A Special Message from the WGA

Hey, everyone–

David Young, Executive Director of the Writers Guild West, just sent this email to members.  It’s got some great updates and information on what’s happened in the months since last year’s writers strike… thought you’d find it interesting and informative (also, it copies and pastes funny, so my apologies for the weird layout…

  February 27, 2009    
 
 
  Dear WGAW Member:

One
year ago this week an overwhelming majority of the WGA membership voted
in favor of ratifying a new three-year contract. Today there is a
concerted effort underway by the AMPTP and some in the press to
minimize the success of our strike, calling it “unnecessary” and
“self-destructive.” I’d like to set the record straight.

Our current contract was the result of a months-long effort to
negotiate in good faith with the companies, who unfortunately forced us
into a 100-day strike. The struggle was marked by a high degree of
unity among writers — television and screen, broadcast and cable,
blockbusters and indie film. Thousands of you marched, picketed and
blogged, and won the solidarity and support of union members, fans and
the general public, in the US and around the world.

We didn’t achieve everything we wanted – we never do – but we achieved
our most important objectives, something we hadn’t done for decades.
Over the past 20-plus years the companies have tried to use every
important development in the industry
be it distribution technology or reuse method
to weaken our strategic and financial position. A difficult strike in
1985 led to a rollback on home video. This has never been corrected and
has cost writers about $1.5 billion in lost residual income. We could
not get global jurisdiction of scripted programming on basic cable, and
to this day we are still fighting with the companies to cover many
cable shows. Genres like reality and animation, where the WGA lacks
coverage, have grown into a large portion of the worldwide market and
are now significant areas of non-Guild production.

This difficult history has tended to diminish the power of writers,
both economically and creatively, as control of the industry has
concentrated in the hands of a few AMPTP companies who bargain hard and
bargain together. And the other Hollywood guilds and unions have
suffered the same fate.

All this set the stage for our negotiations in 2007. After 20 years of
being told, misleadingly, that the studios would give us our fair share
once any new market developed, writers decided to take a stand for what
they deserved. While the studios demanded that we choose between a
meaningless “study” of New Media or the gutting of our livelihoods
through profit-based residuals, our Negotiating Committee stuck to
three fundamental goals:

  • Jurisdiction over original New Media production
  • Good residuals for reuse of traditional TV and film product on the Internet: “If they get paid, we get paid”
  • Access to New Media contracts as well as language requiring fair market value for related party transactions

In
the end, we got all three. Below is a comparison of the AMPTP positions
on key issues on two dates: the day we struck and the day we made the
deal. Keep in mind that when the AMPTP broke off negotiations with us
on December 7th they had made virtually no changes to their November
4th offer. There is no doubt the AMPTP knew the importance of these
issues, and they incurred real pain in a fruitless attempt to apply
their formulas of the past 20 years to new media.

Key Contract Terms Before and After the Strike

                        November 4 AMPTP offer
February 9 final deal
Internet ad-supported streaming – in the first year of the life of a television program Free for 6 weeks; 1.2% of producer’s gross thereafter (equal to 0.24% of distributor’s gross) Free for 17 or 24
days; 3% of applicable minimum; switches for network prime time in the
third year of the contract to 2% of distributor’s gross
Internet ad-supported streaming – after the first year of the life of a program 1.2% of producer’s gross
2.0% of distributor’s gross
Internet ad-supported streaming feature films No residual offered = zero 1.2% of distributor’s gross
Electronic Sell-Through (Download to Own) DVD rates (0.3% and 0.36% of distributor’s gross)
0.65% and 0.7% of
distributor’s gross (though the companies are now reneging on covering
library product with these negotiated rates)
Internet Download Rentals 1.2% of distributor’s gross 1.2% of distributor’s gross
Fair Market Value test
Same as 2001 contract Enhanced test for related-party transactions
Inspection of New Media Deals and Activity reports None Rights for quarterly inspections of unredacted company records
Promotional use in new media Free, however they define it, including ad-supported streaming of complete programs Clips only are free and only with clearly promotional purpose
Made-for-New-Media Jurisdiction over
dramatic forms only if derived from MBA-covered scripted programs;
excludes original, comedy-variety, serials, etc.
Jurisdiction over
all New Media programs; terms and conditions applied to all but the
lowest-budgeted productions, only when done by non-professional writers
Creator’s rights (“Separated” Rights) None TV Separated Rights adapted to New Media

      

    

As the companies begin producing original product for the Internet,
they must provide coverage for WGA members or non-members who are
working on projects with significant budgets. If made-for New Media
replaces old media or the companies try to use it as a “pilot sandbox,”
it’s covered.

