Moguls remain restrained in public but privately are angry about the WGA’s latest demands; which is going to make it nearly impossible to do a deal by Christmas. Directors Guild waits and watches, but not for long.
By Alex Ben Block
HOLLYWOOD, CA (Hollywood Today) – 12/06/07 – The striking writers have finally engaged management in a real negotiations, but they may have just enraged them instead. As the renewed talks continue into a fourth day this week, the Writers Guild may not be happy when they hear how much some executives of big six companies hate the WGA proposals on new media. “If we did what they have proposed,” one CEO told me yesterday, “we would lose money every time we streamed a show over the Internet.”
He isn’t counting just the cost of higher royalty payments to writers, but the multiplier effect it will have as a precedent which the directors and actors will follow. All those flat payments based on number of viewers, no matter what the content returns in advertising or even promotional value, would be significant: about 150% of the producer/distributor’s costs, says the angry mogul.
He believes the guild isn’t knowledgeable or realistic about the business and faults chief negotiator David Young for being more interested in union building than in making a deal. The Alliance leaders grumbling about Young is an old story already but it still remains an open wound to this mogul, and a subject of constant discussion among the companies who call the shots at the AMPTP.
There are signs the writers unity is working – reports of dissention among the ranks of the AMPTP’s key members; a softer stance by management in PR and negotiations in the past few days; and comments suggesting that management proposals are flexible.
However, what I am hearing is that this could be another sucker punch for the writers, who think they have finally broken though into a new level of negotiations where the two sides talk things over instead of talking at each other. “For the last two days, we have had substantive discussions of the issues important to writers, the first time this has occurred in this negotiation,” the WGA Negotiating Committee wrote to guild members. “However, we are still waiting for the AMPTP to respond to all of our proposals, including Internet streaming of theatrical and television product and digital downloads.”
When that response does come, the guild negotiators may not like what they hear. I’ve spoken to several moguls over the past few days (since I accused them of ‘Swift Boating’ the WGA) and if their mood means anything, there is no easy or quick resolution to this strike. Whether they own networks or not, they are adamant that they will not agree to the creation of a old media cost structure on new media, that would slow down the creation of new business models; and none of them believes they should have to pay more than the Home Video rate for digital downloads.
These moguls are angry that the Guild has been trying to pressure them in these talks to give them jurisdiction over reality TV shows and everything on the Internet. These same companies have for months successfully resisted the organization of reality TV shows. In the few cases where they had to unionize because of the pressure, most have done deals with the IATSE or AFTRA instead of the WGA, which has higher costs. So they are not going to negotiate away what they have successfully resisted over recent months, and consider the discussion a waste of valuable negotiating time.
The right to organize and be paid for work over the internet is the heart of this job action for the writers. The big six moguls say they are willing to share, but plead that the business is changing and they see the writers as unrealistic. As more goes on the Internet, there is less revenue from other places, such as reruns on network TV. However, he grumbles, the guild wants to keep in place all the old costs, and put in place a whole new set of costs that insure they are paid whether the project makes money or not.
In its public utterances, the AMPTP continues to use its indoor voice, no doubt fine tuned by a new PR team. “We remain committed to making a fair and reasonable deal.,” the AMPTP said in a statement late Wednesday. “ We believe that there is common ground to be found between the two sides that will put all of us in the entertainment industry in a better position to survive and prosper in what is a rapidly changing modern, global marketplace. Our New Economic Partnership proposes a long-term sustainable future for our industry where we all stand to benefit, including providing more than $130 million in additional compensation for the writers above and beyond the more than $1.3 billion the writers already receive each year.”
Of course, management has yet to detail how they came up with that $130 million figure, so the writers remain skeptical. Part of what has given them hope, however, is that management is throwing around such a substantial figure. The problem is going to be how to allocate that amount, and how to satisfy the need for writers future security with the companies pressing desire to let the Internet develop as freely as possible, without having to play by the old rules.
The AMPTP’s new PR team includes PR people from a number of studios, now joined by consultants from politics, not show business, from both sides of the political spectrum. They include consultants Mark Fabiani and Chris Lehane of Fabiani & Lehane, known for political PR for President Clinton and VP Al Gore; and Steve Schmidt of Mercury Public Affairs, who worked in the administration of President George W. Bush and more recently for Gov. Arnold Schwarzenegger.
One mogul told me that the AMPTP had done a terrible job of public relations so far; and that this would start a new era. I responded that much of the public and the industry see this as a fight between David (the guild) and Goliath, and Goliath is always going to have an image problem.
Management has laid back so far but their hatred for the WGA proposal will bubble to the surface, and will be an obstacle to any deal. There were signs of progress and real hope that a deal could be done before Christmas earlier this week, but don’t get out the tinsel too quickly. There is no quick settlement at hand.
If the strike does drag on, expect the Director’s Guild to take an independent stance and begin early negotiations on their own contract, hoping to set a precedent that the writers will then follow. Until now the DGA has held off even setting a date for negotiations at the request of the WGA; but if these December talks break down, the DGA can be expected to move unilaterally early next year.
So seething moguls are waiting to spring their surprise on the writers, and knock them back down to earth; and when the inevitable happens, there will be little left to cheer this holiday season. These talks appear headed for a strike out.