United States: Writers continue strike as directors negotiate contract

January 18, 2008

As Hollywood enters its award season, the 12,000 members of the Writers Guild of America (WGA) continue their strike that has shut down the majority of the US film and television industry since November 5. The Directors Guild of America (DGA) has also begun to renegotiate its contract.

Despite the size of the strike, the large media conglomerates that make up the Alliance of Motion Picture and Television Producers (AMPTP) have been resolute in their refusal to meet the demands by the WGA around writers' receipt of residuals (royalties) from online distribution of their work. At present writers receive no residuals for the money generated from online distribution.

The WGA is demanding that writers receive 2.5% of all revenue from online distribution. In response, the AMPTP have offered writers nothing from online streaming and 0.3% for downloads, claiming that they make no money from internet distribution. This claim can be attributed to creative accounting, as according to United Hollywood blog, media conglomerates have told shareholders that they expect to generate in the next two years US$1 billion from downloads and $2 billion from streaming.

The determination of the WGA to win a share of residuals for internet transmission is based on writers experience of the bargaining in the 1980s over residuals from home video. The WGA accepted a low percentage only to see the market explode to the point where DVD sales are worth more than the combined revenue from the box office, TV syndication and international broadcasting rights. Peter Grosz, a writer for The Colbert Report, told Labor Notes in November that "we learned the lesson on DVDs. Producers won the battle 20 years … but we want to win the war."

Wider significance

While the immediate consequence of the dispute is the income of writers, any gains made will flow on to all workers in the film and television industry. This is of particular importance for film crews, who are not entitled to an individual share of residuals, but whose collective share helps to fund health and other benefits. As a result it is expected that for each cent that writers win as a residual, the companies will pay out 12 cents. It is this knowledge that is driving the AMPTP to bargain hard.

Since the strike began WGA members and supporters have been demonstrating their collective strength. This has included staffing picket lines outside studios, and demonstrations including the mass rally of 4000 outside Fox studios on November 9. Members of other unions in the industry have supported the strike.

The Golden Globes award night on January 13 was scaled down to a press conference after plans by writers to picket the event caused high profile actors, such as Cate Blanchet, George Clooney and Johnny Depp, to stay away rather than cross picket lines. Similar actions are being threatened against the Academy Awards scheduled for February.

Employer response

AMPTP have attempted to break the confidence of the striking workers, including by launching a negative PR campaign. The most significant attempt to break the strike has been the attempt to keep new shows being produced in order to maintain revenue.

This has included a large increase in the number of reality TV shows, however the bulk of the flagship late night talk shows returned on January 2. The majority came back without writers, and largely without stars who have refused to be booked on shows until the writers return. This has reduced the shows to booking each others hosts and such quality entertainment as host Conan O'Brien seeing how long he could make his wedding ring spin.

There were two exceptions — Jay Leno and David Letterman.

Leno, a WGA member, breached the terms of the WGA contract by writing his own material. Letterman, on the other hand, returned with writers after reaching his own agreement with the WGA. Letterman had also continued to pay the shows employees, except the writers, throughout the strike.

There is mounting pressure for a settlement to the dispute. There have now been four side contract deals in addition to that with Letterman's Worldwide Pants Company. These allow for the development and re-writing of scripts for the production of new films while other companies and studios wait for the strike to be settled. These side arrangements will be superseded by any new contact between the WGA and the AMPTP.

Directors' contract

The contract negotiations between the DGA and the AMPTP is seen by media pundits as a significant element in the strike. A quick settlement without an online residuals deal is seen as a potential way in which the position of the WGA could be undermined. The DGA is not seen as being as militant as the WGA, and also residuals are not seen as important to directors.

This is because many of the big name directors sign contracts where the up-front payments are so large residuals are insignificant. These directors are thought to be willing to pass up residuals in favour of larger up-front fee payments, an option the AMPTP would prefer as it would not have the same flow on effect as residual payments. In addition, assistant directors, who make up 40% of the DGA's membership, have no entitlement to residuals.

While the outcome of DGA contract negotiations will impact on the writers confidence, Grosz told Labor Notes: "This strike is for the future. The internet is too big, too important to buckle on this. What we are asking for is so simple and so fair. If they get paid, we get paid."

[For more information on the strike visit http://www.unitedhollywood.blogspot.com>, and the WGA's website at ]

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