The fighting between showbiz writers and their employers has already amped up to the acrimonious stage.
Producers unexpectedly pulled their proposal for a three-year study off the table Wednesday — meaning the companies’ remaining take-it or leave-it proposal amounts to a revolutionary revamp of residuals with payments coming only when costs are recouped.
WGA leaders took an assertive tack of their own on Wednesday, insisting that a residuals revamp is out of the question since companies can’t be trusted to tell the truth about production costs.
Two members of the Guild negotiating committee accused studios and networks of practicing fuzzy math on net profit participants on hit TV shows such as “The Simpsons” and successful features such as “Chicago.”
Alliance of Motion Picture and Television Producers prexy Nick Counter blasted Guild leaders for passing up the study option, which would have retained the current residuals system during the three years.
“While we believe the WGA’s rejection of a study is short-sighted and self-destructive, we did give them that option,” he said. “The study would not only give us valuable insight into the new world and its impact on traditional media, but also would give us insight on how to deal with the challenges and opportunities, while continuing to compensate writers under the current provisions and side-letters to their 2004 contract.”
Counter added a sarcastic swipe at the WGA’s assertions that it has a better understanding of the issue than the companies. “The Guild negotiators rejected the study as unnecessary because they have all the answers on New Media — its viability as a business, consumer demand, even advertiser acceptance,” he said.
WGA leaders described the study as a stall tactic and said they prefer to keep the current residuals system since companies find ways to never pay writers in net profit deals — no matter how well the TV shows or movies do.
“The idea that we could agree on what production costs are is absurd,” said WGA negotiating committee chief John Bowman at a news conference at the Guild’s Hollywood headquarters. “It’s impossible to get a handle on (it). Our history has not been very good with profit-based participation.”
Bowman said he’s seen recent statements from “Simpsons” net profit participants showing the series is $45 million in the red. And negotiating committee member Bill Condon, who penned “Chicago” screenplay and is a profit participant, said he’s been told the feature still has a $70 million deficit.
The companies’ move to pull the study off the table came after both sides officially rejected each others’ proposals Wednesday. Talks recessed with no new negotiations set, although bargaining could resume as early as next week.
Bowman also described the study proposal — which would maintain the current residuals system in order to figure out how to pay writers for work that’s shown digital platforms — as a stall tactic.
“We’re saying the future is now,” he added. “Let’s negotiate these rates right now.”
Wednesday’s PR battle also featured attempts by both sides to portray themselves as reasonable and parry attacks from the other side.
Counter said in his statement, “We are committed to negotiating a deal that is fair to everyone, one that respects the needs and concerns of the WGA as well as all the AMPTP member companies, one that maintains industry stability, one that gives us the flexibility to adapt to the revolutionary changes that confront us, one that helps us manage our risks, grow our businesses and share our rewards.”
For his part, Bowman said the Guild had called the news conference partly to defuse the perception of the WGA negotiators as “bellicose.”
Both sides continued to argue over the economics of showbiz, with the WGA again accusing the companies of duplicity — telling Wall Street that operations are healthy and then claiming at the negotiating table that they’re beset by uncertainty. During the news conference, assistant exec director Charles Slocum offered a recent NBC presentation that showed an 11% hike in revenues from “Heroes” to $940 million — thanks to diversification of sources such as cable, sell-through, DVDs, online streaming and wireless.
Negotiating team member Larry Wilmore said at the news conference that the WGA’s trying to avoid repeating its mistake of 22 years ago when it agreed to a discounted homevideo formula since the technology hadn’t been proven.
“Writers are still waiting for a fair deal,” he added. “All we’re saying is that if you get paid, we should get paid.”
The WGA negotiations launched acrimoniously on Monday following months of rancor, then recessed for a day. The current guild contract expires on Oct. 31.
AMPTP veep Carol Lombardini, in an introductory statement at Wednesday’s session, insisted that the producers don’t blame the writers for the current problems of the industry.
“The source of our difficulties lies with the rapid technological and commercial changes that have been and are occurring within this industry,” she said. “We as an industry feel compelled to respond to the competition that grows around us everyday, to manage our businesses in a prudent and responsible way, and to do everything in our power to continue the operation of our businesses and to support the livelihoods of tens of thousands of people.”
Lombardini said the companies are responding to a changing business climate in which feature and TV production have become “an increasingly risky business.” She noted that studios no longer recover their costs at the box office and instead must rely on homevideo, pay and free television, or some combination thereof, to recover costs.
“And how much longer can we even rely on those so-called ancillary markets to generate revenue?” Lombardini asked. “How long will it be before piracy overtakes the legitimate purveyors of our product? Measured against that backdrop, it is no surprise that we decline to add to the red ink on our ledgers by increasing our residual costs when we cannot be certain that we will ever recover our production and distribution costs.”
She also said the TV situation is no better, adding, “How long will television continue to be an ad-supported medium? What will be the results of the introduction of a new ratings system, one that measures not how many people are watching the show but how many people are watching the commercial? How will we deliver our product to people who don’t want to watch it on a given channel at a given time on a television screen?”