© New York Times, October 12, 2007
© New York Times, October 12, 2007
By Michael Cieply
LOS ANGELES, Oct. 12 - A funny thing happened when Hollywood’s writers and producers sat down a few months ago to begin negotiating about the future: They wound up fighting about the past.
And an entertainment industry that was supposed to be fretting over next-wave technology finds itself on the verge of a shutdown over issues that have mostly been off the bargaining table since home video came on clunky cassettes and the movie mogul Lew Wasserman was brokering labor deals.
A mail-in strike authorization vote is set to conclude on Thursday. Some 12,000 members of the Writers Guild of America East and the Writers Guild of America West are widely expected to give their leaders authority to call a strike at any time after the Oct. 31 expiration of their contract with the Alliance of Motion Picture and Television Producers.
Meanwhile, both sides — with back-channel help from lawyers, agents and other players who want to keep Hollywood working — are struggling to reboot a bargaining dynamic gone awry.
“The producers’ playbook has been ‘Let’s scare the bejesus out of everyone,’” said Peter Dekom, a lawyer with the Hollywood firm Weissmann Wolff Bergman Coleman Grodin & Evall. The writers, Mr. Dekom added, have already effectively gotten themselves locked out by one of their bargaining tactics. As the unions sent a message to the studios and networks that any script due beginning in November would probably not be delivered in advance of a strike, the studios stopped making new assignments.
What began as a dispute over compensation for future use of programming on the Internet, over cellphones or in media yet to be invented has unexpectedly turned into a brawl over a decades-old residuals system. That formula pays writers and others when movies and television shows are sold on DVD or on cable television.
In July producers offered writers a choice: Delay their request to set compensation for new media pending a study of the market, or accept a radical change in the residuals system that would permit additional payments only after a company had recouped the cost of a movie or television show.
Writers angrily rejected both options, while demanding that companies double the base on which they pay home video residuals, from 20 to 40 percent of the studios’ and networks’ actual revenue from sales.
Producers recoiled at what they saw as newly militant guild leaders trying to undo an arrangement — basing residuals on only a fraction of actual home video revenue — that writers and others in Hollywood had resented from the moment they agreed to it in the early 1980s.
Looking backward, many union members concluded that they simply should have fought harder for a bigger share of what was then a new market, and resolved never to let it happen again.
In recent years at the powerful Writers Guild of America West, an aggressive slate of fresh leaders headed by the union’s president, Patric Verrone, ousted an executive director who had been regarded as too sympathetic to the companies, installed new managers with labor union backgrounds and resolved to re- establish what they saw as their guild’s eroding power. All of this has contributed a tone of personal animosity to exchanges between the sides in the current bargaining.
But even highly compensated writers who might have more to lose than gain from a strike have been galvanized by what they viewed as an attack on a sacred principle: the right to residuals. The proposal was seen as doubly insulting because of the notion that studio accounting could be trusted to tell when costs had truly been recovered. (To allay suspicion, producers offered to let an independent auditor keep an eye on the books.)
“I’m booked morning to night, that’s how freaked out everyone is,” said Dennis Palumbo, a screenwriter turned psychotherapist whose practice serves a number of Hollywood writers. Among working writers, Mr. Palumbo said, the prevalent feeling is that “if residuals are not off the table, we should strike.”
Linda Lichter — whose firm, Lichter, Grossman, Nichols & Adler, has many writers among its clients — said, “The companies are big multinational corporations, and all of them are pushing back at talent as much as possible.” At the same time, she said, “You have rage on the part of writers and other guilds about how they got taken on DVDs in the past.”
Some observers now contend that company representatives acted from a mistaken belief that threatening the residuals system would chase writers back to what studios and networks really wanted: a delay in setting pay schedules for the rapidly changing world of new media.
“The studios used brinkmanship too early,” said Bruce Feirstein, a screenwriter who has written about Hollywood for The New York Observer. Faced with a long-term decline in studio script development, he added, even the guild’s less aggressive writers had come to see residuals as “a way to send kids to school between projects,” and not fair game in a negotiation.
For producers, of course, a next move might be to withdraw their residuals plan, possibly in return for a private assurance that writers would respond with a similar movement, and perhaps in time to undercut the strike authorization vote.
A spokesman for the producers declined to discuss possible tactics. Neal Sacharow, director of communications for the Writers Guild of America West, said in a statement, “If the companies were to take their rollbacks off the table, it would be a signal that they were prepared to engage in serious negotiations.”
That would leave only the problem of figuring out where entertainment industry unions fit in the digital future.
The path to a solution might well lead back to a study group, if the sides could find a mechanism to establish trust, for instance by positing that any new pay mechanism would be retroactive to the beginning of the contract being negotiated.
But ultimately, determining the real value of new electronic distribution systems may not be any easier.
Speaking at a Hollywood panel discussion this week, Michael Rogers, a consultant who has served as The New York Times’s futurist in residence, reckoned that the remaining task would be no harder than pinning “jelly to the wall.”