Some Answers: Real Numbers, and what Really Happened in the Negotiations

Ok, so we've finally got some answers from our sources. We'll have more as the day goes on, but here's the beginning of it:

Why aren't the writers still in the room negotiating? Why are we waiting until Tuesday to continue?

When they presented their proposal, the companies said it was incomplete. The Negotiation Committee still hasn't received the rest of the proposal, and they're waiting on the AMPTP to actually bring it. However, it's kinda hard to get excited about anything they may be bringing to the table, given the unimpressive track record they have so far.

But also, what the congloms are proposing is a new paradigm in these negotiations -- a flat fee for use on internet. As a WGA member, it sounds crazy to me -- I feel like percentage of revenue is a much more sensible model, and one that can accomodate all the fluctuations of this "new" media/internet that seem to have the corporations in such a tizzy. But it's fair (I guess; frankly "fair" isn't the mood I'm in) to examine this idea and its ramifications closely.

The corporations say they're offering us $130 million. Is that true?

Weirdly, no one knows if that figure has any relation to reality. Apparently the AMPTP haven't felt the urge to share where that number comes from. They didn't present it to the NegComm in the room -- the first time anyone saw it was in the AMPTP press release when they (unilaterally) broke the media blackout.

Since they claim that the internet just isn't going to make any money, and supposedly that number has some relationship to the internet money they're offering, it's... baffling.

We're trying to get an answer on that one. But frankly, it looks like that number, like the cheerfully 1950's-flavored wording of their PR release to the world, is spin, not substance.


As well as not yet revealing where that figure comes from, the conglomerates are also refusing to say how many years it covers.

In other words, that $130 million could be paid to writers over 1 year -- or 3 years -- or 5 -- or 20. Or, as one NegCom member pointed out, the most likely number: "infinity."

Which could, for example, mean 10 bucks a year.

How about the rollbacks?

This is where things get really frustrating. We all know that television is headed toward internet delivery, and movies too; close to a third of television series are already rerunning primarily via streaming and downloads, instead of on tv.

Shows like LOST, for example -- this year it will supposedly be shown without a singe rerun. The only reruns would be on the internet via streaming and downloads. That means that a writer, who would normally get anywhere from $3,000 residual for a WGA-covered cable show to $20,000 residual for a huge network hit, would get $250 dollars instead when it was shown on the internet -- and that would cover reruns for a whole year, no matter how many times it was seen. If that same episode was downloaded from iTunes for $1.99, the writer would receive about .6 cents. As in, slightly more than half a penny.

That's why it's a rollback. It about the future, yes -- but it's also about right now.

And of course, we shouldn't leave out "promotional use" -- which, as usual, means if they decide something is promotional, they don't have to pay anything. Ever. And by "promotional" they mean, well, whatever they want.
And that includes entire movies, entire television episodes, regardless of how much money the AMPTP receives for them. And they can unilaterally declare anything promotional.

Want to guess how much stuff they'll designate as promotional? Cause I'm thinking... everything.


John Aboud said...

Gah! Through some Blogger weirdness, this post was originally published with my byline. But I did not write it. Don't want credit for other's hard work.

In republishing it under the "UH" byline, I lost all the comments, but I've cut and pasted them here. My apologies for the confusion.

-John Aboud


Mental Produce said...

Viva la revoluciĆ³n! No great thing has ever been realized except throught the written word....the producers know that, don't let them fool you.
November 30, 2007 3:05 PM


the latest of bloomers said...

If they wanna play it that way, fine.
I say we all raise our quotes 500%. That way we make our money up front and won't have to worry about them killing our residuals.
November 30, 2007 3:08 PM


stee said...

In these dark days of hitting refresh and returning over and over to the same bookmarks desperate for information, you continue to offer great analysis and explanations, John et al. Kudos.
November 30, 2007 3:09 PM


Ang Li Cru said...

The proposal may suck.

But it is not a rollback.

Reruns on broadcast are worth far more to the conglomerates than reruns on the internet.

It follows that residuals for the internet should be less than residuals for broadcast.

$250 is crazy low. It's a crap first offer. But it's not a rollback. A rollback would be $250 for a rerun on NBC.
November 30, 2007 3:12 PM


Jake Hollywood said...

In listening to Nikki Finke today on United Hollywood Live! some insight might be gleaned from her comments about the AMPTP's ideas on "negotiations."

It seems the AMPTP plan is simple really: keep presenting the same offer until the WGA counters (how's that for irony?) with an acceptable low-ball number of their own.

