Wall Street: Congloms Let Town Suffer Rather Than Make Fair Deal

Last week, Wall Street firm Bear Stearns issued a report stating that even if the Writers Guild got every single provision it has been asking for in a new contract, the impact on the conglomerates' bottom line would be "negligible." It's encouraging to see Wall Street saying what we've known all along: that the WGA's proposals are fair, reasonable and affordable. (They don't even keep up with inflation!) On the other hand, it is absolutely infuriating that the companies would walk out of negotiations and happily keep thousands of people out of work and wreak havoc on the LA economy over something... "negligible." It is not negligible to countless families in our industry and our region.

MediaPost.com has a summary of the Bear Stearns report here (reg. req.) The highlights:
"From Wall Street's perspective, we estimate the impact of accepting the [writers'] proposal is largely negligible," Bear Stearns wrote in a report last week.
The firm estimates that the $120 million figure would carry an average impact of less than 1% on annual earnings per share for the media companies. That does not factor in any concessions by the writers' side (the WGA), where the principal issue is a desire for a piece of ad dollars from new-media distribution.
The potentially small financial impact suggests that studios (Alliance of Motion Pictures and Television Producers) are more concerned about setting a precedent in new-media revenue sharing. However, Bear Stearns wrote that the writers' forecast for that market "strikes us as fairly aggressive." The firm hinted that studios are looking to the future. They are concerned that a favorable settlement would embolden directors and actors in their coming renegotiations.


Anonymous said...

Okay, my friend just had an awesome idae to help out the strike. Actors who are striking should take advantage of their work contracts and show up for work, but then, since there isn't anything to film, they have to either be paid for no work from a dwindling money supply, or their contracts can be cancelled, at the legal expense of the company, which doesn't really change the status quo much, and then it makes the media companies look like they're trying to kill the entire industry.
Everyone! My friend has had the epiphany of the ages!!!
DaBull, Leader of the Resistance
(please, don't take that site too seriously, it's in its infant stages right now, we have time to make it respectable when it need to be...)

casey said...

It's possible that the studios think that holding out for the writers' strike will put the DGA and SAG in a lesser position?

Becca said...

It is heartening to read that Wall Street is in your corner and agrees (like most of the thinking, intelligent world) that your provisions are fair.

It is also disgusting to know that the AMPTP refuses to come back to the table and conduct these negotiations like respectable business people. So far all we've seen them do is act like a bunch of pissed off teenagers.

Perhaps Wall Street can exert some pressure.

I would be glad to organzie a fan revolt, if I thought such a revolt would make an impact, large or small on the AMPTP. But they don't seem to acknowledge the audiience in the first place.
That is the most befuddling thing of all.

dp said...

There seems to be a lot of confusion about why wall street won't settle, the studios etc.... Even when they agree the WGA isn't asking for much.

It is the way the WGA went about it. Multinational corporations are not going to set a precedent of being bullied by an angry writer and an inexperienced negotiator. That is the bottom line.

Change your team and win now. Or you can hold on to that team and watch as the DGA and SAG get their contracts and WGA gets torn apart.

Its not that they don't want to talk, it's that they don't want to talk to Verrone and Young. Why cant the membership see this now and fix it before it's too late

There is no denying that the antagonistic front the WGA put up early on instead of negotiating in 2006 set the stage for this.

Now I'm sure other bloggers will come on here and say, "the amptp is a bunch of meanies, Counter is a &&^$!, etc.." So what? Who says they have to be nice guys? This is business and he who has the gold makes the rules. The gold isn't your script, its cash, distribution and production resources. Your job is to convince the "Bully" to give you what you want, not to try and bully the bully. They know that game better than you and they are called Bullies for a reason, they earned it.

Do what you want but the writing is on the wall. Everyone else is reading the same thing.

catch22 said...

and then it makes the media companies look like they're trying to kill the entire industry.

Cause a problem then try to make it look like its the other sides fault.

Typical WGA tactic.
From what Ive seen This strike is costing almost everyone, Studios, Writers and Many Many more people.
The Only people who are profitting from this strike is the WGA, They have profited from many Donations to the Strike Fund, This they use to Give LOANS to striking writers, But they ultimatly get to keep the money.

They have also manged to trick fans into funding publicity stunts such as the 'Buy a pencil' publicty photo op.

