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Thursday, Mar 28, 2024

Unknown Ending

If the three-month screenwriters strike and the current stalemate over a new Screen Actors Guild contract and accompanying slowdown in film and television production serve as a reminder of anything it is of the business side of show business. Hollywood talks about, and celebrates, artistic expression by actors, directors and writers but then something comes along to show the importance of the accountants, chief executives and labor negotiators. Why the industry finds itself in its current state of labor turmoil is a combination of many factors trying to right perceived wrongs of the past; differing strong-willed personalities with competing visions where the industry should go; and consolidation of distribution into fewer hands. The digital revolution is as good a starting point as any and feeds into the other factors. With the traditional modes of distribution broadcast television and movie theaters being eroded by laptops, home computers, and a variety of mobile devices, Hollywood struggles to deal with demographic and cultural shifts harming its business model. These shifts put financial pressures on the major studios that are then transmitted onto the labor unions representing the creative talent. The unions in turn don’t want to be locked out of participating in whatever new revenue the studio moguls go after. When management and the unions are at odds with each other, lost is any sense of cooperation on how to fairly split the digital pie. “To some extent it is like two scorpions in a cage,” said Jonathan Handel, a Los Angeles entertainment attorney and observer of the Hollywood labor situation. “They (labor and management) are fighting each other but the thing they forget to do is fight the cage.” The introduction of new technology has sparked past entertainment industry labor disputes. It is almost as though there is a 20-year cycle where grievances and gripes build up and then something snaps. The 1960 Writers Guild strike was over television residuals and health benefits. In 1988, the writers walked out over payment of their work made available for home viewing through videotape and increased residuals from one-hour dramas and foreign distribution. The sticking point in the negotiations for a new WGA contract in 2007 was payment and jurisdiction over new media distribution of original and repurposed work. When the two sides failed to reach an agreement, the writers walked out. From the WGA’s point of view, the large studios want to ring every last dollar they can out of new technology and it was up to them to rattle the corporate cages and disrupt business-as-usual to get a fair share. The stance of the studios was one of not wanting to give away too much because they didn’t know how much money they would make from online streaming and downloads. Lots of big numbers get tossed around on the potential revenue that new media will bring in. The Walt Disney Co., for instance, expects to bring in $1 billion in revenues from online content although that also includes gaming and e-commerce as well as advertising on network and cable channel websites. But Peter Dekom, an entertainment attorney in Los Angeles and co-author of “Not on My Watch: Hollywood vs. The Future,” said the unions go down the wrong path with assumptions that new media means big dollars. The Directors Guild of America the first union to reach a contract with the studios and the WGA are of the mind to let the new media distribution develop but not so with SAG, Dekom said. “SAG actually believes the money is there today,” Dekom added. “The analysts on Wall Street are saying that’s not true and it’s not on the immediate horizon.” The leadership of both the actors’ and writers’ guilds has been described as aggressive and made up of militants and hardliners. Certainly the approach by the WGA leadership changed following the 2004 election of Patric Verrone who pushed for bringing writers of animated programming, reality shows and video games into the Guild. The actors union has always been a tumultuous political entity made up of a number of factions – militant, non-militant, pragmatic, experienced working actors, and non-working actors. In addition, there is tension between SAG and the smaller American Federation of Radio and Television Artists, which did reach a new contract with the studios. In the past the two unions had bargained together, an alliance that unraveled this time around and allowed the studios to play each union off each other. “When they are fighting with each other, they cannot present a unified front,” said David Prindle, a professor at the University of Texas in Austin who wrote a history of the Actors Guild. In contrast, when it came time for a work stoppage the writers did show unity, even from the hyphenates straddling the line of writer and producer. The membership was put on a strike footing long before carrying picket signs through meetings, letters and e-mails outlying the issues of the contract talks. When the talks started in the summer of 2007, they did not go well with the two sides presenting proposals designed to be rejected rather than conciliatory counterproposals that would get results. As the 800-pound gorillas in the negotiating room, the studios’ attitude was they were not going to be too easy; of subtly telegraphing for the writers to take their best shot with a walkout; that they would be resistant to any disruption to their business. While television production ground to a halt and feature film shooting slowed, what couldn’t be disrupted was Hollywood’s biggest night the Academy Awards. Attorney Handel said it’s no coincidence the strike ended when it did and allowed the Oscars broadcast to go as planned. By February the studios had achieved their goal of a DGA contract and cancelling production deals; and once the Oscars had passed the WGA would lose their leverage, Handel said. As the last union in line for a new contract, SAG lacks any leverage. Unlike the writers, the actors have no awards show to disrupt. With no talks set between the union and studios, the next milestone comes in mid-September with the results of the SAG national board elections. However those votes are counted, there remains the larger issue of how the industry faces a future of digital distribution. Will a change in SAG leadership bring labor peace; or will the proud hardliners maintain the stalemate? The unions and management needs to be on the same side talking and building the future together, Dekom said. “Ultimately,” Dekom said, “if management fails to have the vision to monetize content, I don’t care what the unions want or what management wants: there is no money to fight over.”

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.

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