Well, it's a plan anyway, right?

I have a plan of my own: Every time the AMPTP offers essentially the "same" plan the WGA should double theirs. They offer, the WGA doubles. Keep that up until the AMPTP comes to its collective senses and negotiates in good faith.
November 30, 2007 3:13 PM


Andy said...

While I'm not thrilled with the AMPTP's offer, I think the word rollback is being used misleadingly. They're offering lame residuals on-line, and that's the future, etc., but calling it a rollback implies the loss of something we currently have (network residuals, for instance) and that's not the case. Since we have no on-line residuals, we shouldn't call their offer of small residuals a rollback. It just confuses the issue and makes us angry, which helps nothing. They're taking steps, albeit small ones, in the right direction. Let's focus on making those steps bigger!
November 30, 2007 3:14 PM

The One True b!X said...

Calling it a rollback is perfectly reasonable usage of the word, and this post explains why.

If there were no streaming/download media in the world, and the next 20 years were still just broadcast, changing the formula to $250 would be a substantial rollback.

Since an increasing amount of re-usage will be via streaming/download in addition to -- or in place of -- broadcast, "rollback" applies.

Think of it this way: Forget the medium in question, and just think of "residuals for re-use". Right now, the main medium for re-use provides $3,000 to $20,000 in residuals. In the future, the main medium for re-use (under the AMPTP proposal) would provide $250.

So, re-contextualizing the issue as "residuals for re-use" makes it clear: This is a rollback.

Anonymous said...

I'm told by someone involved in the negotiations that it's a misconception that the AMPTP's proposed $250 flat fee applies to television episodes that are streamed online. It applies to original made-for-web content. The offer on the table for residuals for streamed TV shows is still a free window (around six weeks) and then a revenue percentage (around 1%). The email the WGA sent out was, apparently, misleading on this point.

bill said...

The WGA leadership had better not lower our offer. Just keep repeating it until they realize we are serious.

Residuals are deferred payment. Don't let the AMPTP try to re-define them as a bonus, as they are currently attempting. We take less money up front because we expect the rest of our payment to arrive when our work is reused.

Residuals for re-use is deferred payment.

Abc's are easy said...

I have a question. Is a producer the equivalent of a supervisor at a job who gets paid to watch everyone else work? I have never worked on a movie so I was just curious.

bill said...

Ang Li Cru,

Hey! The reason it's a rollback is because many shows which generate the ratings that allow the networks to make billions are now going to be shown on the internet (for which the writer will be paid $250) INSTEAD of on the networks (for which a writer currently earns between $3000 and $20,000).

Heroes will now be streamed the next day over Netflix. (See yesterday's Variety headline in the Technology section.) LOST will not rerun on broadcast TV, instead it will only be sold over the Internet and DVD. Television writers make 80% of their income from broadcast residuals. The problem is that the networks are replacing broadcast reruns with Internet re-runs.

Also, if a movie, is re-run by streaming it to your TV, the writer makes residual money. But under the AMPTP's proposal, if a movie is streamed over the Internet, that writer would make $0 dollars. Zero.

That's a huge problem.

But the bigger problem is that very soon we will be getting all our programming over the Internet. The Apple TV just attaches to our televisions and allows us to watch through our TV anything that is on the Internet.

In countries like Germany, most TV is already delivered via Internet devices, rather than traditional broadcast.

So the problem becomes - if everything is going to be delivered via digital streaming (and it is!)- our pay will be reduced in a jaw-dropping manner.

Hope that helps.

Anonymous said...

"I have a question. Is a producer the equivalent of a supervisor at a job who gets paid to watch everyone else work? I have never worked on a movie so I was just curious."

The producers are the guys that put up the money for the production.

Anonymous said...

I have a question...

What are the current revenues on internet re-runs vs. tv re-runs? That is what should determine the amount of pay for writers and anyone else that receives residuals. Any payment should be a percentage of income, don't you think, regardless of the medium?

Skyfleur said...

anon 4.32pm : internet revenues right now : Zilch on streaming on network websites as they call it "promotional" despite the adverts.
If you download from itunes, amazon, netflix etc : the formula is the same as for DVD 0.3% up to a million in revenues, then 0.36% above that mark.

If you read the blog made by a John Jabaley, a Teasmster member, he explains what the AMPTP is proposing versus what the writers get on tv re-runs. It's a tenth of an eigth.

I hope this helps.

Ang Li Cru said...

