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Susan Savage Headshot

Shut Down the Town?

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I was having an email exchange yesterday with a dear friend and successful producer who describes herself as "very anti-strike-of course as a middle child and producer, my job has always been mediator."

I'm a middle child myself, and I, too, am a pacifist-mediator at heart. So I told her "trust me when I say, no one likes or wanted a strike that I know of...except maybe one person I know who's an exec at Sony." But he's not a big fan of writers, anyway. A strike is always the last resort.

Anyway, my producer/friend's feeling was that "they should be forced to work it out -- compromise and settle the thing so people can get back to work." I couldn't agree with her more, but I kept wondering who she meant by "they?"

I hated to dash her hopes as I think this could be a long work stoppage, because I believe the studios have wanted this strike for some time now. Case in point, check out yesterday's LA Times' cover story, "Strike About to Cost Jobs," about how the studios are cleaning house of many of their TV production/development deals. "My friend," the executive at Sony I referred to, told me at a dinner party at his house in June that the studios wanted a strike, "if only to get out of many of their development deals, because it's cheaper than paying to get out of some of these expensive arrangements." The employment contract that studios have with talent has a provision (or an escape clause) known as force majeure that allows them in a crisis such as a strike to suspend and terminate deals. So they could potentially shut down a good portion of the town, where an estimated 1.3 million jobs are connected to the film industry, because it's cheaper for them than paying out their expensive production deals? My question is if these deals were so bad, why'd they make them on in the first place?

The WGA and AMPTP have been meeting since July, and the networks/studios (represented by Nick Counter of the AMPTP) have not given an inch on any of the WGA's real demands unless you count a fraction of a centimeter last weekend, days before the announced strike on Monday, Nov. 5th. To the writer's credit, their proposals are the basis of the WGA's negotiations, not the AMPTP's. Contrary to all of the hype in the media....and not to be conspiratorial, but let's face it the WGA doesn't own NBC, GE does, so if the facts aren't exactly trickling down in the fairest or most impartial light towards the writers, do you really have to wonder why?

I was heading out to a picket line when my friend and I began our exchange so I didn't have time to get into all the issues. So I did my best to address one point, specifically about the DVD/download situation. In 1985, the writers made a really bad deal with regards to video cassettes. I know we're talking DVDs now, but it's all relative. Remember 1985? Cable was in its infancy, and everyone watched 13 channels because that's really all there were to watch, and all of those channels were free! Now, I realize this shows a lack of vision on all of our parts (both writers and actors), but as everything was free and plentiful, the idea of paying to watch a video/re-run of your TV old show was not really a concept the WGA and SAG thought would take off, and then of course, movies followed suit. Clearly, we were all naive.

The deal that the writers made in 1985 meant they would get four cents for every video cassette sold. How'd they come up with four cents when the writers were getting two-and-a-half cents (out of every dollar) per airing on network TV? Well, the studios asked the writers to take a pay cut in order to grow this fledgling market. The writers as they were eager to help to expand the home video business agreed to cut their residuals on video sales by 80 percent. They agreed to this with the understanding that once home video was a thriving, profitable market, the studios would then give back what the writers had given up. Hmm...kind of remind you of the cable deal we made in the '80s?

Well, that was 22 years ago, VHS cassettes have long since given way to DVDs, and sales have soared, but the 80 percent pay cut is still in place. A DVD on average costs about $19.99, and in 2007, the writers still only get four cents. Keep in mind there wouldn't even be any DVD' to sell, be it Seinfeld or Shakespeare in Love if not for writers, and they haven't gotten a pay increase in 22 years!? What are they, teachers?

But wait the absurdity doesn't end there...let's talk about the internet, and iTunes and any download service provider that have allowed studios to digitally distribute their products more efficiently than ever (and it's easy to track too!), no manufacturing costs, no shipping costs, no need to warehouse anything (sorry, I still miss Tower Records...records, that says it all!), no physical product what so ever! And the studios want to pay the writers the same rate for these downloads as they pay for DVD residuals? That's right, a whopping four cents....despite this huge cost savings!

And the fun just doesn't stop, websites like that I mentioned yesterday, and I've since learned about Hula's website, well, you can go on to either of them right now, and watch entire episodes of your favorite TV shows for free! (But please, don't log-on until this is all resolved. Thanks!) Even though the studios sell ads on these websites and thus, earn money off of these shows still.....they're estimated to bring in 4.6 billion dollars over the next three years, they are refusing to pay the writers any residuals at all. Now, that's fair negotiating.

And why? How can they possibly get away with this? Well, they claim that it's for promotional purposes only. Promos used to be considered a 15 or 30 second commercial to get the audience "to stay tuned for next week's exciting episode"....not next week's ENTIRE episode! And if studios have their way the 80 percent pay cut will not only apply to downloads, a 100 percent pay cut will apply to streaming video, too! And it's not only writers that are affected, but actors, directors, and anyone who relies on residuals to pay their bills, and to fund their pension and health, we're all affected. And can you imagine what will happen when TV and the internet merge and become one? you think studios will be magnanimous and pay residuals based upon the current established TV rate when they can pay you the bargain basement internet rate? Come on, is that a trick question?

The deal that was made in 1985 meant that the studios would retain more than 80 percent of all gross sales of video cassettes/DVDs, and that's still the way it is! All writers, actors, directors (unless they as "stars" and can negotiate an additional percentage upfront) collectively share the remaining 20 percent and have for 22 years.

Tell me, that's fair negotiating?! I know I explained yesterday about using the word "fair" and how inappropriate of a word it is to use in the corporate world. But maybe the question, we should all ask ourselves, is any of this right? Would you ask a teacher, a bus driver or even your plumber, to live on wages based upon a pay scale established in 1985 in 2007? No, you wouldn't, and besides your plumber would walk, so why would you ask that of writers?

In solidarity and hope... still,

Susan Savage


Screen Actors Guild

National Board member

Read more about the strike on the Huffington Post's writers' strike page.