WGA Strike Primer: Looking at the DGA Deal Memo

There is a certain psychology that tends to come with the announcement that "a deal has been made." Especially during a labor stoppage, when so many people are desperately looking for a resolution, that phrase has such a powerful allure.

And it should. A deal does offer hope. But a bad deal gave craft guilds 4-cents in home video. So, where does this deal between the AMPTP corporations and the DGA fit in?

There are 12,000 members of the Writers Guild. That means there are 12,000 answers. This is just one.

The WGA remains waiting to see the DGA deal, prepared to make a reasoned assessment. Like the rest of us, all we have is a press release. So, no full judgment can possibly be made yet, by anyone. Including here. Just early impressions.

The best thing for writers is that the AMPTP now seems willing to talk again. That's huge. But make no mistake, this is no "olive branch." This is part of a calculated strategy to wait out the WGA and get the acquiescent DGA to make the lowest deal, before going back to writers. That the AMPTP corporations are now willing to have "informal discussions" to see whether formal talks should re-start is very positive. It's also disingenuous, because the AMPTP knows full-well why they should negotiate. Sure, this is a face-saving phrase, so let them have it.

(And how nice that the AMPTP realizes it can now deal with the WGA's evil, crazy leadership. What a surprise.)

It's important to keep in mind when looking at the Directors Guild offer that this is an offer for -- directors. Though areas overlap with writers, two-thirds of the DGA are assistant directors, unit production managers, technical coordinators, stage managers and even production associates. For just one example, residuals are not remotely as critical to the DGA as they are to writers.

In the DGA press release, there are some very good issues. And some awful ones. But at least there are important issues worthy of discussion.

For instance, the press release mentions jurisdiction for the Internet. And this is huge, a major gain. But - no payment minimums are given for writing original content. Without any minimums, having jurisdiction is meaningless. (It's akin to being the King of Big Screen TVs. Though the title is nice, you're lacking military support.) Though an empty phrase, it's a phrase that at least can be built on. Make that, must be built on.

Similarly, the definition of "low" budget could be improved. More importantly, it's unclear what would happen if a webseries moved to network TV. That's not an acceptable loophole.

While ad-supported streaming is an impressive five-fold increase on the WGA offer, it's still just $1,200. (And sitcoms a paltry $600.) Further, since that dollar figure doesn't kick in for 17 days (or 24 for new shows), it would likely work out to zero. More to the point, either you pay for re-runs or you don't. (And you do.) Calling it "promotion" is a fake buzz-word to pay zero.

Would a network shift all its reruns to the Internet to save ungodly money? It doesn't seem likely, and would probably cause an explosion among craft guilds - but as we've learned, the AMPTP corporations seem tone deaf to explosions. ("If you don't like it, go on strike," might become a familiar phrase.) But the question isn't "would" they do such a thing, but could they? And they absolutely could.

I'm reminded of an amazing line sent to me by Larry Gelbart in private email. To this day, I can't believe it was just a tossed-off comment, and not something from Bartlett's Book of Quotations -

"Why go out of our way to create loopholes of any kind that history teaches us will be turned into nooses?"

- Larry Gelbart, December 16, 1992

So, close the loophole.

The DGA deal does include a "Sunset Provision" which sounds comforting, to revisit the numbers in three years. But this is the most hollow point of the whole deal. The AMPTP corporations haven't revisited home video/DVD in 24 years and even demanded the WGA take it off the table this year. They haven't revisited cable rates in the 19 years since being introduced. Whatever writers want, they had better get now. Because it's not being revisited.

Receiving distributor's gross for streaming is a significant start. Though low at 2% and only after the first year, it's certainly positive that an offer was at least made.

In his soft defense of the deal in Friday's L.A. Times, DGA president Michael Apted notes that it's too early to determine when "those riches will be tapped" from the Internet "gold mine." Hint: they are being tapped now. Vendors making their living from such things would burst into laughter at the Consumer Electronics Show when told the AMPTP corporations wanted three years to study if there was a profit in New Media. Further, the biggest New Media profit center of all is meta data - selling embedded information about users. It's what allowed Google to become a multi-billion dollar phenomenon, while giving away its free products. Income from meta data likely tops that of the content.

