Writers Prez Enters Ring With Producers

Apr 5, 2004  •  Post A Comment

There are thorny issues on the table as the Writers Guild of America and the Association of Motion Picture and Television Producers begin bargaining this week for a new basic three-year contract.
Among the issues are writers’ demands for a higher percentage of revenue from soaring DVD sales, greater contributions to the rising cost of health care by producers, higher television residuals, and tricky issues of guild jurisdiction over reality and animation TV shows.
However, Daniel Petrie Jr., appointed president of the Writers Guild of America West for the second time only a few weeks ago, already has a prediction about the outcome. “Two things will be true about this deal,” Mr. Petrie told TelevisionWeek last week. “It will be painful for them and it will be disappointing for us. It always is. They come in saying, `Not a penny, not a penny more.’ And they wind up giving more than the nothing that they had in mind.”
“We have never had a negotiation in my experience where we haven’t gone away saying-even though we recommended the deal, the totality of the deal-where there haven’t been things we bitterly regretted not being able to achieve. I don’t think this will be any different.”
There are some differences this time around, beginning with the circumstances that made Mr. Petrie the guild’s third president in less than a year. Victoria Riskin, originally elected to the office, in January had to step down because she didn’t meet the qualifications of a working writer. Her successor, Charles Holland, quit amid allegations he falsified his background.
The resulting turmoil left the 9,000-member WGAW shaken to its roots. “Yes, we have had this turmoil,” Mr. Petrie said. “I would argue that it is behind us now, and it hasn’t affected our preparation for the negotiations. If there is any problem it’s one of perception, not reality.”
The WGAW’s negotiating team will be led by the guild’s executive director, John McLean. The AMPTP negotiations will be spearheaded by veteran labor negotiator Nicholas Counter, who declined comment for this article through a spokesman.
Some believe the WGAW has a problem in this negotiation because the rapid increase in nonscripted and reality TV shows gives the studios and networks new leverage. In other words, if those who write go on strike, TV will continue by adding more unscripted shows.
The WGAW doesn’t think many of the reality shows actually are unscripted and intends to make that an issue. “Reality TV, or so-called unscripted programming, is, let’s face it, generally not unscripted,” Mr. Petrie said. “People write narratives. People create characters for the `real’ people on the shows. It is an area we want to address in these negotiations, especially where a company is already a signatory [to the WGAW contract], and then in another corporate guise, is doing these nonunion reality TV shows.”
The guild also wants more jurisdiction over animated shows, especially those that play in prime time. “Writers go into a studio and pitch an animated show to the same people you would pitch live-action shows,” Mr. Petrie said. “The networks that broadcast animated shows are the same. A writing staff on `The Simpsons’ is like a writing staff on `Will & Grace.’ They write the way you write a half-hour comedy. There is no distinction.”
There is no question the most heated battle will be over DVD sales. One problem is the basic structure of the deals. While a writer gets a 1.2 percent royalty on 100 percent of a TV show, he gets only 1.2 percent of 20 percent of what the producing studio receives on a DVD. The other 80 percent goes to cover manufacturing costs and profits to cover failed projects, according to the producers. “When [home video] was an infant industry there may have been a case for that, but we know now, especially with DVDs, it’s completely different. There is no justification for the 80-20 split.”
Mr. Petrie cited a study by a top Wall Street analyst that showed that producers enjoyed a 66 percent profit margin on DVD sales, estimated at $22 billion in 2002 (or $10.55 return out of a wholesale price of $16).
Another huge issue from the writers’ point of view is health care. Since the last contract, costs have soared, forcing the guild to raise co-pays and the minimum amount made in a year to qualify, which rendered almost 500 writers ineligible. “It was hideously painful for us,” Mr. Petrie said. “Now it’s time for the companies to pay their share into our plan to keep it healthy.”
The writers also want increased residuals from basic cable TV and on scripts for UPN and The WB, which currently pay lower rates because they are not full-service networks. “We know UPN and The WB are not there yet, but for years Fox was on an escalator where each contract cycle they paid closer and closer to full network rates,” Mr. Petrie said. “It’s time to get UPN and The WB on that escalator.”
The battle will also extend into new technologies, especially video-on-demand. Part of it will be over whether that comes out of 100 percent of the revenue or 20 percent. If nothing else, Mr. Petrie said, they want a proper definition. “What is the Internet and what is television if it is transmitted over the same cable?” Mr. Petrie asked. “What is broadcasting exactly? We need to pin these things down.”
The current contract expires May 2. If this cycle is typical, talks will go right up to the last minute and even beyond.
“They’re all like pulling teeth,” Mr. Petrie said. “Every negotiation is really, really tough. You know the companies are very, very hard-nosed, tough negotiators, tough businesspeople. So will these talks be particularly tough? Probably. But I always think the toughest negotiations are the ones we are about to enter. So yes, they are going to be tough on both sides.”