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The WGA Digs In

As the threat of a strike looms, writers rally to show entertainment companies a new reality 9/23/2006 08:55:00 AM Eastern

Greeted by the sounds of Twisted Sister’s defiant anthem “We’re Not Gonna Take It,” more than 400 writers rallied in a Los Angeles park Sept. 20 at the behest of the Writers Guild of America, West (WGAw) in a show of unity.

With signs and red T-shirts emblazoned with the motto “United We Stand,” guild members, led by such speakers as Desperate Housewives’ creator/showrunner Marc Cherry, vowed solidarity with a dozen striking scribes of The CW’s America’s Next Top Model. The writers, who call themselves “reality storytellers,” have been on strike for two months now, demanding union representation.

After the rally, the union members marched down Beverly Boulevard in the warm sun toward CBS, a co-owner of Top Model’s new network launching that night, to chant some more.

The rally portends a major contract battle between a strident writers union and a defiant entertainment industry, which many fear could lead to a potentially devastating strike by the end of next season. The disagreements focus on, among other things, compensation and benefits for reality-show writers, which the guild has been seeking to organize, and the demand that members receive a percentage of new digital downloads.

Another flash point: The WGA wants a piece of the lucrative product-integration market for its members, on the theory that, since they write the advertisers’ products into shows, they should be among those who benefit. The industry, struggling in a relatively flat ad market, insists it needs that revenue to keep producing high-quality entertainment.

Both sides are digging in, with the joint master bargaining agreement for the West and East Coast branches of the WGA set to expire Oct. 31, 2007. In response to the union, the networks and studios argue that they face a growing array of digital and broadband viewing alternatives.

The stakes are high. A work stoppage would be the first since 1988, when a 22-week strike stopped TV production and sent broadcast-network shares plummeting nearly 10%. Disgusted viewers migrated to cable, and networks beefed up reality production, which subsequently meant fewer primetime opportunities for writers. Just the threat of a writers’ strike in 2001 is estimated to have caused more than a $2 billion hit to the Los Angeles economy in travel, lodging and real estate, according to local economists.

Network and studio executives contend that inexpensive reality programming has created more opportunity in the industry, not less, and paying higher union wages and benefits would ruin a good thing for everyone. In success, however, hits like Survivor have commanded license fees in excess of $2 million per episode, on par with scripted dramas.

The union is pushing back hard. Over the past year, guild members invaded industry events and seminars, including one attended by entertainment presidents. Groups of 20 WGA members would burst into the room, shouting, passing out leaflets and jumping on the stage.

After years of contentiousness, the East and West Coast branches of the WGA are working much more closely during the lead-up to negotiations. The Screen Actors Guild (SAG) has maintained a much more supportive stance for the writers than the more reserved Directors Guild of America (DGA), but new WGAw Executive Director David Young refers to them both as allies.

At last week’s rally, WGAw President Patric Verrone, renowned for impeccable dress, yanked off his suit to reveal a red union T-shirt, while Young, a low-key business executive who has raised strike concerns in some quarters, blended into the crowd.

Formerly the 9,000-member guild’s top organizer, Young, who believes that all union members are entitled to their fair share, has spent his entire career in the union-organizing ranks, having previously worked for the Regional Council of Carpenters and the Union of Needle Trades, Industrial and Textile Employees.

He set out last week to prove that the guild is capable of organizing effectively down to the last detail, including having validated parking at the rally.

After Verrone’s slate swept into power in September 2005, winning an overwhelming majority of some 2,000 votes cast, the new president moved to expand organizing efforts to 30% of the guild’s budget.

Eight directors endorsed by Verrone and favoring a more assertive bargaining stance against the industry took seats on the WGAw board last week.

In March, the guild ended its fiscal year in the hole for the first time, off more than $200,000, or less than 1% of its total $24.3 million in revenue and investment income. Verrone approved raising expenditures nearly 14% by the end of the last fiscal year, primarily to cover the rapid expansion of the organizing staff from seven to 17 members. The WGAw has also allocated $11.4 million of its $18.3 million in investment income toward its strike- and welfare-fund reserves.

Young’s fondness for old-fashioned labor-protest tactics has raised the ire of the industry. The first face-to-face meeting between the new WGAw regime and Nick Counter, head of the industry’s Alliance of Motion Picture and Television Producers (AMPTP)—a lunch described by Young as an “ice breaker”—came only after Counter publicly chastised the union about its lack of contact. Young says he has also recently met with other business-affairs executives.