AMPTP corporations like to insist there's no profit in the Internet. They also insist there's no profit in movies and TV. It's shocking that any of them are still in business. There's a profit in the Internet. New Media is mature. Income from meta data is huge. Paramount just signed a deal for $500 million with Microsoft. Writers should go to the table armed with the understanding that that "gold mine" is being tapped.

For all that's excellent and problematic in the deal, the biggest question is why the DGA negotiators felt compelled to rush this deal now? Their contract isn't up for almost half a year. Did Gil Cates want to save the Oscars that badly? It's hard to figure that this is the best deal they thought they could get this early.

While there is pressure on the WGA to settle the strike, there is pressure, too, on the AMPTP corporations to settle. The end of February is a major deadline for the billion-dollar ad "give backs," the loss of next TV season, the loss of next year's movie slate, the $100 million loss of the Oscars and more.

So, is this the basis of a good deal for the Writers Guild?

The DGA offer remains subject to analysis once the full numbers are made known. From the press release, there appear enough good and encouraging points that are highly-worth negotiating towards a settlement, and that's wonderful. But as a final offer for writers? No, there are serious problems in the release that need to be addressed.

Additionally, many writers would like to see DVDs back on the table. (The AMPTP, after all, did raise the rate for downloads.) And the famous "six issues" - important to writers, but not the DGA - should be dealt with properly: if the AMPTP corporations don't want to give Reality writers health care and overtime for 90+ hour workweeks, for instance, so be it, but they should offer something in return for the WGA taking such human decency issues off the table.

(Keep in mind, too, all WGA analysis precludes the question how SAG reacts to the deal. Some of those "six issues" were of importance to SAG, as well. A WGA member willing to toss some important issues to finally end the work stoppage could find a more-militant SAG voting down a similar offer, in which case the work stoppage will continue. Indeed, as Mr. Apted acknowledges, the DGA had both the WGA and SAG in mind when settling its deal. Writers would seemingly be wise to at least keep an eye equally-open, especially towards friends.)

Mostly, though, it's important that there was a DGA settlement, period. This allows the proper process of dealing with the strike to finally (hopefully) move forward. What exists is only an offer to the non-striking Directors Guild. There are certainly enough positives in the DGA offer that create a starting point for writers, with their very-different concerns. There is also far too much that must be addressed. But (hopefully) it will. And now that the AMPTP corporations are at last willing to discuss whether to discuss, that's the best thing of all.

(Only one thing raises unknown caution about the offer - that the DGA has not immediately sent a copy to the Writers Guild. This suggests they don't want it studied.)

In the end, anyone moping that this is a sell-out, with nothing good, that's hyperbole. Anyone dancing on rooftops that this is a great deal for writers, with nothing bad, that's hyperbole and just as harmful. Especially since we don't even know the deal yet. It appears to be a good, worthy start. But - it's just a start. Now, the negotiations begin.

And it all could have been offered a month ago.

Comments

[HLM]

unidentifiedman:
Your opening statement bears re-examining:

"...Is this a byproduct of the creative writer's maxim, never let the truth stand in the way of a good story? 1. The DGA did not rush to settle. It routinely initiates negotiations early so that a contract term doesn't end without a deal, or a plan. They do this to avoid a strike..."

I read that opinion as a fairly clear insinuation of failure on the part of the WGA to take equal precautions - an inconvenient truth, as it were. Your premise would be valid, were it not for the fact it's a convenient untruth. The WGA attempted for months to begin pre-expiration negotiations with AMPTP. They were ignored. AMPTP didn't take any of the WGA's calls. They had (have) other plans.

[unidentifiedman]

see above.
6. People who live in glass houses designed by boutique architectural firms to maximize ocean views should have the dignity to refrain from complaining too loudly. Of course, not all writers, actors, or directors are in this category but those who are have effectively distorted the business model of our industry. They don't risk their money in the process. They, in fact, we, all get paid whether the show succeeds or fails. It is fair to note that ALL CEO's make stupid money.
7. We are not involved in meta data, or the sale of mickey mouse ears online, or theme park vacation packages. The studio profits in those areas are of interest to us as shareholders, but they are not part of our negotiations.
8. Michael Apted did not make a defense of the DGA deal, soft or otherwise. He made an announcement, measured and accurate. He did not gloat or whine. His circumspection should be a model.
9. Like everything else, labor actions take place within a larger context. The signs of a national, if not global recession were clearly visible long before the strike was called. I wholeheartedly support the principles the WGA is fighting for but reject its timing and tactics. I ask, "Now you want to be on strike? Now?"
Finally, I earn residuals. I want and need to earn residuals and I want earn them when my work is distributed on new media. I agree that the DGA deal is better than it might have been were the WGA not on strike. And it was a deal made with the interests of all the Guilds and the industry in mind. It should not be considered a starting point to reopened negotiations. It should be applauded. All who want to, or need to, can pat themselves on the back and let's try to go back to work, together.

