“Schmucks with Underwood’s” – understanding the WGA strike

By Richard Sloat

This Report investigates the Writers Guild of America and the way it has represented the

interests of writers, specifically those working in television, since its inception. The report

investigates the history of the guild and how through significant labour disputes, contract

negotiations and the consequences incurred the guild has sought residual payments in new

technologies and new forms of distribution. The report, through an understanding of

historic WGA a contract agreements, investigates the climate, negotiations, motivations

and consequences of the 2007-2008 Strike.

It may be sound little redundant to start this report by stating that great television is nothing

without a script or by stating that all narrative fiction begins with the written word but the

role of scriptwriters and the value ascribed to their work has not always reflected their

seminal role in the production of content. Since the early days of television the WGA has

been responsible for bargaining collectively for writers in television, radio and film. At

present the Writers Guild of America (WGA) negotiates a new basic contract with the

Association of motion picture and television producers (AMPTP) by which its most of its

members are employed, every three years. The contract negotiated is called the Minimum

Basic Agreement (MBA) and stipulates among other things the minimum rates of initial

compensation (pay rates) and the minimum residuals.

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On November the 5th 2007 the Writers Guild of America (WGA) staged a walk out that

would last 14 weeks and 2 days (100 days) involve 12,000 writers and cost the economy of

Los Angeles anywhere between 380 million (Anderson School of Management at the

University of California, Los Angeles, cited in new York times article 12/02/08) to 2.1

billion dollars (Jack Kyser cited in Bloomberg article 13/02/08). But before we can

investigate this most recent activity it’s important to understand some elements of the

history of the industry, of the guild itself and of their previous interactions.

The WGA represents the combined efforts of the Writers Guild of America East (WGAE)

and the Writers Guild of America west (WGAW) labour unions. Since its inception The

WGAE has represented writers of live action Television and film centred around New York

and the east coast of the United States. It has it’s origins in the authors league of America

which was formed in 1912 by around 350 magazine, book writers and quickly joined by a

small number of dramatists. When the number of dramatic authors grew in the following

years a dramatist’s guild was established as a part of the Authors league to represent the

specialist needs of its members. In the 1920’s as the motion picture industry grew the

Screen Writer’s Guild was formed although this remained essentially a social club until the

arrival of synchronised sound and a nationwide emphasis on unionism began. The guild

became affiliated with the author’s league in 1933 and by 1939 they began negotiating with

producers for collective bargaining. (wgaeast.org)

When television made a serious appearance in the 1950’s writers working in the new

medium were at first represented by a number of different organisations this situation was

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further exaggerated by the tense political atmosphere of the post war McCarthy era. By

1951 it had become evident that a single organisation couldn’t properly represent authors in

so many disparate fields and so an amicable dissolution came to pass with the birth of two

new entities the WGAE and the WGAW. The WGAW has since that time represented the

same groups as the WGAE but centres its activity on southern California and the west

coast. The two groups have bargained collectively since 1954 (WGA west timeline)

On January 16 1960 the WGA went on its first significant strike, primarily to secure

revenue from the sale or lease of films for television and royalties on repeats on television

programs. It was at the time the longest walkout in Hollywood the history (CBS News,

November 25th 2007); lasting for 20 weeks and 6 days, although it should be noted that

action against the television networks did not begin until March 19 1960. The Screen actors

guild (SAG) were initially on strike at the same time and over much the same issue, but

they returned to work before the writers reached a compromise with the movie companies.

(Multimedia and Entertainment Law Online News, January 22, 2008)

The strike ended and the writers went back to work on June the 10 th of 1960 when Seven of

the eight major studios from the time, Allied Artists, Columbia, MGM, Paramount,

Twentieth-Century Fox, Walt Disney, and Warner Bros agreed a new deal with writers.

Interestingly the 8th major studio, Universal, which was suffering major financial

difficulties at the time had already struck a deal with the guild that meant writers could

resume work on its productions many months before the strike ended, with a caveat that

when it did Universals agreement would shift to the new industry standards. This of course

gave the studio a major advantage over its competitors as well as helping the guild to apply

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pressure to them. Interim agreements of this kind would be a strategy the guild would

utilize 47 years later in an attempt to accomplish the same division of interests (Variety,

December 16th 2007)

The deal which was eventually secured included paying 600 thousand dollars toward health

and pension benefit funds, 5% of studio income generated from the lease or sale films

made before 1960 to television reduced to 2% of income generated on films produced

thereafter. (Multimedia and Entertainment Law Online News)

This can in some sense be considered the guilds first foray into negotiation over a ‘new

media’ as watching films on the ‘small screen’ was a relatively new idea which many

understandably felt would have limited appeal in comparison to the theater experience.

Today of course there are indeed a great many dedicated movie channels on cable and

satellite in addition to the myriad of motion pictures which crop up in terrestrial schedules.

Perhaps the most important development for television writers was a 4% royalty on all

repeats, domestically and internationally, in perpetuity. Prior to 1960 they received 140%

of their minimum rate for the first 5 domestic repeats and nothing thereafter. For example

‘I love Lucy’(1951) had all of its 9 series produced before this agreement and has been

syndicated globally ever since, absolutely none of the vast revenue earned from this in the

last 6 decades has gone to its writers, with the exception of the first 5 domestic showings of

each episode. (Multimedia and Entertainment Law Online News)

That said, until a threatened strike during contract negotiations in 1977 writers right to

residuals were capped after a certain number of reruns, their new contract ensured this limit

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would be removed and writers would receive compensation in perpetuity. In 1981 the guild

went on strike again, this time over the relatively new markets of pay-tv (cable and

satellite) and home video cassettes, after a relatively short walk out of 3 months a

resolution was found and writers received lucrative revenues for repeats on pay-tv.

