Tag Archives: entertainment law

Cracks In The Veneer

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The three month old writers strike dramatically reduced the number of produced programs for the 2007-08 television season and pilot season is now in jeopardy. Movie deals are on hold; term deals have been terminated for force majeure and thousands are either out of work or about to be let go (including several agents I know who are hard pressed to find any other form of meaningful work – go figure!).

Studios and guild reps are under a news blackout while they engage in back channel and informal discussions regarding the strike impasse with the goal of more formal talks in the next few days; the first since negotiations broke down on December 7th.

Guild leaders recently withdrew their animation and reality TV proposals. They also agreed not to picket the Grammys. The Guild’s actions could be viewed as good faith concessions to help restart negotiations. On the other hand, they could simply be signs of strike fatigue and capitulation. Whatever the motivation, the AMPTP’s perception (and that of the WGA membership) stand to profoundly affect the psychology of pending negotiations and ultimately, the outcome of any deal.

While the Guild’s alternatives are limited, their current tactics may weaken the leverage that only a complete shut-down could support. The Guild continues to enter into piecemeal agreements with independent production and distribution companies – most recently, Lions Gate, RKO, Marvel and The Weinstein Company – based on the WGA’s initial proposals in an attempt to gain additional leverage. The WGA is betting that these deals will put pressure on the studios and networks to settle. However, the AMPTP dismissed these pacts as meaningless “one-off” agreements since the terms will be superseded by any deal ultimately negotiated by the parties. The Guild also runs the risk that these deals will split the rank in file between those working and getting paid on waiver-projects and those that remain unpaid and on picket lines. The Guild is already contending with an erosion of support in some quarters.

Certain Guild members are already grumbling about the prospect of “going financial core.” Rumor has it that a number of writers continue to develop projects during the strike “without paper” (i.e., without a written agreement in place) to pay the bills. It’s obvious to anyone watching “The Daily Show” or “The Cobert Report” that staff writers continue to work for these shows despite strike rule prohibitions. Hey, but I could be wrong.

With those reservations, there are several good things going for this latest round of talks for all concerned.

The principals are now talking instead of their reps. To be sure, representatives for both sides are still involved with these discussions but direct communication by the principals can diffuse the current hostility between the parties and allow them to refocus their energies on material deal points instead of petulance and platitudes.

The Directors Guild pact can be used as precedent. Since the AMPTP closed their deal with the DGA, the parties can now use the material terms of that agreement as a template for their own negotiations and adjust their respective expectations to those deal points in which there is a real prospect for consensus.

Weakening resolve on both sides. The studios and networks are quickly running out of content; writers need to work. Both sides realize that given the strike’s enormous financial toll on individuals, the local economy and corporate profits, it is in everyone’s best interests to work a deal as soon as possible; ideally before the Oscar telecast on February 24th.

Lastly, both parties should offer the other an ego nickel; a deal point or two of minimal value to the giving party that validates the receiving party’s demands enough for them to save face with their constituencies. Sooner or later, the parties will be working together again and a few ego-nickels might expedite closure of a deal both parties can live with if not embrace.

Required Reading

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As part of my daily online read, I culled the following from the past week or so. Usually I post these links and any editorial to facebook. I am going to start posting the most significant ones – those that I think are required reading for reps (and our respective clients) – on a regular basis to dealfatigue. Please let me know what you think.

Scrabulous Facing Copyright Infringement Charges

Change in the Business Model at EA Games

In Tentative Deal, Directors Send Message To Screenwriters

Arts Council in England Taketh (and Giveth), Leaving Anger in Its Wake

Netflix lifts limits on seeing online movies Read this if you read anything today. This is where video (and TV…) are headed. Wondering if it’s possible to do a deal with Netflix and Apple directly as you can with music.

Which comes on the heels of . . .
Apple Bets on Online Movie Rentals

Oprah Winfrey getting her own TV network

TV studios cut more overall deals
Companies cite WGA strike as main cause

Steroids beyond sports
Celebrities now among those linked to drug shipments

American Library Association announces literary award winners

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.