WGA strike: A failure to communicate

The significant progress made in the DGA’s tentative contract agreement with the majors stands as a Wgarally1120 hopeful sign that labor peace may soon be at hand. And it’s also provides perfect examples of what’s gone wrong to date in the fitful negotiations between the Alliance of Motion Picture and Television Producers and the WGA. The lack of communication between the studios and the scribes has been devastating to the creative community, below-the-liners included, and a failure of leadership on both sides of the picket lines.

The DGA rightfully touted on Thursday its victory in achieving big gains in residuals for electronic sell-through (aka paid downloads) based on a percentage of distributor’s gross, not the despised producer’s gross homevideo formula that took 80% of the distributor’s revenue off the table, leaving 20% for the scribes and helmers to take a slim percentage of (1.5% or 1.8%, for sales after $1 million) as a residual. It’s understood that the AMPTP wanted to base the deal on some definition “producer’s gross” in the deal but the DGA held firm, on the rationale that it’s too easy for the majors to move money around to make the producer’s gross a lot punier than the distributor’s haul.

The WGA pushed hard in its approach to the studios for a distributor’s gross formula, but it was a non-starter, the AMPTP reps repeatedly told the WGA. How come? Because, according to execs from the AMPTP member congloms, they quite weren’t sure what the WGA meant by the D- and G-words. AMPTP reps raised the specter of the WGA demanding a cut of advertising revenue from new media exhibition platforms (ABC.com, NBC.com, etc.) if they were owned by the same company that distribbed the program to the Internet (as is more often than not the case in post fin-syn Hollywood).

So why didn’t the companies just ask for clarity? Why didn’t they demand a simple, declarative sentence, a la the DGA’s snappy “Distributor’s gross is the amount received by the entity responsible for distributing the film or television program on the Internet.” AMPTP says they did; WGA says it was the majors who refused to define their understanding of distributor’s versus producer’s gross. I can’t imagine a first grade teacher accepting such a “did too/did not” explanation for why the entire class flunked the math test.

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  1. I happened to examine your report and identified that your web site is so fantasic I have actually witnessed. Continue to keep in your superior work.

  2. Mike says:

    This is pretty much the best and most even-handed piece about the strike I’ve seen. Thanks for posting it.
    As for Lackland’s comment above, “The problem with Ms. Littleton’s analysis is that it puts too human and even too humane a face on negotiations over many billions in revenue,” I don’t agree. I mean, I agree in theory but the weird thing about Hollywood is that even in these huge negotiations about big numbers, relationships and trust matter. But it’s actually not that weird– the same thing is true about politics, clearly. And, according to the corporate lawyers I know, other businesses as well.

  3. Lackland says:

    The problem with Ms. Littleton’s analysis is that it puts too human and even too humane a face on negotiations over many billions in revenue. We spend a great deal of time in law school and business school learning to put aside our emotions and think strategically. If in ’88 the Guild split after five months and if the DGA has historically sold soft deals to the rest of the industry, that’s where you start: you plan on forcing a long strike on your adversary and on turning to the DGA to help apply the wedge. The AMPTP is still spinning the same wedge-argument line now that they’ve pushed since the start: that the WGA leadership is irrational and not to be trusted; that the WGA membership should instead look to the DGA leadership for guidance. Unless there was a fundamental failure of business judgment within the companies, in which many or all of the CEO’s decided to indulge their personal emotions at the expense of a rational bargaining strategy, the strike to date – and it isn’t over – wasn’t caused by a failure to communicate. It was caused by cold-blooded calculations on the relative costs and benefits of sustaining a strike and of deliberately not communicating to pressure the WGA. As an aside, the DGA deal on streaming was made at the expense of its TV directors in comparison to its feature directors and below-the-line ADs. That sacrificed the interests of perhaps 20% of its membership. But the same pattern at the WGA will directly injure half or more of its membership and so will likely prove a very hard sell.

  4. MrsWakely says:

    New York Times: 1-19-08
    Bob Herbert:
    “The distribution of wages, income and wealth in the United States has become vastly more unequal over the last 30 years. In fact, this country has a more unequal distribution of income than any other advanced country.”
    New York Times: 1-19-08
    Writer’s Strike Tests Mettle of Two Outsiders:
    “The directors decided that this was not the time to make a stand on new media, agreeing to revisit compensation for their distribution of their work over the Internet, cellphones and other digital media three years from now.”
    So:
    1. wildly uneven distribution of wealth (ie., 25 million for Tom Hanks, scale and a donut for you)
    2. a small flat fee, not a percentage of the net, with a vague promise the AMPTP will “revisit” the issue in three years.
    What exactly, are we playing at? Sure, everybody wants to get back to work, but, if we accept this, what’s the point of what we’ve been doing for 11 weeks?

  5. Stuart Creque says:

    Yes, and the DGA deal doesn’t even address the WGA’s jurisdiction over reality and animation writers. So of course the strike will need to continue until the AMPTP concedes those.

  6. Ashley Gable says:

    There is another way to view the AMPTP’s actions that I think is far more persuasive than the above analysis: they planned from the beginning to make a deal with the soft target of the DGA rather than the WGA.
    The companies never intended to negotiate with the WGA. That is evident from their obdurate behavior since back in July. Jesus Christ could have been the writers’ chief negotiator, and the AMPTP still would have walked away from the table. Their plan from the beginning was to make a deal with the more pliable DGA first and use that deal as a wedge among the writers. (They ran into a little difficulty when the DGA held off negotiating for two months, and that’s why the companies are in such difficult straits now.)
    The AMPTP is using its playbook from ’85, in which they got the DGA to agree to the disastrous home video formula and through the wonder of pattern bargaining, all the guilds have been punished by it for 20+ years.
    Now the AMPTP is betting on the fact that the writers will take the DGA deal sight unseen (after all, there’s only a press release right now).
    It’s a pretty smart strategy, actually — and has nothing to do with whether the WGA leadership communicated well. C’mon — the Companies thought the WGA leaders _wanted_ to strike? Marc Cherry, Carlton Cuse, Carol Mendelsohn, John Bowman, Shawn Ryan — all with shows on the air — wanted to strike? Really?
    Doesn’t even pass the laugh test.

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