The significant progress made in the DGA’s tentative contract agreement with the majors stands as a 
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.
