2/09/2008

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

17 comments:

Stephanie said...

And what about the "favored nations" clause that was promised at the Strike Captains meeting and suddenly disappeared overnight? The more that is known about this "deal" the worse it smells. The future hell you're looking at is here TODAY because the WGA, if this deal passes, will be forever changed, and not for the better. This is the Maginot Line.

PJ McIlvaine said...

And what's the good part? Say that again, louder.

stuiec said...

stephanie: bad metaphor -- the Maginot Line was pretty impregnable, so the Wehrmacht simply invaded Belgium and went AROUND the Maginot Line into France, and straight into Paris.

Maybe Thermopylae is a better metaphor -- but that might put you in the role of Leonidas and the 300, and they're remembered for what they won for Sparta and the rest of Greece by sacrificing themselves....

Ashley Gable said...

I'm unclear when the piece says there are New Media writing minimums. Although there are minimums for derivative content (e.g., Heroes mobisodes), for original content minimums are "negotiable," which I think translates as "Hey, new writer, we're going to pay you in shiny beads for your pilot for the internet."

Watcher said...

I'm glad there's somebody out there trying to explain this. But I have to say -- I'm sick to death of the arguments that go "Okay, we didn't achieve what we wanted to this time, but maybe next time it'll be easier to fight, by some small percentage! That's a victory, right?" Because the answer to that would be "No."

laborchick said...

actually, watcher, as a (non-WGA) union organizer, i'd have to say that the answer to whether incremental change is still a victory is "well, yeah."

no, you didn't achieve everything you wanted, but we rarely ever do.

until we change the national perception that high-profit capitalism without reigns is the american way, incremental improvement is how we create toeholds in our fields.

incremental improvement will almost always be better than moving backwards. from robert's brief analysis above, it seems that a number of precedent-setting toeholds have been gained, so that when newer markets inevitably explode with activity, there will be gains and a means to make further gains in future contracts.

good luck out there...

JimBob said...

I think Mr. E. is wrong about this being our only chance to settle, that after these "signposts" are passed, the companies are going to sit back and happily let the strike run. That just doesn't make sense. We need to take time, pencil out where some of these caps and thresholds and things are going to leave us when the companies change the way they do business in order to take maximum advantage of the weaknesses in this deal. Does anyone think the studios would have been motivated to sell shows to their self-owned cable companies for rerun if we hadn't made a crappy cable deal that motivated them to do so? When we tie thresholds to the "budget" do you not think they're going to get very damn creative about what constitutes a budget? We need to think this stuff out. There isn't time if we stop the strike now. Signposts be damned.

scribeguy said...

And "what about the favored nations," indeed? Stephanie is right; that was absolutely to be in the final contract according to Dave Young in the Strike Captain's meeting. It should be one of the first questions asked tonight. Better yet, Messieurs Young, Bowman and Verrone, start your talk by reassuring us that a favored nations clause IS in the tentative agreement.

I'll take a moment here to thank all the blog authors for their intelligent pro and con arguments today on some of the key issues. I'm assuming that UH will be THE place to air other opinions on the key issues, including as to when we vote on them!

As Tom Cook, capo di tutti capi during the '88 strike said in Friday's Captains' meeting: back then it took 10 days to get all the mailings written and in the mail, but with the Internet, that period of time is no longer strictly necessary. Perhaps the guild could authorize some mass e-mailings to all Guild members early this week, sharing more views before a vote on Wednesday, if that's the way we decide to go.

Again, thanks for all the reasoned, passionate discussion.

Kevin Droney

PJ McIlvaine said...

"SATURDAY 2:40 PM: A WGA bigwig just phoned me with this important message for WGA members: "I need to bring up an important issue. The members have not seen all the deal points. The only deal points we have are the New Media deal points. But there is a key issue we aren't seeing right now. Right now, the only favored nations clause we have with SAG is in New Media. Members may think we're in a good position to benefit from a better SAG deal, to let SAG take the ball from our deal and run with it. But members need to know that if SAG turns around and negotiates a better DVD deal, or a better pension deal, or better rates anyplace else other than New Media, we will not benefit. We only have favored nations with SAG where it concerns New Media and even that isn't even written down. It's just a verbal agreement. They [the AMPTP] tried to screw us on this at the last minute."

You have your answer, Stephanie, courtesy of Nikki at DHD.

stuiec said...