I support the Writers right to a FAIR wage
But not the WGA's Funtime party Strike attitude

R.A. Porter said...

Luke, I'm a little confused by your comment. First off, SAG isn't on strike at this time. Did you mean to say "[w]riters who are striking..."? Also, as the producers will be able to invoke their force majeure clauses soon, there is little to no expense to them in canceling contracts.

To those of us who've been paying attention, it already appears that the AMPTP is trying to kill the industry (through hubris, greed, and vanity rather than malevolence.) Those who don't already see that are unlikely to have their opinions changed much unless the strike drags long enough for SAG's contract to expire and the actors to join the writers on the lines.

Right now, it's good that investors are hearing some truth. Pressure from a few of the larger institutional investors such as CalPERS needs to be brought to bear on the congloms. This Bear Stearns report is hopefully the beginning of a stream of good news for the WGA.

John Aboud said...

To DP: You can focus on Young and Verrone all you want, but to do so is to fall for an AMPTP ploy. The neg.comm. is filled with people like Neal Baer, Marc Cherry, Shawn Ryan, Bill Condon and Susannah Grant. Surely those are "experienced" people who should merit more respect and better treatment than they've received from the Alliance to date.

To Catch22: Come on, dude. No one is having fun. Writers are doing everything in their power to draw attention to the fight, keep morale up and provide interesting ways to keep the community and supporters engaged. The only funtime party will be after this bullshit is resolved. I hope to see you there. We can buy each other shots.

not a troll said...

John, I have worked with a couple of the writers you mentioned, while they are talented writers they are not negotiators, one was famously duped out of money by his own agent. Just because you have been a writer for a long time does not make you qualified
to negotiate. We need to get better leaders, the deck is stacked against the WGA. The WGA hiring a PR team is the same as the AMPTP hiring one. More venom less negotiating, not a good sign.

That Guy Over There said...

DP, that's an asinine argument. The congloms are losing money and keeping the town out of work because they don't like the people they're negotiating with? The roadblock isn't money and control and new media, but the negotiators themselves?

You're funny.

catch22 said...

John Aboud: I call it a Funtime party because from most of the photos Ive seen, Picket lines look happy fun places to be
everyones smileling and poseing for photo's

Vids show Writers chanting about Power Not Fairness
Writers have Concerts, while others loose jobs
Writers disrupt Late night talk shows that are working for the good of their staff
What you call Interesting ways to keep people interested Looks allot like Writers having Fun.
It Must be hard work pretending to be happy so much.

Unfortunatly I wont be able to attend your party after the strike, I live much to far away and I cant afford to take time off work to come visit the US.

JB said...

To John Aboud:

You support Verrone and Young. DP, who posted above, does not. That's his opinion and he's entitled to it. It doesn't mean he's fallen under the hypnotic spell of the AMPTP's fairy dust. This whole "they want to divide us" crap is getting old. What's dividing us is being out of work.

chardkerm said...

DP...So, what you are saying is that the fine human beings at the AMPTP have put you, me and the rest of the industry out of work because they don't like their negotiating partners? And you still rail against the WGA?

You might want to rethink that rationale (or irrationality).

Brooklyn scribe said...

DP -- your latest post surprises me, since in the past you have been pretty smart about things. Aren't you aware of the simple fact that if the DGA makes a good deal, then WGA can and will take the exact same deal? And the same goes for SAG. They don't exist in separate universes. Unless the DGA deal doesn't address the New Media profit participation enough to satisfy the WGA and -- half a year or so down the line -- SAG, we will embrace it enthusiastically. Even if they wanted to out of spite, I don't think the AMPTP can legally attempt to withhold whatever contractual details they offered to and were accepted by DGA.

And speaking for myself, I don't believe the 7 or 8 media conglomerates that set the agenda over at the AMPTP would have initiated this chaos just to somehow teach "an angry writer and an inexperienced negotiator" a lesson. That scenario treats the AMPTP brass like they were high school students rather than captains of industry. They did this for a reason and the reason is incredibly simple: they want to try to keep a lock-grip on future profits from internet delivered material, be it scripted or not.

Personalities matter but they don't matter that much -- not when you are talking about billions and billions of dollars.

I don't

reasonable said...

