Guilds Vs. Producers--The Coming Standoff

The re-election of Writers' Guild president Patric Verrone and Screen Actors Guild president Alan Rosenberg puts the pieces in place for forthcoming negotiations between the trade guilds and their fond adversaries, the producers and studios. The first feints will be conducted by WGA negotiators acting on Verrone and the guild's behalf, and Alliance of Motion Picture and Television Producers president J. Nicholas Counter--seen at left above, alongside Verrone, and looking very M.C. Rove. (Also see my post of September 12.)

Rosenberg won a narrow victory, with 11, 631 votes--just 710 more than the feisty challenger Seymour Cassell. The SAG presidency requires a big personality to garner support from a turnout of the guild's passionate if underemployed 120,000-strong membership--"mostly waitresses", says one producer who withheld his name to avoid having his Cobb salad poisoned.
WGA members need to show recent and decent earnings to vote, and just 2,012 did so this time--but Verrone's 90.2 percent of the tally (he had 68 percent when elected in 2005) is a palpable show of support. His job now becomes to throw himself on the barbed wire of the coming negotiations, in an effort that might be termed righteous posturing. That's because the almost certain course of events dictates that the WGA will slide past their contract end-date of October 31 by extending the pact, and add their influence to the combined power of SAG and the Directors Guild as those two bodies head for their June 30 deadlines.

Verrone's steadily hinted that his group has built up a good deal of strike-prone bitterness since the last agreement. At the July start of talks, the producers suggested both a study of emerging business models and a search for a new way of figuring out residuals that would help the producers recoup their costs before the outflow to writers kicks in. This gambit produced an immediate and surly end to the talks.

The writers won't soon forget getting boned last time. Screenwriter Stephen Schiff, who recently worked on Leatherheads with George Clooney and is now writing the Wall Street sequel Money Never Sleeps, recalls how the WGA "So, so foolishly gave away the store at the birth of home video". As a council member for Writers Guild of America, East (presently, for the first time in years, quite well aligned with their bigger west coast chapter), he'd been in the smoke-filled negotiating rooms:

In 2001 and in 2004, management was saying, can we just wait until we have a business model? I'm sure we'll all agree then and come to a happy formulation. This time the writers knew enough to recognize that was sort of boiler plate for, `We'll stomp on you later if we don't stomp on you now.'

It was long before, in a negotiation to which Schiff wasn't party, that, he says, "the writers accepted a very draconian, bad formula for residuals for home video...and lo, many years later management is saying, `Yeah, we said that then, but we can't [increase home video residuals] now because it's our main revenue stream and it will kill us to give you guys more than point three cents on every dollar we earn.'"

As the AMPTP's Carol Lombardini put it during opening remarks she made on July 18:

We are responding to a changing business climate... production for the theatrical and television market is an increasingly risky business [and] we no longer recover our costs at the box office and instead must rely on home video, pay television and free television... to recover our costs. How long will it be before piracy overtakes the legitimate purveyors of our product?

"Measured against that backdrop, it is no surprise that we decline to add to the red ink on our ledgers by increasing out residual costs when we cannot be certain that we will ever recover our production and distribution costs.

To dramatize what it felt was the absurdity of a minuscule percentage --Schiff says the plastic box manufacturers are getting richer off DVD sales than the writers who created the content--the guild once sent out a nickel in a mailing to members, representing their standard take on a DVD sale.

Though Counter is little known to the public, he's emerged as the face of the producing and studio interests. This is partly because, while the WGA has been much scrutinized since starting up in the labor-friendly New Deal climate of 1933 (and being tarred by the anti-communist surge of later years), the AMPTP is far less transparent. For a recent piece in BackStage, they declined to name the studio reps on their 11-member board. Counter admits to facing some divisiveness--comparing that board to lions and bears--but points out all of his members will be stalwart in the face of a work stoppage. He foresaw a long slog towards an agreement, by adopting a football metaphor: "You never now what the end zone's going to look like, but you keep marching down the field until you get there."

Schiff holds the same sort of guarded optimism: "When management begins by coming in and digging it its heels and saying, not only do we feel like not giving you anything, we also feel we should take some stuff away from you--that's a very nasty opening salvo and makes everyone alarmed. Then the industry goes around wringing its hands for months--in this case the hand-wringing could set a record for longevity, and it results in a de facto strike that harms everyone, including the industry. And I think it may all turn out to be silly. because a little bit of movement on management's part could have great results."

(Nicholas J. Counter, left, by Scott Gries, and Patric Verrone/Getty Images)

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