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.