As the news blackout lifts, the gloves come off

The town should have plenty to talk about by the time the WGA-AMPTP talks resume Tuesday.

The PR war over the WGA-AMPTP negotiations has amped up; the AMPTP’s latest move on Friday afternoon was to release a letter to its members along with a review of the current state of its proposal to the WGA. Here’s the letter; the “AMPTP Fact Sheet” is after the jump.

— Dave McNary

To the Companies represented by the AMPTP:

On behalf of all of our member companies, the AMPTP has proposed a New Economic Partnership to the WGA. This New Partnership includes bold moves by the AMPTP in several areas of new media, including streaming, content made for new media and programming delivered over digital broadcast channels. The New Economic Partnership is summarized in the attached one-page document.

The New Economic Partnership will deliver more than $130 million in additional compensation above and beyond the more than $1.3 billion working writers already receive each year.  This could mean an increase up to $31,000 over the 3-year life of the contract for working writers which would be on top of the current average writer’s compensation of more than $200,000 a year.   With these improvements, writers remain among the highest paid employees in America.  This more than $130 million increase is believed to be one of the largest compensation increases of any major union contract negotiated in recent American history.

In addition, our proposed New Economic Partnership included increases in producer contributions to the WGA health and pension plans. This increase helps assure that writers will continue to enjoy the security of these well funded plans, which offer an array of benefits to participants that are among the most generous of any in the nation.

During our negotiations on Thursday, November 29th, the WGA asked for a halt in talks until Tuesday, December 4th to give the WGA time to study our New Economic Partnership. While we strongly preferred to continue discussions without any interruption, we also understood the WGA’s need to take the time necessary to process our groundbreaking New Economic Partnership.  We therefore were disappointed to see such a quick and decisive attack on the plan that they had asked for so much time to study.   We look forward to resuming talks on December 4th.

Between now and Tuesday, we hope that the discussion about our proposed New Economic Partnership will focus on the facts. For example, the allegation that the New Economic Partnership and its groundbreaking proposals to extend and increase payments and jurisdiction for the writers in three wholly new areas of new media is somehow a “rollback” does nothing to advance a substantive dialogue over these issues, especially given that the WGA asserted for weeks that we were unwilling to share in new media revenues (despite, for example, our ongoing payments for digital downloading).

Simply put, a proposal that increases working writers compensation by a total of $130 million is in fact a very big “roll” forward.

We remain confident that there is common ground to be found between the two sides. Our proposal for a New Economic Partnership is meant to help find that common ground, and we hope that the WGA’s leadership will thoughtfully consider both our Partnership proposal and the increasingly severe economic impacts of this strike before the WGA comes back from the bargaining hiatus that it requested and gets down to work again on December 4th. We believe to generate the necessary momentum to reach a deal, we must be at the table talking.

As we await the WGA’s return to talks next week, we must all keep in mind the basic principle that is guiding our companies through this difficult process: We have a fundamental obligation to our employees and shareholders to create a modern economic system for our industry that will allow us to prosper in the face of increasingly difficult and fast-changing competition. Other industries have tried to take the easy way out by pretending that the fundamental changes around them were not really occurring, and as a result many businesses have declined at great cost to their workers, investors and communities. We are determined to deal successfully with the revolutionary global and technological changes confronting our industry before it is too late. That is why we are so committed to a fair deal for all parties, one that gives everyone a share in the profits of success and allows our business to change and grow.

Sincerely,

The Leadership of the AMPTP

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  1. ed says:

    Unfortunately, you can’t make any real conclustions about cost and revenue regarding the online episodes. Given the relatively small download rate, Tropicana may not have paid much at all, so you can’t “guarantee” that. Just like with broadcast television, the number of eyes generally dictate the cost. Plus the infrastructure required to provide streaming video — web site development, massive servers, and data bandwidth costs — all constitute large up-front and ongoing costs. The iTunes store was not profitable for a couple of years until music sales were large enough. No word yet as to whether the video sales have seen any net profit. NBC obviously didn’t feel they were getting much value from it, causing them pull out. (Granted, there likely were other issues involved beyond price.)
    That’s mostly the problem here. The studios are not yet seeing any significant revenues from online distribution, mostly using it as promotional material at this point. But both the studios and the writers see the future, to some extent, as being online. The writers want a piece of the action *now* where money doesn’t really exist, but they also don’t want to get burned like they feel they were with home video sales percentages back before those sales took off.
    And, yes, I would concur that writers should be seeing a percentage simply because that is the way the studios have created the payment structure. Going way back, they started the notion of paying writers (and actors) less up front to keep costs down and pay residuals as a form of profit sharing. The studios either need to pony up more money up front and take a bigger cost risk, or deal with the hassle of residuals. But both sides need to determine a fair balance about what a promotional piece would be.

