The WGA Strike: A View From The Other Side

by Kathryn Durfee
01/21/2008

I return to the subject of the WGA strike once again, because it was brought to my attention shortly after publishing my last article that my work did not go deep enough into the issues at hand or fairly represent both sides of the argument. I offer my deepest apologies, but maintain that my goal was to give a broad overview of the issues rather than bog readers down with nitty-gritty details and percents. Unfortunately, as a student far away from the action on the West coast, it has been difficult to find accurate sources. Much of the press receives funding from the major networks and is therefore skewed. To compound this issue, many writers and producers are unwilling to go on the record with their opinions while negotiations are on-going.

Now, I know that in the past, my articles have had a light tone, but let it be known that this does not mean that I don't take my writing seriously. That being said, I was recently contacted by a writer-producer on a popular primetime television show. He offered me a look at the strike from the writers' point of view. Not only from the guild's point of view, but from the eyes of a working writer who is being financially devastated by the strike. Of course, any source I use will be biased, but I hope the following offers some insight to what real-life writers are actually going through right now. I will keep my source anonymous in gratitude for his willingness to share his story with me.

It is true that one of the earliest issues and sticking points was residuals. The WGA was asking for very little by demanding profit-based residuals. Considering that, according to the WGA, 20-50% of a writer's income comes from residuals, it is certainly not outrageous for them to want profits from their work released and reused on new media platforms. The issue of DVD residuals, however, was in fact removed from the table before the strike even begun. The AMPTP promised the WGA that negotiations would move forward if this was taken down, but this turned out to be a lie. The WGA gave up arguing for what could have amounted to a lot of money, and the AMPTP gave up nothing. The AMPTP maintained that the studios need the profits from these new media platforms to compensate for rising production costs and advertising fees, but what they fail to acknowledge is the fact that the entertainment industry is and has been on the rise.

Before the expiration of the writers' contracts, the WGA announced that despite the number of important issues on the table, the AMPTP has yet to take them seriously. This illustrates the popular view that the AMPTP either wanted the WGA to strike, or simply didn't care one way or the other.

It was on October 19, three days after the DVD and home video residuals issue was removed from the table, that the WGA moved towards a strike. Negotiations paused while the AMPTP came up with a proposal in response to the WGA's concession of home video residuals. On October 26, the WGA Negotiating Committee announced that the guild agreed to several of the AMPTP's proposals and "withdrew or modified a number of our own proposals in order to narrow the areas of dispute." However, the AMPTP rejected the modified proposals. In addition, they demanded that negotiations return to the AMPTP (they had been meeting at the WGA). Out of further stubbornness, the AMPTP refused to meet until just before the expiration of the contract on October 31. On October 30, negotiations began at 10 a.m. The WGA informed the AMPTP that they would have a proposal ready by 7 p.m., but lead negotiators for the AMPTP declared that they would rather go home and discuss it in the morning. This seemingly flippant attitude did nothing to help matters of discussion.

The next morning, the AMPTP stopped negotiations by announcing that they would not return to the bargaining table until the WGA extended the DVD formula to Internet downloads. In the words of my unnamed source, without jurisdiction of new media, a studio can make a show for air on the Internet, but "pay no minimums, no health insurance, no pension, no protections," essentially "running a sweat shop." Another important point to note is that as more and more production moves towards the Internet and no jurisdiction exists, the guild will cease to exist.