The victory of jurisdiction over New Media was hard fought because the
companies had hoped to keep that production non-Guild. While original
New Media content is still in the early stages of development, the
establishment of WGA jurisdiction is essential. The most important
battles in American labor history, including the famous GM sit-down
strike of 1937, were over this issue: jurisdiction. We won this battle.

On reuse, the residuals formulas we negotiated will allow writers to
benefit in the expansion of new media as a secondary market for
television and feature films. Our agreement allows the companies to
experiment with different forms of content delivery, but not at the
expense of writers.

We also won the right to inspect the New Media deals the companies are
making, including distribution statements and usage data. Transactions
between related companies must meet the fair market value standard of
reasonableness. These are important tools for the enforcement of our
agreement and for understanding the companies’ evolving business
models. This is a significant inroad into the companies’ self-dealing,
ever.

Now, does this mean that the strike created huge, immediate gains for
writers? Of course not. We knew and the companies knew we were fighting
for the future, for the day when the Internet replaces TV and dominates
media consumption. Writers fought to avoid a repetition of recent
history wherein we are told to wait to get our share until the new
business model develops, then that share never comes. Everything we’ve
seen since, be it Joss Whedon’s online hit Dr. Horrible’s Sing-Along Blog,
the decision by CBS to purchase CNET for 1.8 billion dollars, or
Fox/NBC’s hulu.com, tells us that we were right and that the companies
know it.

Furthermore, we improved the DGA deal in significant ways:

  • The
    DGA won EST at 0.65 and 0.7% only for movies and TV first released in
    2008. The WGA won EST at 0.65% and 0.7% for our entire library of
    product – although the companies are trying to renege on this, forcing
    us to seek arbitration.
  • The
    DGA won only a small raise in the third year of streaming. The WGA, for
    the first time ever, won a formula by which the writer will be paid 2%
    of Distributors Gross in the third year of streaming.
  • The
    DGA sunsetted all New Media provisions in their contract. WGA accepted
    no such sunset clause – we don’t want to start from zero in these hard
    fought areas when we go back to the bargaining table in 2011.
  • In the final two days of negotiations WGA won protection of our separated rights in New Media.


In early 2007 WGAW President Patric Verrone and I sat down with Ron Moore, developer of Battlestar Galactica, who told us that this negotiation was simple. He wrote:

In
my opinion, nothing is as important as the issues surrounding digital
delivery of content.  Nothing.  In the not so distant future, literally
every piece of work ever done by the Guild will be available
digitally.  The systems and methods of delivery will vary and change,
but the central truth is that all our work is going to be converted to
ones and zeroes and sent to the consumer.  We have to have a very
clear, very solid method of tracking and being compensated for any and
all work that is delivered in this way, whether it was originally
created for TV or film or directly for digital distribution.  To me, it
is a strike issue.

He
was right. These were strike issues. Whatever their differences, our
members knew he was right. We struck over these issues and won.

There is important work left to be done in future negotiations. There
are windows to be closed in streaming, and budget thresholds for
jurisdiction in original New Media to be eliminated. Nor can we just
sit back and watch the checks roll in. The companies have been
incredibly slow in reporting and paying on New Media, and we are
already filing claims and taking other steps to enforce our agreement.

2008 was a tough year for everybody. The strike meant a quarter of lost
earnings, and then the economy went into a severe recession followed
quickly by a collapse in the financial markets. These events have
caused hardship and loss of income for many people, and writers are no
exception. But these difficulties don’t change the fact that writers
together achieved gains that will stand the test of time. 

Next time we very much hope there will be no need to strike. We believe
we’ve earned a large measure of new respect from the companies and that
next time both sides can bargain successfully without a strike. We will
reach out to industry leaders and company CEOs and make every effort to
reach a fair and reasonable agreement. But make no mistake: should the
companies choose to test us, we’ll be prepared, again. Unfortunately –
and responsibility for this sits squarely on the shoulders of the
companies

it seems every important advance made by entertainment unions,
including pension and health, credits, residuals and jurisdiction over
New Media, has required a strike by either the WGA or SAG. We salute
SAG’s current effort to resist the AMPTP pushing their expiration date
back to June of 2012. The AMPTP is determined to continue their
time-tested strategy of “divide and conquer”. We are determined to end
that practice by building the unity of the entertainment unions on the
basis of our common interests. We are doing everything we possibly can
to hasten the day when, like the companies, multiple entertainment
unions can sit down and bargain as one. 

Finally, I would like to thank all our members and all those friends
and members of other unions who stood in solidarity with us. They
helped give us the strength to persevere through the months of
sacrifice and struggle. It was a historic event, one that will not be
soon forgotten, and we can all feel proud of our great effort and
achievement.

David Young
WGAW Executive Director

 
 
 

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