[unidentifiedman]

Ignorance is bliss but this kind of determined ignorance is just not nice. It is one thing to be wrong and another to be wrong again and again. Is this a byproduct of the creative writer's maxim, never let the truth stand in the way of a good story?
1. The DGA did not rush to settle. It routinely initiates negotiations early so that a contract term doesn't end without a deal, or a plan. They do this to avoid a strike. Why does the DGA want to avoid striking? Because a strike hurts a lot of people and most of them will never recover their losses, no matter the eventual outcome.
By the way, has the WGA estimated how much income its proposals, (the realistic ones, not the talking points) would actually generate in the first year of the contract, the second year, the third? How long will it take to recover the losses from this strike?
2. All DGA members depend on residuals. The DGA health plan is almost entirely paid for by residuals. A health plan is arguably the most important reason to belong to a union. AD's (many of them do earn residuals), and UPM's know that and wholeheartedly support the fight to extend residual payments into new media.
3. Gil Cates is not the enemy.
4. The majors initial foray into new media was the creation of Movielink. They invested $150,000,000 and sold shortly thereafter for $100,000,000 less. Yes, sometimes it is a wonder that they make any money at all.
5. And yes, CEO's do make stupid money...as do some stars, some directors and some WRITERS! Why is it never mentioned that television writers routinely earn more from their producer titles than they do from their writing credits? The actual labor folks around the set consider the writers to be management. Talk about a blissful denial of an obvious conflict of interest, when a writer claims that his crew supports the strike, leading me to note that...
to be cont'd

[Spikethedog]

Elisberg asks, "For all that's excellent and problematic in the deal, the biggest question is why the DGA negotiators felt compelled to rush this deal now? Their contract isn't up for almost half a year. Did Gil Cates want to save the Oscars that badly? It's hard to figure that this is the best deal they thought they could get this early."

Simple: the DGA wanted to get this deal done now to force the WGA to end its strike. By quietly telling the Alliance they'd procrastinate settling the issues which brought the WGA to strike the DGA is undermining the WGA's position.

Just look at what the DGA has already announced -- never mind the details -- and you'll see that they've already conceded some of the Alliance's demands and sent a message to the DGA that writers are on their own now.

The message from both AMPTP and DGA is clear: the WGA's trying to piss up a rope now. This agreement is nothing the WGA should cheer -- it's a sign that the DGA and AMPTP are both belittling the WGA's position and its demands.

I think this strike's going to end up further weakening the WGA, a process that was surely accelerated during the pussilanimous term of former WGA ExDir Brian Walton.

Like the last strike, this one's going to end with a whimper, not a bang.

[shortgirl]

Thank you Mr. Elisberg.

Interesting letter from Paul Haggis at http://unitedhollywood.blogspot.com/

[petegrif]

thanks Robert

[MrsWakely]

As the go-to guy for sanity, I, once again, say gracias.

New York Times: 1-19-08
Bob Herbert:
“The distribution of wages, income and wealth in the United States has become vastly more unequal over the last 30 years. In fact, this country has a more unequal distribution of income than any other advanced country.”

New York Times: 1-19-08
Writer's Strike Tests Mettle of Two Outsiders:
"The directors decided that this was not the time to make a stand on new media, agreeing to revisit compensation for their distribution of their work over the Internet, cellphones and other digital media three years from now."

So:
1. wildly uneven distribution of wealth (ie., 25 million for Tom Hanks, scale and a donut for you)
2. a small flat fee, not a percentage of the net, with a vague promise the AMPTP will "revisit" the issue in three years.

What exactly, are we playing at? Sure, everybody wants to get back to work, but, if we accept this, what's the point of what we've been doing for 11 weeks?