So what is the amount that the Writers are looking for from streaming media? $20,000? Does ABC even make $20,000 from streaming an episode of Lost?

I don't think any reasonable person is really expecting a $20,000 residual for internet streaming. Maybe I'm wrong.

But if you agree that $20,000 for internet residuals is too high, then wouldn't even your own proposal (which I haven't heard yet) be considered a rollback by your definition?

Anonymous said...

Has anyone discussed doubling Guild minimums for scripts so we can get our money upfront?

Dave said...

This is a great contract offer. No really. It proves that the strike is working.

Why? Because this offer is the best thing the Alliance could come up with when they have no writers working for them.

This offer, by all accounts, is almost identical to the pre-strike offer. The strike has reduced them to reusing old scripts at the bargaining table!


Keep fighting and Don't Write Until It's Right,

Dave Lane
TWU Local 203
"In Solidarity"

Anonymous said...

Ang Li Cru: No, nobody is expecting a $20,000 residual payment for streaming. But if streaming residuals are calculated as a percentage of the license fee or ad revenue for the episode (the WGA is arguing for the later, but I think the former is worth considering as well), then as the online business grows, so will the residual, and by the time the $20,000 epsodic rerun residuals are extinct, then streaming will be bringing in some sort of decent substitute. It may well be less than $20,000 (depending on the negotiated percentage), but it'll be a fair rate. Which an anemic flat fee isn't.

Ang Li Cru said...

How about a structure where you combine broadcast reruns and internet streaming, then?

Broadcast rerun stays at $20,000.

Internet streaming is a fixed amount - to start with.

Then you build in escalators which start to combine the two, with guarantees.

ie, Three years from now, the combined residual for broadcast rerun and internet streaming shall be no less than $25,000 if the episode is either streamed or rebroadcast.

If the Producers really can milk revenue out of the internet which replaces rerun revenue, then you all share. If not, then the Writers still keep their broadcast revenue -- you're protected against future technology while also not losing out the existing revenue.

Anonymous said...

250.00 per 10,000 views?

Caitlin said...

Okay. Okay, good. Thank you. I'm not taking back any of what I said in my last comment/rant in the last post, though, except maybe wondering why you're waiting until Tuesday to go back. You're writers. You're great and putting words on the page. You can just say you'll come back, you need to come back hard and soon. Fight like you mean it. The harder you do, the sooner AMPTP will get their heads out of their asses. But this at least restores some of my faith. Thanks again and great analysis.

BTL Guy said...

This is the blogger formerly known as Ang Li Cru. I've changed my nom de blog for personal reasons.

I'm not sure how or if my previous posts will update, so I wanted to clearly state this change, and that it was not done to change my positions or mislead anyone.

-BTL Guy
formerly Ang Li Cru

Klaatu said...

Here's why the $130 million is bullshit.

TV has been around for let's say 60 years. Let's say 5 networks existed each year on average (this takes into account all the years there were three networks and the years there have been cable with limited scripted programming. It's generous.)

Let's say each year, each netowrk prodcued 50 shows (it's way less) and 25 episodes of each show (it's also less).

So, being generous, there have been 375,000 scripted episodes of TV produced in the U.S. since the medium was invented. (60 x 5 x 50 x 25)

Now let's say that is 50-50 one hour and two hour programming. That's 187,500 of each.

Now assuming they put every episode ever written online -- all 375,000 of them -- and stream them. Then pay each writer the amount offered ($250 for an hour; $139 for a half hour). Let's assume they're feeling extra generous and even pay the writers of material written before residuals existed.

That works out to a grand total of $72,937,500. That's the most their proposal could possibly worth using even the most extreme and generous calculation. Just over half the amount they say they are offering.

Anonymous said...

I just love the concept of the "free window" the Producers are suggesting? Are they proposing the offering of ad-free content during this "free window"? I didn't think so.

chrisjoy said...

Caitlin said:
>>I'm not taking back any of what I said in my last comment/rant in the last post, though, except maybe wondering why you're waiting until Tuesday to go back.<<

The WGA negotiating comm. didn't ask for the 4-day break. They were given incomplete proposals from the studios who stated they needed more time to complete the rest.

laid off casualty whom you do not care for said...

I hate you, you greedy bastards!

CLH said...

