WGA Strike Primer: The Endgame

In the beginning was the word - yet the word most heard these days in Hollywood is not about the beginning at all, but the end. What is the "endgame" to stop the strike? Ultimately, that's the only thing that matters. And with the AMPTP corporations negotiating instead with a guild not on strike, there's just one endgame people are most-wondering about -

Are the AMPTP corporations willing to scuttle the 2007 TV season, drop the pilot season, lose the 2008 TV season, wipe their slates of all movies for the next two years and put a nuclear missile-laser on the moon to blackmail the world's governments? (This latter seems far-fetched.)

Certainly, scuttling is possible. Indeed, it would be a powerful endgame strategy that would rock the Writers Guild of America. Only one thing argues against it.

It makes absolutely no sense.

For this Scorched Earth endgame to work, it means - 1) the AMPTP corporations would throw away countless billions in income and ad revenues. 2) TV networks would risk losing their audience to the Internet, Xbox, books, CDs and sex. 3) Movie studios would cut their distribution pipeline to theaters. And 4) the CEOs would forego their $25 million bonuses.

Add one other reason that my friend Mark Evanier notes. 5) The AMPTP would be willing to have writers, actors and even directors on strike at the same time, creating their worst nightmare when all contracts are up for re-negotiation simultaneously in 2011.

All this to avoid paying a tiny percentage of something they say is not worth anything.

It makes no realistic sense. Zero. The Wall Street firm Bear Sterns has said the impact of what the WGA is asking for is "negligible."

Importantly, for this AMPTP endgame to work, actors would end up on strike, directors likely, too, all crews would be out of work, all production staffs, most corporate employees let go, the L.A. economy would be in a shambles and the AMPTP corporations would crash into a heap of dusty plaster and torn gaffer tape.

It would he horrific for everyone. But it would be the death knell for the Hollywood corporations. Remember: for the most part, the AMPTP corporations don't actually make any product, they finance independent contractors. Writers, actors, directors can create their work for anyone. Venture capitalists, Internet companies, European film studios. Empty movie theaters will be desperate for product, whoever distributes it. Stream webseries on New Media. Sell original movies and series direct-to-DVD.

So, it makes no sense for the AMPTP corporations to have this as their endgame. That doesn't mean it won't happen. But - the CEOs understand reality. They know they'll keep making billions with a fair contract. But not with Scorched Earth.

So, that means perhaps there's another possible endgame.

Like: drop scary hints that the AMPTP may Wipe Out All Humanity, which gets some people flibberty-gibberty. Wait to see how solid the WGA support stays. Negotiate instead with the Directors Guild. Make a really mediocre offer and get them to cave early like they always do. And then hope writers and actors will break into dissension and fold like a wet suit of dominos. (Hey, I'm on strike, metaphors get mixed.)

Except there's a massive risk to the AMPTP in this endgame of mediocrity, too. First, WGA members are deeply solid, fighting for their Guild's future and therefore their livelihoods. Second, whatever the DGA board negotiates, 1,400 directors are also members of the Writers Guild, and not guaranteed to vote for what they perceive is a bad deal for themselves as writers. Third, the DGA spent $2 million studying New Media and could balk if the deal is too lousy, even by DGA standards. They've figured out the Internet is real. Fourth, if the DGA membership rejects the really mediocre offer and the strike continues, TV networks will end up paying billions in ad "give-backs". And finally, a really mediocre deal would not set any pattern for long-striking writers, who'd reject it. Which would later get rejected by actors. Which gets the AMPTP corporations right back to that nonsensical Scorched Earth Theory.

This means that of all the possible endgames for the AMPTP, only two make sense:

1) Eliminate the terrible risk of a long DGA negotiation blowing up in your face, and settle with the WGA by the end of February.

2) Make a good offer to the DGA, to show you can negotiate with "reasonable" people, because no one can negotiate with those "crazy" writers (unless you're David Letterman, United Artists, The Weinstein Company, MRC and Spyglass Entertainment...) - which is perfectly fine for writers. They've said they'll happily take a good deal wherever it comes from, especially after setting the groundwork for one.

None of this is a prediction. It's only a look at the possibilities and what makes sense. And what doesn't. But the DGA negotiating committee does have a history of caving to lousy deals, just to make a deal. And the AMPTP corporations will choose to do whatever in the world they fricking want. They've walked away from the table. Twice. Amidst an industry shutdown, they're negotiating with a guild that isn't striking. When they want to sit back down and negotiate a good offer and reasonable settlement with the Guild that's actually on strike, they will.

In the meantime, the writers are busy calling venture capitalists...