  2. Greg says:

    Doug–first the writers make too much money, now they make too little money. You can’t have it both ways. Make up your mind.
    And what does the money have to do with the negotations? The writers either deserve a small percentage of revenue when their product is streamed online, or they don’t. Networks are already making a *sizeable* amount putting episodes on their websites (one episode of “Pushing Daisies” at abc.com has commercials exclusively from Tropicana–I guarantee you that didn’t come cheap. And that’s *one* episode. Every episode ABC has posted has advertising you’re required to watch, and for destination shows like Desperate Housewives or Lost (or “The Office,”) it seems very likely the network’s turning a profit; seems to me it’s perfectly reasonable for a writer to make a small percentage. Do you disagree?

  3. Marc Guggenheim says:

    The news blackout wasn’t “lifted” — it was unilaterally broken by the AMPTP when they issued this statement. Sadly, this is not the first time the AMPTP has done so during these negotiations.

  4. C. A. Bridges says:

    That’s why I also quoted the median for working writers, and supplied a link to the WGA’s own records. I’m providing a lot more information than the AMPTP is, which is relying solely on people believing their inflated “average” amount.
    So far the writers have been very open about what they want, with no fancy names for their proposals or cooked-book figures that have no backing. They’ve explained what they want, why, and how much it will cost. Compare that to the AMPTP’s vague “partnership” offer with fancy buzzwords and undefined profits.
    You know, now that I think about it, I think the writers should go ahead and drop their requests for more money and simply demand that all shows and movies receive independent audits with the results open to everyone due a percentage. I suspect that the money paid out to writers (and actors, and directors, and investors) if the actual figures were made public would cover whatever losses they suffered from this inane deal.

  5. Doug says:

    How is quoting a $5,000 MEDIAN income figure not as equally deceptive?
    If $5k is the median, that means at least half of WGA aren’t even real “writers” that did writing as their real profession during a given year – they’re just “aspiring” or unemployed former writers that still happen to possess WGA cards.
    If you can’t make a least $5k a year writing, then you shouldn’t be able to call it your profession for that year — your occupation is whatever you did as your primary job that year. It might make you feel good to put “writer” in the “occupation” line of your annual tax return, but that doesn’t mean it’s not deceptive.
    *Every* professional’s median income would fall through the floor if you counted everyone that was interested in working in the industry rather than just the people that worked FULL-TIME in the industry during any given year.

  6. Stephen Falk says:

    After reading the word “Partnership” in that press release 11 times, I feel so much better now! We’re PARTNERS. I didn’t know they felt that way. We really ARE all in this together. Let’s stop fighting and accept what I now understand to be so clearly a fair and balanced partnership… I mean contract.

  7. Ivy says:

    the point of the median is to show what the majority of people in that profession make a year. i doubt many, if any, lawyers or doctors earn $5k a year.
    with the majority of people believing the AMPTP are doing the wrong thing by the writers, actors, directors, and well.. everyone involved in the industry (and how could we not when you see network CEO’s getting laid off and given severence packages bigger than the asked for raise by the WGA?) you would think they would learn not to release statements that smell entirely of misrepresentation of facts and PR spin.

  8. C. A. Bridges says:

    The supply of just about any profession exceed demands (except Army translators). But you also have to take into account how writers are paid. A simplistic description would be that writers on a show get a salary, and in most shows all the writers help “break” or plot out the basic story. One writer is then assigned to actually write the script for that show, and the other writers go on with the next episodes. A writer might get a writing credit once or twice a season, and it is that episode he’ll get residuals for.
    Residuals aren’t bonuses or extra money, they’re deferred payments promised at the beginning of the job so that studios can afford to buy scripts when many of them won’t earn a lot. Writers get paid less upfront but earn residuals on episodes that get rerun a lot. The residuals are the second half of the payment for the script.
    This plan drops those residuals down to one flat, tiny payment per episode. The AMPTP’s suggestion that this means an “extra” $130 million utterly ignores the fact that writers are seeing their other residuals dry up because reruns are put online now. When someone takes away half your paycheck but hands you ten bucks, oddly enough you might not be grateful for the ten bucks, no matter what fancy name they give it.