Dp, you remind me of the Ku Klux Klan. No matter what the Klan does it's still the evil N***** fault.
"He who makes the gold"? Obviously, the Writing's the gold whether you want to accept that fact or not, else the AMPTP wouldn't be willing to destroy AN ENTIRE CITY/INDUSTRY et al to keep it or those who make it in their place. Considering your myriad of comments in a similar vein, while I don't have the vaguest clue what Verrone &/or Young did to you, I would suggest you get some therapy to get past such deep seated fear & hatred. But you're quite right, this is a business, that's why writers deserve to make more than $250 A YEAR for millions of streaming & downloads, why animators & reality writers deserve the same benefits & pensions that other corporations provide their workers.
"Convince the bully to give you what you want"? You might want to talk to any kid (which is the maturity level of most bullies, get it?) who's had their ass kicked by a bully to see how successful reason is. The only tactic w/ bullies is to expose them for what they are, which is exactly what the people who believe this fight for fairness throughout the corporate world are doing.

Best of luck in the rest of your endeavors.

Tom said...

What people seem to have lost sight of is the amount of people out of work that have no stake in the outcome. Lives are being ransomed by fat cat execs and spoiled writers, two that sides can afford a couple months off.
Publicly everyone supports the writers. It's a very different story behind closed doors. A lot of bartenders have scripts in hollywood.

dp said...


Am I falling for a ploy by the Amptp? Is Alec Baldwin falling for the same ploy? The IATSE? The DGA? The Wall ST Journal, LA Times?

There are too many people with completely separate agendas to think that everyone is falling for the same conspiracy. Which means it's not a conspiracy but based on a whole lot of truth.

Look Young is your employee. You're lifting him up to a sort of deity, and while noble, it's just crazy. He's not even a writer. If this was a baseball team you would run a sacrifice play to win the game. You wouldn't be obstinate and make sure he gets a chance to try and hit a home run when clearly he has never done that. Sure you can say that ideology wins but everyone dies, but where does that get you? NO WHERE! DONT BE A FOOL! Your sacrificing a whole industry full of other people that will remember this forever. Your also weakening other unions and guilds in the process. You have no more leverage. You can't win a war of attrition. Please for the sake of everyone else, come to your senses and realize that although the amptp is not fair, they played the better hand. No where does it say that fair has to win. Smart wins every time. Like a football game, the better play book wins. You can say I didn't think it was fair to fake a punt or run a double reverse but a W is a W. Everyday you stand to get less than the day before. HIstory has proven this in war, labor strikes, business negotiations, you name it. Your dug in and out of ammo. Those of you who haven't had the misfortune to actually be in a real live battle and out of ammo should heed this as more than a metaphor. It wasn't fair for me then but I didn't wait for the enemy to crawl into my bunker. I am no fool.

jr said...

DP, if you're not on the AMPTP payroll, you should be. You're doing them a great service. But you're comments really have nothing to do with the Wall Street report, which shows the AMPTP for what they are. Control freaks. They'll bring down the entire industry before they'll let the people who make their product tell them what to do. They have a boss-man mentality. You don't demand raises. You don't demand money. You take what the boss gives you and you'll be happy with it or else hot the road.

The problem that the AMPTP keeps missing, despite their admission that they can't even have a profitable return on more than ten percents of their business ventures, is that the movie business is a business of selling art, not the business of controlling artists.

Harold said...

Until housing prices go up and foreclosure rates go down, the WGA strike shouldn't expect much attention from Wall Street.

I've seen people post how the shareholders give a shit. They don't. This strike isn't even on the radar of most fund managers. Foreclosures and sinking housing prices and (today) concerns about a stable oil supply.

WGA strike? Nowhere in sight. It's not even a pimple on the ass of big market issues.

Even if the WGA strike was the only anomaly out there, there is no such thing as shareholder pressure at CBS/Paramount/Viacom. National Amusements is the majority shareholder of CBS Corp. and Viacom. Sumner Redstone is the majority shareholder of National Amusements.

Don't expect Sumner Redstone to turn against himself.

Others elsewhere have posted that the government will step in. That's B.S. Don't expect the SAME government that has allowed media consolidation and ownership by a handful of conglomerates to suddenly think it made a mistake.

Anyone who thinks the shareholders or government will provide a deus ex machina and solve the strike also probably believes The Late Show is going to get a waiver or that it won't be back on air if it doesn't.

Unknown said...

