1/16/2008

The Endgame

The article below was originally printed on the Huffington Post.

WGA Strike Primer: The Endgame

by Robert J. Elisberg

In the beginning was the word - yet the word most heard these days in Hollywood is not about the beginning at all, but the end. What is the "endgame" to stop the strike? Ultimately, that's the only thing that matters. And with the AMPTP corporations negotiating instead with a guild not on strike, there's just one endgame people are most-wondering about -

Are the AMPTP corporations willing to scuttle the 2007 TV season, drop the pilot season, lose the 2008 TV season, wipe their slates of all movies for the next two years and put a nuclear missile-laser on the moon to blackmail the world's governments? (This latter seems far-fetched.)

Certainly, scuttling is possible. Indeed, it would be a powerful endgame strategy that would rock the Writers Guild of America. Only one thing argues against it.

It makes absolutely no sense.

For this Scorched Earth endgame to work, it means - 1) the AMPTP corporations would throw away countless billions in income and ad revenues. 2) TV networks would risk losing their audience to the Internet, Xbox, books, CDs and sex. 3) Movie studios would cut their distribution pipeline to theaters. And 4) the CEOs would forego their $25 million bonuses.

Add one other reason that my friend Mark Evanier notes. 5) The AMPTP would be willing to have writers, actors and even directors on strike at the same time, creating their worst nightmare when all contracts are up for re-negotiation simultaneously in 2011.

All this to avoid paying a tiny percentage of something they say is not worth anything.

It makes no realistic sense. Zero. The Wall Street firm Bear Sterns has said the impact of what the WGA is asking for is "negligible."

Importantly, for this AMPTP endgame to work, actors would end up on strike, directors likely, too, all crews would be out of work, all production staffs, most corporate employees let go, the L.A. economy would be in a shambles and the AMPTP corporations would crash into a heap of dusty plaster and torn gaffer tape.

It would he horrific for everyone. But it would be the death knell for the Hollywood corporations. Remember: for the most part, the AMPTP corporations don't actually make any product, they finance independent contractors. Writers, actors, directors can create their work for anyone. Venture capitalists, Internet companies, European film studios. Empty movie theaters will be desperate for product, whoever distributes it. Stream webseries on New Media. Sell original movies and series direct-to-DVD.

So, it makes no sense for the AMPTP corporations to have this as their endgame. That doesn't mean it won't happen. But - the CEOs understand reality. They know they'll keep making billions with a fair contract. But not with Scorched Earth.

So, that means perhaps there's another possible endgame.

Like: drop scary hints that the AMPTP may Wipe Out All Humanity, which gets some people flibberty-gibberty. Wait to see how solid the WGA support stays. Negotiate instead with the Directors Guild. Make a really mediocre offer and get them to cave early like they always do. And then hope writers and actors will break into dissension and fold like a wet suit of dominos. (Hey, I'm on strike, metaphors get mixed.)

Except there's a massive risk to the AMPTP in this endgame of mediocrity, too. First, WGA members are deeply solid, fighting for their Guild's future and therefore their livelihoods. Second, whatever the DGA board negotiates, 1,400 directors are also members of the Writers Guild, and not guaranteed to vote for what they perceive is a bad deal for themselves as writers. Third, the DGA spent $2 million studying New Media and could balk if the deal is too lousy, even by DGA standards. They've figured out the Internet is real. Fourth, if the DGA membership rejects the really mediocre offer and the strike continues, TV networks will end up paying billions in ad "give-backs". And finally, a really mediocre deal would not set any pattern for long-striking writers, who'd reject it. Which would later get rejected by actors. Which gets the AMPTP corporations right back to that nonsensical Scorched Earth Theory.

This means that of all the possible endgames for the AMPTP, only two make sense:

1) Eliminate the terrible risk of a long DGA negotiation blowing up in your face, and settle with the WGA by the end of February.

2) Make a good offer to the DGA, to show you can negotiate with "reasonable" people, because no one can negotiate with those "crazy" writers (unless you're David Letterman, United Artists, The Weinstein Company, MRC and Spyglass Entertainment...) - which is perfectly fine for writers. They've said they'll happily take a good deal wherever it comes from, especially after setting the groundwork for one.

None of this is a prediction. It's only a look at the possibilities and what makes sense. And what doesn't. But the DGA negotiating committee does have a history of caving to lousy deals, just to make a deal. And the AMPTP corporations will choose to do whatever in the world they fricking want. They've walked away from the table. Twice. Amidst an industry shutdown, they're negotiating with a guild that isn't striking. When they want to sit back down and negotiate a good offer and reasonable settlement with the Guild that's actually on strike, they will.

In the meantime, the writers are busy calling venture capitalists...

3 comments:

Frustrated Bystander said...

--"Remember: for the most part, the AMPTP corporations don't actually make any product, they finance independent contractors. Writers, actors, directors can create their work for anyone. Venture capitalists, Internet companies, European film studios. Empty movie theaters will be desperate for product, whoever distributes it. Stream webseries on New Media. Sell original movies and series direct-to-DVD."--

If AMPTP follows a "scorched earth" policy, it leaves the studios and networks wide open for writers/directors/producers to take back copyright by forming "independent studios" to go signatory and produce first run content on the internet. If you look carefully at Fox/NBC's drive with Hulu, it seems that some nets are positioning the internet as the re-run basket. BUT if AMPTP continues this strike into June and then into September, it will allow the formation of new independent enterprises wherein content can be sold back to TV thus shifting where "re-runs" are going to be placed.

Be aware, there is an opportunity here to position the Internet to be used in specific ways. Writers, do you want to control the internet market or do you want to wait for non-existent residuals on the re-run of your work over the internet?

Did you know there is an opportunity to take over the Internet and take back copyright and push TV into being the re-run/syndication market? Why not make that happen rather than battling for pennies on a dollar.

Bill Gorman said...

If by "scuttle the 2007 TV season" you mean end the possibility of new scripted programming for the rest of this season, it's already scuttled.

Does anyone think there is the possibility of new scripted shows being produced given current negotiation realities and production timelines?

Threatening the 2008 pilot process could serve to move the AMPTP, but the 2007 season? Nope, nothing more to threaten, it's been written off.

Alyx said...

Even if the DGA does make a deal (or cave), it is all irrelevant until the writers strike a deal. It is in their best interest to hold out with the WGA until a fair deal is made. As long as both are out of jobs they might as well be benefiting themselves.