Speaking of promotional items, ahem, how about you guys go ahead & produce t-shirts & caps for civilians like me (berkeley resident, freelance editor, publishing). I know plenty of folks who find the context for this strike abhorrent & believe in your rights to equitable pay for your work product. We also find the AMTMP's campaign tricks pretty damn haunting and familiar, which is no surprise, considering the players. We've been forwarding links, videos, and phone numbers. Help us walk the streets of our towns wearing & showing our support for this strike. Nice for other union members around the country, too, to show solidarity. Time we start cross-pollinating, for numbers, if nothing else.

Mad as hell said...

I have a question. When you write a script and are paid for it do you still get paid if the show is cancelled after one episode as in Viva Laughlin. Or do you give back the money the producers paid you for the cancelled shows. If not then the producers are out all the money for the cancelled shows not shown on TV and it would be unlikely that anyone would buy a DVD of Viva laughlin. The same goes for the 100 million dollar box office bombs that cost more to produce than bring in. Do the writers give back the money that the studios lost on those deals. It seems the writers want the money no matter how good or bad the material is and will take no criticism of their positions as justified. The greedy corporations are out to get them and steal their money. Well then I suggest the writers want the money then thaey should write, produce, and direct their own material thus they would own it all and have the rights tl the money. Of course they would have to pay for all the production costs that the writers appear to believe does not exist except for their piece of the pie.

not scared writer said...

The raise the expectations and then lower them is such first grade bullshit. We're not falling for it.

Want us to fall for something - how about a good deal so you don't kill your ad-rev business model by setting fire to your 2008 upfronts.

Guess what? I can walk all damn day

Shorty said...

Here's a thought, WGA'ers:
Surely you all are aware how low the AMPTP can sink. But did you know that they've told their media relations assistants to go onto comment pages and boards (like nikki finke's) and post pretending to be angry writers and fans to mess with our minds and think we're fracturing??
So why don't we shill just like the AMPTP does? We've got some time on our hands and I know I've been itching to do some writing. Let's go to Cnn.com, MSNBC.com, yahoo, aol, etc and set these assclowns (and the public) straight! I mean, if the AMPTP's assistants and "media relations" can do it (and they barely can- have you SEEN their "writing"?) so can we.
Currently these sites are only telling the stories fed to them by their owners, the AMPTP. Well, it's time we invade with the truth. A novel idea. Let's use our freedom of speech. If AMPTP's goons want to play dirty, game on, bitches.

Anonymous said...

Instead of waiting for them to draft a decent proposal why don't we do it instead? After all we are the writers.

We should sit down, address each and every issue, make a list of the problems that need solving and come up with clear solutions. For once we must not be affraid to ask for what we deserve.

And if we want to get half of what we deserve we must ask for a whole lot more.

We've to make them realize that unless we work they don't have a job either.

We must push not only for money but for creative control too.

Enough with the crap they force us to write because "that's what the advertiser wants " or "that's what the audience wants".

what audience? you mean the ones who closed their TV sets for good?

Cause that's the biggest audience!

Wake up people, know your rights, and if you suddenly realized you don't have any, now's your chance to get plenty.

Anonymous said...

amen, Anonymous 5:10!
If only there was a way to get rid of 3/4's of these pointless studio execs now too!

A business woman who used to watch tv and movies said...

If promotional things are free how does Madison Avenue make it's money writing promotions? How do the makers of the promotional pens, notepads, and such make their living? I mean if promotional means you don't pay those who make it or think of it how do these businesses make it a business? Oh wait, they do pay PR firms, ad agencies, pen makers and printers, etc for these promotional items - why are writers any different?

Just some thoughts I had as a marketing/business person. Back when I got my degree (wayyyy back in the early 80's) it was no question that one of the expenses you allowed in your business budget was for promotional material. Too bad the AMPTP has't gotten that lesson, maybe then need to go back to undergrad business courses to remember

Paul said...

Okay. I love TV. When I heard about this strike, the first thing I thought of is, CRAP, it's going to be Moonlighting all over again. See it was my favorite show, and despite the fact that it had jumped the shark, the writer's strike really killed it.

As a Heroes watcher, I am concerned about this again.

With that said, I still am with you and say fight for your rights. I think it's garbage what they are offering to you, and their use of "promotional" is just garbage!

I agree that the internet streaming should be a percentage of revenue.

I mean unless someone is paying to download it (a la itunes), it could never be a per download pay as any writer could setup a computer to constantly route to a page and start viewing an episode, over and over again. Again that would depend upon how the advertising is paid. If advertising is per episode, payment should be based upon percentage. If revenue is based on per download, so should payment.

I mean do they really believe that Nissan wouldn't pay more money to advertise for Heroes on the net? Give me a break!