Comments

[MrsWakely]

I would respectfully suggest readin the overlong and overwrought explanation for the AMPTP's behavior I posted at various places on Mr. Ellisberg's last post - "directors say action."
I would guess Mr. Ellisberg has made a clearly strategic decision to present a united front in solidarity with all WGA and SAG members, whom he rightly praises for solidarity. However, when he gets into head scratching over "why" the AMPTP is behaving this way, it becomes disingenous. Any marginal understanding of the inequities in top-actor and top-director and top-showrunner salary and back end compensation would clearly suggest an explanation for why the AMPTP is doing what they're doing. They have, over many years, gotten themselves into an increasingly untenable econimic model by agreeing to the demands of top agents on behalf of their clients. The obscene sums paid these people has drastically shrunk the pie, and the AMPTP is looking to maintain their relationships with "stars" (their lifeblood) while squeezing everybody else (a.k.a. "people they don't give a shit about except that they, maddeningly, need them to make the product")

THAT'S the real story. While all us SAG and WGA members join hands and walk in circles and sing "Fight the Power," and wait for the DGA to swoop in and make their own self-serving shitty deal because residuals and new media are less important to them, I think Mr. Ellisberg might want to dedicate his next post to a factual examination of WHY the AMPTP is willing (so far) to blow up the business to re-set the table for NON-star compensation, which affects the overwhelming majority of those on strike in the WGA and those in solidarity with them from SAG.

[MrsWakely]

As I've written: I love stars, I've worked with stars, go stars! BUT, when you do a movie with a budget of 50 million, and 25 (!?) is going to the two stars, 5 to the director, and everybody else gets boned, you HAVE to begin to grapple with the AMPTP's admittedly self-inflicted predicament. What the AMPTP SHOULD be doing? Simple: re-set the table for "star" compensation. Tom Cruise (no offense, purely for demonstrative purposes) will have to get by on, say 15 million up front, and a piece of back end ONCE THE PRODUCERS MAKE BACK THEIR INVESTMENT. That, of course, requires open accounting, a non-starter for the suits. They need the flexibility to move money around to offset their losses, when approximately 75% of movies and TV shows fail.

But, lets keep it real. What we're not talking about is: the top producers, actors, show-runners and directors are BATHING in money, in a collusive "watch each other's backs" environment. The top dogs at SAG and the WGA (and the DGA for that matter) may TALK a liberal game, but when forced to confront the reality that their "union brothers and sisters" live lives of struggle to pay bills, to even stay in the business, BECAUSE there's NO money to go around once the "stars" make their ridiculous sums, do they follow through with liberal ACTION? Of course not. That would threaten THEM, to INSIST on spreading the wealth around a little more equitably, and their agents and lawyers and all the other pilot fish swimming just below their gaping pie holes will never allow that.

[Belowtheline]

1) Can anyone sum up the DGA research?
2) As a 3rd option to the endgame...perhaps the AMPTP negotiates until April/May with the DGA (then comes to an agreement everyone likes) during which time the studios/networks use the time to clean house, make changes to the "system" to improve bottomline and get out of deals they currently see as unagreeable.
3) Writers making deals with VC's is a pipedream. The only people making the deals will be the known writers with a track record (the current lesser percent of working writers)...everyone else will still be out of work.
4) UGH! How pathetic am I for posting to a website at 9:30 in the morning on a weekday. No more posting until the day is over, there must be something better I can do with my time.

[fitgrl]

If the tv/movie industry doesn't see the writing on the wall from the example of the music industry right in front of them they deserve everything they get.

[elizaW]

And the WGA's endgame? Are they ready to drive more writers into bankruptcy? Are they willingly to stubbornly cling to a position that isn't working in order to save face? Are they planning to continue to blame the AMPTP for everything that goes wrong? Will they ignore the fact that many jobs that have been lost in TV because of this strike won't be coming back because studios have figured out they don't need all those people to get a show on the air? Are they going to intimidate writers to keep them from going fi-core? And are they already re-writing history to cover up the enormous mistake of going into a strike with no exit strategy? Just wondering.

[unionworker2]

'Writers, actors, directors can create their work for anyone...
yes, but then they would have to use their own money to make the product. i do not see any of the above putting their own money in because of the risk, but they want residuals{?}. i want some of that cake and i want to eat it also!!!

[Clinton]

The writers should just move on, they don't need 'management'. Everyone should move on,what do they have to lose? As Elisberg observed, 'Writers, actors, directors can create their work for anyone.'
The death of Hollywood corporations? Boo, hoo, hoo.