As congloms' digital revenues grow, scribes will want a bigger slice

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Above: Writers picket in Century City in 2007

Five years after the end of the writers strike, the Writers Guild of America and Hollywood’s other guilds are gearing up for what could be contentious contract talks in the next negotiations cycle.

The WGA has not yet named the chiefs of its negotiating committee nor set a date for starting talks with the companies on a deal to replace the current three-year pact that expires May 1, 2014.

Nobody’s talking specifics yet, but the dynamic in the biz could set the stage for renewed wrangling over digital residuals and royalty payments, which were at the heart of the 100-day strike that ended on Feb. 12, 2008.

Barely a day goes by without one of the major congloms unveiling a new digital content licensing pact. In its fourth-quarter earnings announcement last week, Time Warner said it realized $350 million in SVOD revenue alone last year. The growing competition among Netflix, Amazon, Hulu and other emerging services has been good for content owners — opening the door for the creative community to seek a larger slice of an expanding pie.

The anniversary of the 2007-08 strike’s end isunlikely to be celebrated much in Hollywood, which was thoroughly rattled by the work stoppage. The industry angst about the possibility of a strike began months before scribes hit the picket lines on Nov. 5, 2007, with studios and networks loading up on “pre-strike” projects. When the walkout did happen, it came in the midst of the 2007-08 TV season. As a result, most scripted shows went dark, and dozens of writers lost their studio term deals to the force majeure ax before a new WGA contract was hammered out, with terms mostly mirroring the deal the Directors Guild of America reached about three weeks before — thanks in no small part to the pressure on producers applied by the WGA.

The WGA West even cancelled the 2008 Writers Guild Awards West Coast awards ceremonies, which would have been held during the waning days of the strike, although the WGA East went ahead with its awards program as the final details of the contract were being hammered out.

Since then, the WGA, SAG-AFTRA and the DGA have remained on relatively good terms with employers, and the last round of negotiations with the Alliance of Motion Picture and Television Producers, in 2010-11, was completed largely under the radar and without controversy. In all three successor contracts, the key gains were a 2% hike in minimums and a 1.5% increase in employer contributions to the pension and health plans.

With the general business climate improving and digital revenues rising, it’s likely that compensation issues will be back on the table this year. But there’s no sense on either side of the labor-management divide that tensions will reach strike levels anytime soon.

WGA West president Christopher Keyser (pictured right) told Variety that the 2007-08 strike isn’t much of a factor in the guild’s planning discussions for the negotiations.

“The conversation is very forward looking, and members are not replaying the strike,” he said. “We are spending an enormous amount of time on negotiations, but we won’t talk about priorities for many more months.”

WGA East president Michael Winship, who took the post a few weeks before the strike started, agreed.

“We’re in very preliminary steps right now in negotiations preparations without any decisions yet,” he said. “Members were pleased with what we were able to accomplish in the strike, particularly getting our foot in the door on new media.”

The WGA West’s most recent earnings report, released last July, showed that overall 2011 earnings dropped 5.9% from the previous year to $911.7 million. The decline was due to a 12.6% plunge in feature film salaries to $349.1 million as the six major studios focused more of their resources on tentpoles while making fewer mid-budget features.

New-media reuse of TV programs — one of the key issues during the WGA strike — grew 11.9% to $2.91 million in the fourth year of collections in that area.

In addition, scripts for independently financed projects are often written outside WGA jurisdiction; just as in 2012, four of the 10 Oscar-nommed screenplays this year were produced outside WGA jurisdiction — “Amour,” “Beasts of the Southern Wild,” and “Django Unchained.”

The guild’s restrictions for its WGA Awards require that scripts be produced under WGA jurisdiction or under a collective bargaining agreement in Canada, Ireland, New Zealand or the U.K. and that the scripts be formally submitted for consideration. Unlike the other guilds, the WGA is the final arbiter on screenplay credits.

Winship said there’s no plan to change the WGA policy.

“We feel very strongly that the awards should honor members and signatory producers,” Winship noted. “And we want to encourage those who aren’t to become, such as Lucy Alibar on ‘Beasts of the Southern Wild.'”

Both presidents will speak at the WGA Awards, to be held at simultaneous ceremonies Sunday at L.A. Live and at B.B. King’s in Manhattan.

Winship said the overall economic situation for the 12,000 WGA members is a bit wobbly.

“Members are having the same kind of situation as we are nationally,” he said. “In other words, a few of them are doing very well and a large number of them are struggling.”

Signalling continuity in the executive suite, the WGA West board recently gave a five-year contract extension to exec director David Young, who organized the 2007-08 work stoppage. He was widely credited for running a well-organized strike featuring extensive picketing and rallies that benefited from strong support by SAG and the Teamsters.

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Deeper Dive

Variety deputy editor Cynthia Littleton tells the backstory of the 2007-2008 writers strike and analyzes its lasting impact on the TV biz in her new book “TV on Strike: Why Hollywood Went to War Over the Internet,” from Syracuse U. Press.

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