It is no surprise, then, that the guild voted in favor of a strike, effective November 5. At this point, the WGA and AMPTP had been in negotiations for three months. Three months! Whereas the WGA dropped nine of their proposals in an effort to move things along and reach a fair agreement, the AMPTP continued to ignore the most important issue: Internet jurisdiction. To quote WGA-West President Patric Verrone, "the studios made it clear that they would rather shut down the town than reach a fair and reasonable deal." According to his November 2 press release, the AMPTP is simply refusing to give its writers fair compensation for their work. The new technology is increasing their profits tremendously, but they still will not share the wealth with their talent, even though, as stated earlier, most writers depend on residual income. Verrone went on to say, "Our position is simple and fair: when a writer's work generates revenue for the companies, that writer deserves to be paid." The working formula for residuals, as I explained in my earlier article, was put in place in 1985, when home videos were introduced to the market. Writers agreed then to receive a very low residual ($0.04 per unit sold) in order to allow the market to grow. Well, that market certainly did grow -- how many DVDs do you have laying around? -- but the residuals never increased.

Even though the WGA removed the DVD proposal from the table, the AMPTP continued to insist that there be no jurisdiction for most of new media writing, that Internet downloads follow the DVD rate, that there be no residual for streaming video of a theatrical product, a "promotional" proposal that would allow the studios to use even complete works as a streaming advertisement with no residual (this means that just by saying that a movie or TV show was used for "promotional purposes," studios could avoid paying residuals), and that there be a "window" of free reuse on the Internet. Their initial window? Forty-five days! How many shows have you watched online 45 days after their release? To spell it out, studios would have all the rights to a show or movie during its period of highest demand, then would maybe throw the Guild a fraction of the revenue later.

The first few days of the strike saw overwhelming support by stars, performers, and the public. On the other side of this weighted coin, the AMPTP published ads in both The New York Times and Los Angeles Times claiming that "the Guild is seeking at least a 700% increase over what writers currently receive, and more than a 200% increase over what they receive for Internet 'pay per view.'" Let's do the math. According to the WGA Statement made in response to these ads, if downloading was given the current rate for DVDs (what the AMPTP demanded), it would amount to a third of a penny. Thus, 700% would translate to 2.1 cents. The WGA isn't asking for much.

Now that I'm getting into the details on the monies, I would like to go back to my unnamed source and discuss the myth of the "rich Hollywood writer." According to the AMPTP, the "average working writer" makes $200,000 a year. However, my correspondence has enlightened me to the harsh reality (that wasn't all so surprising) that "half of the membership earns ZERO in a given year -- while still working for free on material in the hopes it will land another job." That takes care of half, a half obviously far from that phantom $200,000 mark. As for the other half, half of them (25%) make less than $40,000. The other half make up to $100,000. Yes, there are those (about 5%), like in any other profession, earn the big money. Regardless, the AMPTP's figure is terribly misleading.

On November 29, the press blackout that had enveloped the past week's negotiations was lifted, and Verrone released a statement updating the Guild on progress. The AMPTP indeed made proposals, but they amounted to almost nothing. Rather than offering percentages, the studios presented a deal in which they would pay a fixed rate of $250 or less for a year's reuse of an hour-long program, but no residuals for streaming theatrical product. As for downloads, the AMPTP continued to say that by claiming "promotional use," they would be exempt from paying a residual.

On the other side of the table, the WGA presented the AMPTP with an economic outline for their proposals. According to Verrone, "Our entire package would cost this industry $151 million over three years." That's less than the cost of a bad summer blockbuster. This sum would give a 3% increase in writer earnings each year. This isn't much considering that the market projections state the industry's earnings will grow by 10%.

To break it down by company, Sony would pay $1.68 million per year, Disney $6.25 million, Paramount and CBS $4.66 million each, Warner $11.2 million, Fox $6.04 million, and NBC/Universal $7.44 million. MGM would pay just $320,000 and the remaining smaller companies would chip in to make up for the $8.3 million remainder per year (taken from Verrone's November 29 press release). The WGA report an analysis can be read here. The AMPTP offered a proposal that would give the writers $130 million over the next three years, but by looking at the WGA's calculations according to the AMPTPs earlier proposals, the numbers don't add up. In fact, considering the AMPTP's determination to use streaming video for "promotional use," their deal could potentially result in money lost for the writers.

