Category Archives: Negotiations

Guilds, Negotiations, Writers

The Waiting Game

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Good morning! It’s November 1st, the sun is still shining and the world is still spinning. As of this writing, hell has yet to break loose from a writers strike. As noted in earlier posts, Nikki Finke seems to have the most up to date (and inside) information on where things are going. You can also find a “pro-WGA” blog here. I’m not aware of any pro-AMPTP blogs. Please let me know if there are any. In the meantime, like many reps in town, I will continue to work on deals that have yet to close.

Apparently, talks fell apart early last night when the studios/nets refused to consider modifying the current residual formula for DVD sell-through. The 1985 formula, under which DVD and video residuals are paid on the basis of 20% of wholesale revenues (i.e, the writers will receive four cents for each DVD or video “unit” sold). The WGA wants to double that rate, arguing that the Guild only agreed to a discounted deal to kick start the video business. The studios/nets oppose any increase, maintaining that the current formula is a crucial element to recouping their skyrocketing production costs.The WGA also wants to increase the residual calculation on electronic sell-through revenue from 1.2% of the licensing fee for each downloaded picture to 2.5%.

I really don’t have skin in the game here. Unlike some agents, my clients will continue to pay my legal fees; strike or no strike. Nevertheless, I agree with the Guild on this issue. There’s enough money in electronic DVD sales for everybody. The studios/nets’ response to this issue is draconian and overly aggressive. Rep translation: they’re being chazers.

On the other hand, if the WGA calls a strike just days after the parties engaged a Federal mediator to help resolve this dispute, the Guild risks appearing to have acted in bad faith without regard to progress in union negotiations.

Both sides hopefully appreciate that their actions are being closely watched by their respective constituencies who expect their representatives to act in their best interests. Whether each side will conduct itself accordingly remains an open question.

Guilds, Negotiations, Writers

Writers Want (And Should Take) More Time To Call Strike

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Writers wanting more time? What a surprise. Glad to hear there’s probably a delay (though I’m still predicting that they will close a deal without a strike). In any event, I have a number of deals that won’t close by tonight but might close next week if I had more time. Then again, nothing closes like a ticking clock with minutes to go. Check out Nikki Finke’s update here as well.

Now, back to work.

Guilds, Negotiations, Writers

G-Men Mediating WGA Negotiations

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On Friday night, Dave McNary reported in Variety that after three months of unproductive negotiations and just days before the current contract expires, the US government is set to mediate negotiations between the WGA, the networks and the studios. The parties are also taking a three day weekend with talks to resume on Tuesday with Federal mediators. That leaves the parties with just two days before the current agreement expires and the writers can strike. Nothing like waiting until the last minute. The WGA can tell its members to stop writing and start picketing as early as Thursday. However, if negotiations are going well, Guild members could continue to write under the expired contact.

As I wrote here and here, if the WGA presents a credible threat of a strike to the networks and studios, the Guild can effectively increase its leverage in the negotiations. McNary wrote that “the WGA plans to take the talks down to the wire, when fears of a strike may push studios and nets to soften on a contract issue in order to avert a work stoppage.” That’s a powerful strategy if they actually buy it. The key to successfully pulling it off is the WGA’s willingness to actually follow their threats with action and go on strike. Although this strategy may sound obvious, it isn’t because once the Guild “goes nuclear,” they lose whatever control the WGA has over the outcome and the significant power of fear is reduced by the real consequences of a strike. You can see how this strategy recently backfired here.

Specifically, if the WGA successfully induces fear of loss of a good deal, loss of money or worse – unknown, unquantifiable consequences – then they’ve got a pretty persuasive negotiating tool. From my perspective, the WGA is being very persuasive. I must have taken over 20 phone calls between 4 and 6 pm on Friday afternoon; all from cranky reps (we’re all working on less sleep) trying to close deals before Halloween and a potential strike date.

Nevertheless, I’m not buying it. As I wrote in my previous posts, a strike would seriously harm the overall health of the industry. Everybody involved knows that. So, I’m betting my money on the Feds closing a strikeless deal with the parties before Thanksgiving. Any takers?

Guilds, Negotiations, Writers

Opting For The Bigger Hammer

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The WGA is ratcheting up the rhetoric by recently issuing hardline rules to its 12,000 members if the guild goes on strike as threatened. In today’s Daily Variety, Nick Counter confirmed that the rules the WGA issued last week include “bans on writing animated features and for the Internet, even though those arenas are largely not under WGA jurisdiction. The strike rules bar any writing for struck companies, delivering any material or signing documents relating to writing assignments; they compel members to honor guild picket lines, perform assigned strike support duties and reporting strike-breaking activity. Discipline for violations can include expulsion, suspension, fines and censure; nonmembers who perform banned work during a strike will be barred from joining the WGA.”

I expressed my concerns regarding an actual strike earlier this week here. As I suggested, the WGA is following a fear of loss strategy; just not the way I envisioned. The WGA is threatening its own members with expulsion and other severe penalties and barring non-WGA writers from future membership if they work during the strike under certain circumstances. Although somewhat draconian, the WGA’s strategy serves several goals. It’s a shot over the bow with the studios and networks and it ensures that the guild’s members actually honor the picket lines. In my previous post, I linked to an article about last month’s taxi strike in New York, which failed in part because many drivers continued to work during the strike. If striking proves to be ineffective, the Guild’s negotiating leverage can be even more diminished than had they not gone on strike at all.

Several writer and producer reps I spoke with yesterday during negotiations (reps like to digress into other subjects in an attempt to regain leverage) believe that the Guild’s strike rules may be unenforceable; especially against non-WGA members. Frankly, it smacks of restraint of trade to me but that’s not my bailiwick.

As I noted in my earlier post, the threat of a strike is having a dramatic effect on the pace and terms of negotiations with writers. This week brought new surprises, with reps on deals I was negotiating demanding contractual pledges that their writers work through any strike and extending force majeure terms to ensure that a long term strike is covered. As with the WGA’s strike rules, strike breaking pledges probably raise enforceability concerns.

Such fears are carrying the day. I look forward with some trepidation to the outcome of all of this like a driver stuck in traffic easing up to a bad car accident.