Kevin "scribeguy" Droney: yes, the Internet means that mailings can go out faster than in 1988. However, there's still the human element: reading and absorbing the proposed contract, working through one's own reactions to it, discussing and debating and maybe even lobbying one's colleagues about it, and finally coming to a decision that one can live with before casting one's vote.

Because one other thing the Internet does today that wasn't so quick or widespread in 1988 is disseminating individual views on issues, without editing or filtering. It takes time for each member to react to the cacaphony of voices and to come to a personal consensus on how he or she will vote.

Again, if the meetings today both indicate that members overwhelmingly favor accepting this deal (and that the opinion to the contrary here and elsewhere is over-amplified by the Internet), then the leadership will probably have you back to work on Monday. But prudence and a concern for the future of the Guild would counsel a little patience, if at all possible, and a little extra patience on top of that would be even better.

Watcher said...

laborchick, my point was that there *was* no incremental victory. Essentially, the argument is, "Okay, we lost this time, but next time maybe we'll be in a slightly better position to fight!"

No, *that* is not a victory. Saying, "Okay, there's language in the contract that doesn't help us now, in fact it makes no difference at all, but *might* help us in the future, even though the studios have never budged an inch before, gosh, let's be thankful."

No, that is not a victory. Living to fight another day is the very best it is; and even then, nobody's going to want to strike again in three years.

So no, that is not a victory.

We didn't get everything we wanted? Of the two issues everyone said the strike was about -- EST and streaming -- we got NOTHING we wanted. Nothing. "Double the DVD rate" applied to 3.99 downloads = zero for the writer, both now and until the population of the Earth gets a lot bigger.

I would be happy with an incremental victory. When I see one.

Watcher said...

laborchick, I just wanted to add, I didn't mean to come off so bitterly toward you. I feel as though I'm being given piss to drink and told it's lemonade, and that's obviously not your fault. And in fact, I know a lot of people, including many promoting this deal, really want to believe it's lemonade. I'm just having a hard time swallowing.

Jeremy said...

I will say that I am interested to see if the L.A. meeting is at all similar in the reactions to the N.Y. meeting (which seems to have accepted the fact that they will have to take it). As Stuiec mentions, the dissenting view is magnified on the net. Someone satisfied with the deal may not voice his opinion as loudly as someone who is not.

Jeremy said...

Watcher (and all others saying you got nothing in this deal), you did get some victory didn't you? I'm no writer and so I won't be feeling the effects of the T.V./internet switchover on my residuals. That said, didn't the studios not want to give you any internet juristiction or residuals in New Media? Arguably the DGA would not have gotten the deal they got without the strike which means you wouldn't have either... right? You'd be stuck with, "let's wait until the next contract to discuss New Media when we know more about it," right? They'd keep pushing it back until "no residuals" was the precident. Jumping from something to something better is easier than jumping from nothing to "something better" right? You've taken a step (small as it might be) sooner than if you hadn't gone on strike. That is why you have an incrimental victory. Take it or not, can you get much better in June (still waiting for that one to be answered)?

Jeff Gottesfeld said...

Nikki Finke's report today at 2:40 p.m. about "Most Favored Nations" clause runs counter to an email I received directly from the WGA today, from a person who was seated onstage at the strike captain meeting yesterday.

We lost the "Most Favored Nations" clause in its entirety overnight. It's not in the deal. Alas.

That said, I still think the most important thing to do tonight is listen.

scribeguy said...

Stuic,

I agree with you, actually. I actually meant to say (but didn't) that we could be well-informed enough to vote to lift the "restraining order" i.e. the strike, or not. Turns out we can vote on it by Tuesday.

You're right to point out that a healthy, passionate dialogue on the pro's and cons of individual portions of the tentative contract (already begun on this blog)will still take time...and allow everyone to get their heads around what it all means...and doesn't mean.

Meanwhile, those of us who attended the Captains' and the General Meeting came away with a better sense of what was possible to achieve, and the tremendous efforts of our UNITED negotiators to get them. Thank you David, John and Patric.

On Thursday I was one of the many strikers still unconvinced that we'd used our leverage to maximum advantage. Now, I am convinced.

In Solidarity,

Kevin Droney

scribeguy said...

Justine,

Thanks for being such a spark plug out on the line at Universal. And thanks for your kind words, and the words of every SAG member out there with us at every studio.

Best of luck to all of you in your upcoming negotiations. I hope we've made it easier for you to get what you need.

Kevin Droney
Gate 3 Captain
(aka: Italian Straw Hat Guy).