Robert Elisberg: Deal Summary at First Glance

This was written by WGA member and HuffPo journalist Robert Elisberg.

I’ve been asked to send in a few thoughts under the mighty UH Deadline. Though a disclaimer is not really necessary, you’re getting one anyway. This is on a cursory look at a summary, written under deadline. Not only might your mileage vary…mine might, as well.

Overall, I think there are some extremely good things in terms of precedent, and some important improvements over the DGA deal, but just unfortunately it lacks enough in some serious ways that there will be much more divisiveness than I'm sure the leadership would prefer. But I don't think it's a bad offer.

We’ll get to the 17-day free window in a moment.

First, though, the big thing that leaps out to me is the cap on that third-year 2% of distributor gross for current series, which sort of defeats the purpose of distributors gross. But – it doesn’t strike me nearly as problematic a cap as a flat-fee cap. Though it works out to $1,600 for hour-longs, that's not a flat figure but rather based on an "imputed value" of distributor gross being $80,000. While I'm realistically wary about the AMPTP ever adjusting figures, this is much different from the 1984 home video deal, which had an ethereal "when the industry grows" proviso that could easily get danced around, and has been for a quarter of a century. This deal today on streaming has an actual figure of value assigned -- $80,000. I would think that this "imputed value" can therefore be adjusted in future contracts much, much more easily, especially since it's based on distributors gross, which is easier to police than dark, hidden minutae. If it becomes clear that the value is far-exceeding that $80,000 value (as I suspect it will eventually), that's easier to discover and address than in the past – then a Guild might have stronger bullets to use. Not perfect, and yes, it's a cap. But it's a cap (for only one year) that has a ceiling which seems much more realistic to address and raise than previously. Whatever its faults, and it does have faults, it is significantly better compared to the DGA deal.

Now the free window. I would have much-wanted to see the free window tightened from the DGA deal, and it wasn't. However, I not only understand the need for some window (since that’s how many people watch shows first-run today), but I'm not convinced that series will only run in that free period. If the network discovers that people watch rerun streaming at any time (and I suspect people will does so – after all, they re-watch an episode of "Seinfeld," "Cheers" or "Law & Order" 50 times), then networks will keep streaming them as long as they make money from them. That's why I think we mostly have to keep a vigilant eye on that $80,000 "inputed value" capped ceiling for three years from now. The other semi-related question is that if networks keep streaming shows beyond the window, even in perpetuity, will that lower the value to networks of syndicating their shows? If so, they'd have to balance what they make from streaming compared to what they make selling shows into syndication.

Also, based on no research but my own observation and pure guess, I think for at least the next few years, networks won't be dropping TV reruns much because the marketplace isn't there quite yet to justify it for them. (I think most Internet watching these days is first-run -- kids won't watch a show first-run on TV, but catch it on the Internet.) Whether this window can be adjusted in the next contract is another matter, of course. Keep in mind, even without the Internet, networks have been cutting back on TV reruns in recent years. I don't say this to justify or defend anything, just to look at the reality.

The "double the DVD rate" for downloading only kicks in after 100,000 units of a TV show and 50,000 units of a feature are sold, and my understanding is that those thresholds today are never met. So, that works out today to being worth zero. Not good. However, in the future, as people move to downloading and away from DVDs, that's another question, and it's likely that that might be the case. In which case this is an important precedent to establish.

While at first glance I'd liked to have seen the budget threshold for Internet-covered productions lowered from what the DGA deal had, I took a second glance and noticed what I think is an important gain: having any new Internet project be covered as long as a WGA writer is involved.

Separated rights and New Media writing minimums are good. Important things to get, though not the hot button issues as those above.

Again, to be clear, I'm not arguing that there are no problematic issues – there absolutely are. Just that (from what little I can see from the summary, and at a quick glance), I think there are good cases that can be made for the full deal. The precedences being set are important, and the holes appear like they can be fairly policed – at least more-fairly policed than holes in the past. Who knows, of course. It requires vigilance.

For all the things I’d like to see improved, I think the case made that this is the best offer we’ll get for several months – with no guarantees of big improvements – is valid. I wrote a piece of Huffery last month that there are several critical signposts for the companies in February and predicted therefore that that’s when they’d want to settle. That appears to be the case – and if February passes with no deal, so do those signposts. In which case, the companies have little need to settle. So, I do think (at quick glance) that it’s a flawed, but good contract worth accepting now, at the risk of future hell.

-- Robert Elisberg