DP wrote:

"Change your team and win now" and

"Am I falling for a ploy by the Amptp? Is Alec Baldwin falling for the same ploy? The IATSE? The DGA? The Wall ST Journal, LA Times?"

I don't care who or what Alec Baldwin is falling for, and my faith in Tommy Short is in the negative numbers.

I haven't heard the DGA dissing the WGA leadership. The DGA will make the best deal they can for the DGA, which is their right; and naturally they'll feel they're terrifically suited to do this, just as every union leader believes they're terrifically suited to do their work, or they wouldn't be doing it.

I would be interested, though, to read The Wall St. Journal and the LA Times suggest that the Writers Guild should dump Verrone and Young. Can you point me to those articles? I assume you're not talking about bloggers with some loose attachment to those sites. Reading that material will help me get a better handle on what you're saying.

Because in a bigger sense, I'm astounded at the idea that all it will take for the AMPTP to give us our reasonable, "negligible" demands is to put two new faces at the table. First, because the idea seems unreal to the point of being from an alternate dimension; second, because the AMPTP has never given anything to the Guild in its entire history without being pushed into it. But now they will. You're absolutely CERTAIN.

...Actually, didn't that just happen? Didn't a group of "reasonable" writers (NOT Verrone and Young) approach and say, "Come, let us be reasonable"? And it didn't work.

But now it will! It never has before, and it didn't work five minutes ago, and bowing and being reasonable didn't work when the DVDs were taken off the table, but NOW! NOW, yes! Just do everything I say and it'll all work out!

If you really have something in mind, could you be more specific? Because I must be misunderstanding you. If you were negotiating, and let's pretend we got the AMPTP into the room, what would you say to them, and how do you see them responding? I mean, do you figure they'll just say, "Thank heaven you're not those two awful men, here's everything the Guild wants," or what?

Unknown said...

Tom, thank you for your comment. Unfortunately, it's in the wrong place, since the WGA never left the table. Hopefully one of the other trolls will pass your message to the AMPTP.

intrigued said...

chardkerm, may i point out to you that it was not the AMPTP that put the writers out of work (and subsequently others as well. that was actually done by the WGA when the called the stike.

brooklyn scribe, the AMPTP is under no obligiation to offer the WGA the same terms it gives the DGA. just like the WGA is not obligated to accept the terms the DGA agrees to.

reasonable, the writing is NOT the gold. if it were the writers wouldn't hangling with the AMPTP for the small % they are asking for. if it were they would simply that their gold elsewhere. (its been suggested many times, but there is a reason it hasn't happened - MONEY!)

harold, you are dead on but ive been telling them the same thing for a month and they still dont get it.

gdspgcfan said...

Ok, so i couldn't find a better place to pose this question. I know it's partially answered in every post on here, and probably all together in a post somewhere far near the beginning of this blog, but I wasn't able to find it.

Is there any way you could post an entry, will all the specs and details of what you, the WGA, are asking for? I have the basic, idea, but when people ask me about it, I don't want to be getting the facts wrong. A consolodated, all info in one place, entry would be greatly helpful.

Thank you in advance to whoever puts the list together if someone does.

Stay strong, you WILL win this fight :)

jr said...

intrigued, the writing IS the gold. The industry being shut down as of this writing has cost over $4 million. and will hit the billion dollar mark soon. What do you call that?

Without the writers the money stops. At this moment in time the AMPTP and the money it represents is worthless. They are impotent. Since they're turning away the pencils, maybe boxes of Viagra would wake them up. The writers have the power now.

VDOVault said...

To keep this discussion on point let me remind people who are investors in a variety of fields beyond the entertainment industry that it was Bear Stearns that took a couple of big big hits this summer thanks to the collapse of the CDO and other mortgage paper based derivatives markets this summer. They cannot afford to make any more missteps with the funds they manage so soon on the heels of the crisis of the summer of 2007.

Therefore I find it fascinating that Bear Sterns (of all the big finance houses) was the first to come out with a report that says that the amount the writers are asking for (and moreover throws in the same deal for the directors and actors) is not only 'reasonable', it is 'negligible'.

There are many millions of investors, both individuals and institutions who will be looking at this report and making investment decisions based on it.

