Saturday, February 9, 2008

Writers Deal: Details Emerge

NOTE - This article is superseded by http://digitalmedialaw.blogspot.com/2008/02/writers-guilds-east-and-west-held.html. Click on the link and read the newer article instead.

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The Writers Guild held a closed-door meeting Friday with strike captains to brief them on the tentative deal. Here’s what a source inside the room told me:

The Meeting

About 250 strike captains attended. The confab was at WGA headquarters in LA. A written summary of the proposed deal was distributed, but copies were numbered and had to be returned. No word on what the members will receive prior to – or at? – the membership meetings tonight (Sat. night).

Ratification Process for New Contract

Under the WGA constitution and bylaws, there is a ten-day ratification process and an alternative, 48-hour ratification process. Guild president Patric Verrone indicated that there are burdensome logistical procedures required under the 48-hour process that make it impractical. Thus, they expect to use the ten-day process.

During the ratification process, people will be asked to suspend the strike and return to work pending the outcome of the vote. Many people at the meeting objected to this, and apparently are feeling pressured or even manipulated by the Guild leadership. Nonetheless, a back-to-work resolution is apparently part of the deal the Guild leadership agreed to.

Although people expressed criticism of the deal, my source believes it will pass.

New Media Residuals

Pretty much the same as the DGA deal, with a couple notable exceptions. One difference, as previously reported in the trades and elsewhere, is that the residual for ad-supported streaming is 2% of distributors gross, starting in the third year of the three-year Guild agreement. (For the first two years, the residual is a fixed dollar amount.) The other difference from the DGA deal relates to cable TV; see below.

The promotional window (during which no residuals are due) is still 17 or 24 days, as in the DGA deal, and the formula for paid downloads is unchanged from the DGA deal as well.

Cable Residuals and Minimums

Cable takes it on the chin, in two ways. First, the improved residual rate for ad-supported streaming (2% of distributors gross rather than a fixed dollar amount) applies only to network TV shows streamed on new media (the Internet or cell phones). In contrast, streaming of cable TV shows is subject only to the fixed dollar residual.

Second, basic cable minimums were not increased to the same degree as achieved by the DGA. Specifically, under the DGA deal, directors of high-budget basic-cable programs got a 12% pay increase. However, under the proposed WGA deal, writers of such programs do not receive an equivalent bump. (Note – this issue is not related to new media.)

Given the increasing amount of scripted content on cable (basic cable, such as FX, USA and AMC, as well as pay TV such as HBO and Showtime) – and the decreasing amount on network TV, at least for the time being (since strike-replacement reality programming is occupying time slots formerly held by scripted programming) – it seems shortsighted and unfortunate for cable TV to suffer second-class citizenship.

Favored Nations

If the Screen Actors Guild gets better deal terms in its upcoming negotiations than the writers, will the writers retroactively get the benefit of those improved terms? This is called “favored nations.” (See http://digitalmedialaw.blogspot.com/2008/02/favored-nations.html for discussion.)

The WGA deal, it turns out, has only a limited form of favored nations – it applies only to the new media provisions of the proposed agreement. So, if SAG attains better terms in another area, such as DVD residuals (which SAG has highlighted as an issue it will focus on), the writers would not get the benefit of SAG’s efforts.

This issue may be academic – AFTRA (another, and more moderate, actors union) has announced that it will negotiate separately with the studios, undercutting SAG’s leverage and perhaps reducing the likelihood of any gains. Still, this story is very much in flux, and it’s too early to know whether SAG might nonetheless achieve further benefit.

New Media Jurisdiction

If a professional writer writes original programming for new media, the work will be covered by the Guild agreement, even if the budget levels for the programming are low. This is an improvement over the DGA deal, which covers original programming for new media only above certain budget levels. (Derivative programming for new media – i.e., spinoffs of existing TV shows or movies – are covered regardless of budget level.)

The proposed deal sets minimum compensation levels, though the minimums are not high.

Separated Rights

The proposed deal provides for separated rights in new media. See http://digitalmedialaw.blogspot.com/2008/02/whats-deal.html for an explanation of this concept.

Minimums

Various minimum compensation levels will increase by 3.5% or 3% per year under the proposed deal.

Clip Usage

There are some provisions regarding clip usage that apparently are not favorable to late-night TV writers.

This article first appeared on the Huffington Post today.

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