It wasn't until December 5 that the AMPTP seemed to take matters seriously. Though they claimed that they would have a proposal ready by the evening of December 7, the AMPTP still had nothing to offer in terms of Internet jurisdiction. They finally returned to the table with what turned out to be a complete rejection of the WGA's December 3 proposal on Internet streaming. Still stuck on a $250 flat rate and the use of the DVD rate for Internet residuals, the AMPTP allowed no progress to be made.

The following week, the WGA filed charges with the National Labor Relations Board against the AMPTP, citing its unwillingness to bargain and take the WGA seriously. The AMPTP broke off negotiations based on unfair demands, and it was illegal for them to offer an ultimatum that would force the WGA to give in.

It was also announced that the DGA would begin negotiations with the AMPTP in January. However, the WGA reiterated that while they support the DGA, the DGA does not represent the writers. Thus, the strike will not end until the AMPTP makes a fair deal with the WGA.

The AMPTP does not have it out only for the writers, it seems. On December 19, a hearing on the economic impact of the strike on Los Angeles was held at the Los Angeles City Hall. Representatives of the AMPTP were invited but refused to attend.

As it was announced that talk show hosts like Leno, O'Brien, Stewart, and Colbert would return to the air without writing staffs, the WGA reiterated the need for the AMPTP to return to the bargaining table with a fair plan. Getting these hosts back on the air does not ensure quality for the viewers. The only way to give audiences a quality product, the WGA maintained, is a fair deal.

With the AMPTP still refusing to return to negotiating, the WGA looked to make deals with studios one by one. On December 28, an agreement was reached between the WGA and Worldwide Pants, allowing Letterman and Ferguson to go back on air with their writers. What was the agreement? The same proposals that the WGA planned to present to the AMPTP when they walked out of negotiations earlier in the month.

Shortly after the agreement with Worldwide Pants, the WGA reached an interim agreement with The Weinstein Company. A few days later, another deal was struck between the WGA and MRC, an independent film, television, and digital studio. And after that, the WGA and Spyglass Entertainment signed a deal. The speed at which these deals were made illustrates the ease of negotiations when both sides are committed to reaching a fair deal.

With the AMPTP in talks with the DGA, the WGA maintains that they are not represented by this guild and can only settle the strike when the studios return to the table with the writers. The WGA has announced that they will look over the tentative agreement made between the guilds, but will not adopt it unless it is fair for the writers.

As a final note, I hope to clarify what the writers themselves have been going through. From the beginning of the strike, writers were legally obligated to perform "non-writing services" or face getting sued or fired. However, the writers, as a unit, chose not to cross the WGA picket line, and subsequently walked off the job on November 4th. Though some showrunners chose to return to work (not to write, but to carry out post-production tasks), even this group later stated that their choice was a bad one. Check out this statement from Lost showrunner Carlton Cuse.

From the mouth of my source, "in order to be able to sleep at night, I walked off the job and joined the picket." Despite the fact that he is among the lucky few in that top 5%, he was legally required to continue working if and when the Guild struck. His choice was to cross the picket line, or honor the Guild and risk getting sued. So, even though he was earning enough money on a top show to remain immune to whatever deal the WGA settled upon, he identified with the Guild on a personal level. On one side, he says, "there was the WGA, asking for VERY little." On the other was the AMPTP, the greedy corporate giant misrepresenting the issues, lying about proposals, and breaking all the rules.

Where do I stand? When I set out to cover the strike for AE, I hoped to deliver a broad, unbiased outline of the issues. Unfortunately, I no longer believe this exists. Everyone involved has an agenda, right or wrong. I am grateful to my anonymous source for giving me a glimpse into the issues straight from the horse's mouth. If you take nothing else from this article, realize that the members of the WGA are people that have worked very hard to get where they are today. The strike is crushing the WGA members financially, but negotiators remain steadfast and determined to reach a fair deal for its members.

For ongoing coverage, visit the WGA's website.