Non-Scripted Outlets Want A Bigger Piece Of The Hostess Pie

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The Food Network made Emeril Lagasse and Rachael Ray into television stars and household names. They’ve also become multi-millionaires from the sales of countless books and other merchandise; revenues the network admits are typically excluded from their talent deals.

The NY Times reports that about a year ago, the “Food Network began aggressively trying to change that with new deals that were ‘way more onerous’ from the stars’ point of view, said a person who has been affected by the changing strategy, by insisting on a stake in book deals and licensing ventures, and control over outside activities.”

This is an important sea change in talent negotiations on non-scripted programming. While my experience has been that network participation in merchandising has been part of the ask from cable outlets, it has not, for the most part, been a deal breaker and then only when it arose from an outlet’s desire to embark on its own merchandising efforts (i.e., revenues from branding the network as opposed to the talent).

The Food Network’s approach will likely influence future negotiations at other outlets breaking new talent in their programming though probably less so on deals featuring talent with more hosting experience (i.e., brand recognition in their own right) or have pre-existing merchandising deals. Such talent will have more negotiating leverage but if pressed, may be able to negotiate limited outlet participation “above a baseline” from any bump in merchandising revenues after hosting the outlet’s programming.

No Strike Waivers For TV Yet But Web Start Ups Tempt Writers

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Variety’s Dave McNary reported that the WGA rejected requests for strike waivers by the Golden Globes and Oscar telecasts today. While the Guild granted waivers during the strike in 1988, I doubt they will now- even to Letterman and Leno -until and unless meaningful negotiations resume for two reasons. Awards shows present a high profile opportunity to make an adverse and very public impact on the quality of these telecasts. Secondly, any waiver now, absent meaningful negotiations and in the face of mounting holiday debts for WGA members, may erode the widespread support of Guild members to the cause.

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The LA Times ran a story that striking writers are in talks with venture capitalists to finance and launch Internet start-up companies. “Silicon Valley investors historically have been averse to backing entertainment start-ups, believing that such efforts were less likely to generate huge paydays than technology companies.” There’s been a change in that perspective, albeit a limited one, after the success of Youtube. I’ve been involved in several of these deals. One started just before the strike and was in production as late as last week. They’re interesting opportunities on the cutting edge of where the entertainment business appears to be headed. However, without the right business model, these ventures will – if they go anywhere – lead to cross-over deals for TV programming rather than a big pay day for an Internet venture. It reminds me of Web 1.0′s icebox.com or my stint with Film Roman’s Level 13 back in the day. Despite the risks, more and more of my clients are migrating to the Internet, if not for the potential payoff then for a chance to broaden their experience and marketability down the road.

Internet Delivery Now Streeting With Traditional Home Video

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Jonathan Handel’s blog alerted me to the pending “day and date” release of the “The Bourne Ultimatum” on both DVD and via Internet delivery on December 18th. As Handel and the LA Times report, this will be the first day and date release of a motion picture on video in both Internet/electronic media and physical media. Usually (if there is such a thing given the pace of things now), electronic delivery of a motion picture streets with the pay-per-view or pay-TV windows.

Simultaneous Internet/Home Video release dates are consistent with current deal terms and those of older vintage that producers and distributors routinely negotiate for home video rights on motion pictures. The difference now is the form of delivery; physical media vs. electronic media. Although the revenue splits on existing deals might get tricky depending on the terms negotiated, the business is already acclimated to evolving home video revenue structures having moved from the traditional royalty formula to revenue sharing. While Handel correctly raises the prospect of brick and mortar retailer resistance, I suspect the issue of greater impact will come from producers, actors, financiers and other profit participants on motion pictures. Once they become aware of the more favorable cost differential between video tape manufacturing costs and broadband delivery they will expect a payment structure that accounts for the savings much as the WGA is demanding now.

“Drinking From The Trough Of Distrust”

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That’s what I said as I cautioned the rep on the other side of recent negotiations unrelated to the WGA strike talks. I was sharing my very real concern that our negotiations were polarizing our respective clients and actually making it harder, if not impossible for us to close a deal.

Strike negotiators for both sides are well advised to conduct themselves accordingly. Dave McNary wrote in Variety that talks tanked late on Friday “after two weeks of bitter and unproductive negotiations” with no real sign of when or whether they will continue any time soon. Sounds pretty grim but maybe a holiday hiatus from hostilities (and several good nights’ of sleep, I suspect) will make for more productive negotiations. For a thorough breakdown of the issues, check here and here.

Prior to Friday’s “cratering,” Robert King, a member of the WGA Negotiating Committee, blogged prosaic on the state of negotiations and the current mindset of the parties this way:

Part of the problem of negotiations—and especially this negotiation—is that both sides tend to interpret the contractual proposals and counter-proposals in one way: as an attempt to fuck them. This is complicated by the fact that sometimes management’s proposals are designed to do exactly that; and sometimes they aren’t designed to do that, but might be used later by less enlightened souls to do that.

So dialogue, in a smaller room, with fewer people, and less of the theatrics of negotiations, allows everyone to discover what wasn’t designed to fuck; or was designed to protect against being fucked by someone else and has only the appearance of a personal fuck; what was inelegantly put; what has unintended consequences, etc. It’s also a place where language can be designed that satisfies everyone’s fears of being fucked.

In other words, sometimes there is the illusion of being farther apart than we actually are; and smaller side bar dialogue helps us discover if that’s indeed the case.

And then again there is just plain old being far apart.

Hopefully, this breather will allow cooler heads to prevail at the negotiating table. The studios and networks will start feeling the pinch from dwindling project reserves and the first stirrings of pilot season. By mid January, mounting financial pressures from holiday purchases and the lack of work will compel writers to return to the bargaining table. Maybe then, the parties will find creative ways to resolve the issues amicably and resourcefully.

And then again there is just plain old being too far apart.