“The thing about all this talk that is so sad and scary is that it is a lot like the [United Auto Workers] and three big automakers,” says an industry executive who requested anonymity. “They were all sitting there fighting over this stuff, and, ultimately, people went and bought cars from Japan and Germany. That crippled the American auto industry, and I have a feeling we are headed in that same direction.”

But WGA executives downplay the doom-and-gloom scenarios, saying they aren’t looking for a work stoppage any more than the companies are.

“The best-case scenario is that we reach a negotiated settlement,” says Young. “Ninety-nine percent of union negotiations are settled without a strike, but on the other hand, we do intend to protect our vital interests. The reason people talk so much about a strike is that they are scared about it. They think they will force us into taking a weak position. We are prepared to negotiate a fair and reasonable position, which includes the ability to compromise and assert strength. But we are not going to disarm, I can tell you that.”

The cost of a work stoppage would be painful for an industry continuing to grapple with erosion from a growing spate of alternative delivery devices. The networks are all experimenting with a variety of digital and broadband initiatives to see which will help replace the money they expect to lose from their valuable DVD businesses. The WGAw says its members are entitled to a percentage of new revenue streams that turn into profitable businesses, but the industry has so far refused to discuss formulas for sharing digital revenue.

Among the Big Four broadcast networks, CBS, the largest, is likely to feel the greatest impact of a prolonged strike, since network sales account for roughly a third of all of CBS Corp.’s revenues. In comparison, ABC’s revenues constitute just 12.3% of parent Disney’s total, Fox 10.4% of News Corp.’s and NBC only 2.6% of General Electric’s.

With the most to lose, some expect CBS chief Leslie Moonves to emerge as the industry point person, filling a void left by late MCA boss Lew Wasserman. CBS declined to comment, but there is belief in some quarters that a strong industry leader could head off a strike.

For now, the entertainment companies are standing strong. NBC Universal recently filed a National Labor Relations Board complaint seeking to require showrunners to work on “promotional” Web episodes of such shows as NBC’s The Office and Sci Fi Channel’s Battlestar Galactica. It contends that, since June, the guild has urged its members against doing that.

Some networks and studios have already held strike-preparation meetings and are considering upping reality production, which would involve even more non-scripted international formats, a hot commodity.

Networks are also discussing banking extra episodes of existing scripted series this season, running TV shows and movies from massive studio program libraries, and importing Canadian scripted dramas and comedies, some of which have performed decently in U.S. syndication. Also, they are also talking about ripping pages out of old strike playbooks by recycling scripts of defunct TV shows, but that would require actors, and, since they may also strike, that is far from a certainty.

Beyond the strike-planning meetings, not much has changed yet in the way the networks are conducting business. Some executives think the WGA isn’t very interested in going mano a mano next year and would rather wait until the broadcast-network upfronts in May 2008 so it can collaborate with SAG and DGA.

Both of those unions will see contracts lapse in June 2008, and a delay would increase the writers’ bargaining clout while providing maximum impact around the heavily hyped 2008-09 fall-schedule announcements.

WGAw’s Young refuses to dismiss that notion outright. “We view ourselves as having common interests with sister guilds that will enable us to have a better working relationship with them,” he says. “We want to negotiate as soon as possible … but I could see us down the road, if things don’t work out, aligning with [fellow unions] more closely than we have in the past.”

That scenario could benefit SAG and the DGA as well. Like WGAw’s Verrone, SAG President Alan Rosenberg, who was elected to a two-year term in September 2004, has been labeled a “militant” for his close support of the writers, despite having reached four industry agreements.

Disputing Young’s contention of “99%” support of the membership, Craig Mazin (writer of the Scary Movie franchise, among others) points to dissent within the ranks. Mazin, who is resigning from the WGAw board, recently attended a meeting in which some members argued that, since reality writers represent only about 5% of the guild’s current roll, time and effort could be better spent on the majority of members. The WGAw has complained about poor conditions for reality writers at some shows and believes the industry should give them better work hours and benefits.

Mazin, one of the leading voices of guild dissent, thinks the union would be smart to study its history: “In 1988, the [WGAw] had nearly 100% jurisdiction and a six-month strike that did not achieve its goals.”

Additional reporting by Ben Grossman.

 

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