Moreover the decision by the guild to hire two PR people with political connections shows that they not only understand how the federal government lobbying game is played, they are ready to play to win. While I would have suggested the guild hire someone with Republican experience and ties in addition the 2 Democrats hired (because it is not smart to concede that all Republicans are not interested in the employment status of their millions of constituents or believe that labor interests are necessarily 'evil'), at least the recent track records of the Guilds consultants are far better than those of Fabiani and Lehane who from the looks of things couldn't figure out how to get Jesus Christ elected as Christianity's savior much less get a presidential candidate into the White House.

Anyone who thinks that significant pressure cannot be brought to bear upon Wall Street, Capitol Hill, and the bureaucracy who will then lean upon the AMPTP to stop the madness is clearly a denizen of the 'La La Land' long time Washingtonians and Wall Streeters openly mock and needs significant schooling in how these institutions that really determine how the country is run actually operate.

dp said...


I am sorry but I have a masters degree from a top 5 school. I make close to 7 figures. I don't live paycheck to paycheck. I do have compassion for those on my crew who make far less. Like my loader who makes 19 an hour. How much should he have saved Gavin? Also being a sitcom writer is not something to be lauded now a days is it? I mean it was your lack of inventiveness that basically killed the format. How many sitcoms are there now? How many 10 years ago? Even people in the fly over states can see your hacked jokes set up in 3's coming a mile away. They don't want to patronized by you either.

Raymond and Aboud-

The difference between us is that I have a discernible opinion. You on the other hand have not questioned any strategy that Young or Verrone have put in place. That makes you the patsy. You have to be kidding me to say they are 100% right in everything they have done. If anything is suspect, it is that attitude by the WGA. Anyone with a differing opinion is a shill on the amptp payroll who is uneducated and living check to check who is not smart enough to see what is going on. Really?

Someone please change my mind here. I will stop blogging if one person can name one labor strike that Young has negotiated successfully. So far all I can find is the Guess jeans strike where he came in with the same tactics and every single person lost their job forever.

Also everyone that keeps asking people, "oh yeah, what strategy would you put in place?". It's not our job to negotiate, just like it's not what you do for a living. I do know that if you hire somebody and they aren't doing their job, then you fire them.

Let me use a sports analogy again. If the WGA is a baseball team and they send Young up to bat and he cant hit a 88 mph ball and all you can say is "well I can't hit that either but he's our guy and I know he really wants to." I am sorry but not good enough. You pay for results not intent. You get a baseball player that knows how to hit an 88 mph ball and who has done it many times before.

Young is a negotiator. Simply saying what you want and expecting the amptp to give it to you is not negotiating. Antagonizing the amptp in their 2006 pre-strike efforts is as foolish as when he did the same thing to Guess jeans. It didn't work then and he is getting the exact same results now. The amptp does not have to talk to Young or Verrone. They don't want to set a precedent where every other negotiator can start with big threats. The WGA elected Verrone on the same "were mad as hell" stance as Bush won on "nobody is gonna mess with the USA". Anyone who thinks this has helped stop terrorism, improved international relations, saved lives, is a fool.

Aboud, Raymond, Bluestocking, Gavin, et al....

Are you telling me that your leaders have been 100% infallible in this?

Bluestocking have you not read the DGA presidents letter stated he did not agree with WGA strategy?

Lets look at 88 for a minute. WGA strikes, talks stall, DGA makes their deal ahead of time, WGA writers and show runners go ficore. WGA gets their asses handed to them. The only difference is that the studios weren't owned by huge corporations. If you read the article they don't even notice the strike on Wall Street. Pay them or not its not a big financial impact either way. If Young can't get them to make a deal then he's the problem here. Why not have another election? Let the members decide if the plan is working. If you're that confident it shouldn't be a problem.

John Aboud said...

Yeesh. I'm gone for a few hours, and the place goes bananas. A lot of very unproductive and mean-spirited insults flying here on both sides. Not cool, people. I wield the "delete" button impartially and with stern disapproval!

And, no, I don't think the WGA leadership is infallible. If they were, we wouldn't need this site! But I prefer to give them an earful offline (I'm not as big an elbow-thrower as my friend Mazin).

I do believe it's a mistake to focus on Young or Verrone as the stumbling blocks, despite all the PR fodder Young gave the AMPTP in the early days of this. The negotiating committee is much bigger than David Young, and the current impasse can't be laid at his feet. The animation/reality thing is not a strike issue, but I see no reason to pull it unilaterally. We saw what happened with DVDs on 11/4!