really a work-for-hire.

In other words, when you sell a spec, you lose your copyright. In return for losing your copyright (and becoming an employee as it’s legally understood), you gain the benefits of WGA coverage, including the MBA and its collectively bargained terms.

So far, so good. Sell a spec…you’re still an employee, and the WGA covers you by default.

But what about options? The whole point of an option is that you haven’t sold the script.

Here’s what the WGA and the companies did. They agreed that, per the MBA, a writer who options material to a signatory is an employee.

Let me repeat that again, because it’s the essence of the solution. If you option material to a signatory, you’re an employee because you’ve met the MBA definition of employee, even if you don’t meet the traditional definition of employee.

Just like that.

Okay, fair enough, but doesn’t that open the door, then, to the WGA doing precisely what I’ve said along that it can’t do? Can’t we just define novelists as employees, even though they retain copyright just like the script optioners?

No.

The companies have only agreed to let us define an option as employment if and only if the optioned screenplay has not been exploited. Remember, if you own the copyright on something and you exploit it, you can never engage in the legal “maneuver” that says it was really a work-for-hire. The toothpaste is out of the tube. Warner Brothers can’t pay Stephen King any amount of money to claim that Salem’s Lot is now, in fact, a work-for-hire. Hell, we couldn’t even get novelists into our union if the companies did agree, because our new novelist-friendly MBA definition of employee would be in total and stark conflict with labor and copyright law.

Therefore, the WGA and the companies allow an option of an unexploited screenplay to be covered because the intended fate for the optioned material is that it be sold to a signatory…and when it gets sold, it will be sold as a commissioned work-for-hire…which is possible only because it hasn’t been exploited.

Hence, the title of this piece. When you option a screenplay to an employer, you are not an employee (you retain copyright) and you are an employee (a collective bargaining agreement has defined your transaction as that of an employee).

Let me conclude all this wonkiness with a point that you might actually find relevant. We will never improve the terms and conditions of our employment if we do not understand them. I’ve been working for a decade in this business, and I didn’t understand the distinctions I’ve written about today until, oh, yesterday. I don’t know how many writers I can evangelize as fellow wonks, but I hope the numbers increase. If we don’t learn the rules of the game, we will always be at the mercy of others who do.

That’s why I’m learning.