  9. curious says:

    Excellent info, thanks! So the employed WGA scriptwriter median in 2005 was $106K or the LA Times figures the Hollywood TV screenwriter median at $94K and film at $90K(men)/$50K(women) (Why the major gender difference in film? To few women for an accurate sampling?)
    So, for a total membership medain of $5,000, I’m guessing a lot of writers are involved in other jobs while maintaining guild membership (similar to my situation), or are trying to break in. With such a disparity, is the supply of writers far exceeding demand?

  10. Bill says:

    Yeah, It would be helpful for all to know what the median income is for writers too. Why did he avoid that in his posting? Makes no sense to dispute the AMPTP suggestion if you aren’t going to reveal the truth.
    Suspicious.

  11. C. A. Bridges says:

    The median income for all WGA members? About $5,000/yr, according to the WGA, since a fair number of its members don’t get jobs every year.
    Of those writers who do make some money, one quarter earn less than $37,700 a year. According to the U.S. Bureau of Labor Statistics, the median annual salary of working scriptwriters is $44,350 — a more important and revealing figure than the media’s frequent statement that the average Hollywood writer makes $200,000. (The median yearly income of all WGA writers, including those unemployed, is closer to $5,000 a year.)
    The Guild itself provides writers’ earning figures (http://www.wga.org/uploadedFiles/who_we_are/annual_reports/market06.pdf), and the L.A. Times ran a sidebar (http://www.latimes.com/media/acrobat/2007-11/33660605.pdf) that shows their income in context with production costs and other earners.
    According to the AMPTP, if Bill Gates stepped inside my house my family’s average income would suddenly be in the millions. Oddly enough, I don’t think that would help me with my bills much.

  12. curious says:

    An average is still a very useful metric. It does accurately reflect how much money is being paid to writers overall and can be used for comparison to most any other jobs in the US. Certainly the same argument can me made to doctors, engineers, baseball players, CEOs, actors, etc. There are highly paid superstars on one end and low paid individuals on the other end who may be paid little because they choose part-time work, semi-retired, going to school, as a hobby, or any number of reasons. I, for one, am a member of a guild but have a better paying job in another field, so my efforts within my union are more on the hobby side. Thus my salary is very low from the perspective of working in the union. I thus skew the average and median incomes when calculating the salaries of members of my union. I think many writers face the dilema of working other jobs out of necessity but their total take home pay is higher than the figure reported for their work solely as a writer. Teachers, likewise, may work summer jobs to augment income. So, the median income metric is not necessarily a better indicator, but both can be useful.
    Since you bring it up, would mind sharing what the median income for writers is since it evidently is so far removed from the average?

  13. b!X says:

    There they go again.
    First, they try the long-tired tactic of quoting the AVERAGE writers income rather than the far more important MEDIAN. If you took a pool of ten people, and nine of them made $10,000 a year and one of them made $300,000 a year, their “average” salary would be $39,000 a year. But simply quoting the average would be completely devoid of useful information because it hides the fact that the vast majority of that pool of ten people make far, far less than that.
    The fact that the AMPTP persists on using the useless “average” number only demonstrates that they’re PR campaign willingly makes use of clear misinformation, which is why anyone taking this strike seriously keeps a pound of salt nearby whenever they read something from the AMPTP.
    Second, the reason the WGA is referring to the proposal as a “rollback” is simple, but it requires ignoring the specific forms of media and just thinking of “residuals for re-use”.
    Currently, the main medium for re-use (broadcast) results in residuals from re-runs ranging from $3,000 to $20,000.
    With the industry increasingly moving towards re-use/re-run occurring via streaming or downloads, the AMPTP proposal means that the main medium for re-use in the future will result in residuals from re-runs fixed at $250.
    That’s why it’s being termed a rollback. Under this proposal, if the main medium for re-use switched tomorrow from broadcast to streaming/download, writers would be taking a residual cut from the $3,000-20,000 range to a flat $250.
    It’s not difficult to follow. But the AMPTP is counting on the premise that people won’t even bother to try.

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