One year later the Alliance of Motion Picture and Television Producers (AMPTP) was

formed representing a collective bargaining unit for more than 350 producers of motion

pictures and television programs. The AMPTP felt revenues earned by writers in Pay-TV

and Home video were too great and so when contract negotiations began again in 1985 the

AMPTP proposed a new formula for residuals in these markets. (CBS news, nov25 2007)

The AMPTP claimed that there was little money to be made in the Pay-TV market and the

profit that could be made was needed to offset losses in other forms of distribution, Home

Video was at the time mired with high production costs which meant they were

prohibitively expensive to the average user, the AMPTP argued that a cut in residuals was

necessary to make tapes profitable and extend the market. The new formula provided

writers with a great deal less is residuals for Pay-TV (cable). The AMPTP argued that this

was an unproven market with limited profitability and that no contract could be drawn up

that did not include the new revenue model, a strike broke out but the guild was split and

after just 3 weeks the rollbacks were accepted and new deal came into force.

In 1988 the WGA contract once again came up for renewal, the AMPTP pushed for further

rollbacks, scaling down residuals from 1 hour shows like ‘murder she wrote’(1984) when

those programmes were sold or licensed to independent television broadcasters. It should

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be noted at this point that ‘Murder she wrote’ is still in regular afternoon syndication on the

BBC.

In early negotiations the WGA were unwilling to submit to further reductions in residuals

and wanted bigger residual payments on repeats in other countries. Another important

disagreement between the WGA and the AMPTP was the issue of reduced residuals for

home video in which the members of the Guild felt they had been short changed. With

tensions at an all time high on March the 7 th the guild began a strike which would last for a

total of 21 weeks and 6 days, one day longer than the strike of 1960. It involved 9,000

movie and television writers and is to date it is the longest writers strike in history.

As a direct consequence of the strike new series originally intended to begin production in

the autumn of 1988 had to be postponed until the winter. Talk shows such as ‘Late Night

with David Letterman’ (which due to their topical nature were some of the first to feel the

effect of the strike) returned to the air without their writers by having their presenters write

the monologues that begin the show. This is something that would re-occur in the 2007

strike with ‘The Tonight Show with Jay Leno’. Soap operas were able to carry on

production unaffected as they use non union writing staff for their productions something

which was also the case in the most recent activity.

In order to fill increasingly sparse television schedules, the networks relied largely on

repeats but also re-shot old content like the ‘Mission: Impossible’ series based on the

original scripts, they also aired movies as much as possible. Another way to fill schedules

was to produce unscripted ‘reality’ programs like the hugely popular ‘Cops’ (1989) (imdb).

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On august the 8th 1988 the strike ended when the guild agreed by a vote of 2,111 to 412 to

accept a new contract with the AMPTP. The deal provided very small gains for one hour

shows sold abroad, the previous formula had paid writers a maximum of around 4400

dollars for a one hour show, the new formula gave writers the option to instead receive 1.2

percent of foreign sales. Writers of TV movies and original screenplays were also awarded

greater creative control of their work.

In exchange for these benefits and preventing further rollbacks the guild agreed to

reductions in residuals from domestically syndicated one hour shows. More crucially they

agreed to disregard the first 80% of revenue from VHS tapes. The elements which helped

sway the guild to accept this massive cut was the understanding that Home Video as a new

media had an untested revenue stream and an agreement to re-evaluate the agreement when

the media involved had become more established and production costs had dropped. On the

remaining 20% of sales the WGA accepted 1.2% of revenue, this works out to roughly

0.48% of the retail price

In the years that followed the home video market grew exponentially, the Video Home

System (VHS) cassette format became dominant and as demand increased so did

production. Increased production volumes radically reduced the cost of producing tapes

making them far more profitable for producers, in fact by 1998 American consumers were

spending 18 billion dollars a year on VHS tapes although the same formula for writer’s

residuals applied. Production costs dropped again in 1996 when the Digital Versatile Disc

DVD format debuted and by 2003 when the format had matured American consumers were

spending 22.2 billion dollars on both formats combined adding around 4 billion dollars in

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consumer spending to the industry without adversely affecting theatre ticket sales. (New

York Times, April 20th 2004) Despite these massive changes in the home video market the

promised re-evaluation of royalties was never made, this became a huge source of

resentment among writers and would become a very important part of the 2007-2008 strike.

While, as we will find out, the cuts agreed by writers proved to be disastrous in the long

run and financially difficult in the short term, the cost to producers was huge, not only in

losses of potential earnings(estimated cost to the entertainment industry as a whole was

500million) but in the numbers of viewers who switched from broadcast TV to other forms

of media, in fact one of the side effects of the strike was an increase in the popularity of

Cable which at the time relied on far fewer new scripts and so was able to operate during

the strike with very few compromises. It’s believed that broadcast TV has been unable to

recapture as much as 10% of its audiences to this day. Although as the walkout ran from

the spring when television production usually winds down until the summer, when repeats

usually fill the schedules, meant that strike actions did not have as much impact on the

industry as they may have if it had started in the winter as the 2007 strike would.

The following years went by without a strike, perhaps because of the deal that was signed

or perhaps because of the significant cost to both writers and producers incurred. It is by

understanding this history of these strikes and contract negotiations and the effect they

would have in the years that followed that we can begin understand the issues at the heart

of the strike of 2007-2008.

One of the prime issues was a reformulation of DVD residual formula which had started

life in 1988 in regard of VHS tapes and continued to be implemented by studios after the

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switch to the more profitable DVD format. In the 19 years since the introduction of a cut of

80% of writer’s residuals due to the untested and expensive nature of video in the late 80’s,

the promised readjustment had never happened.

The WGA requested a doubling of the residual rate on DVD’s from 0.3% to 0.6% of the

reportable gross for the first million and from 0.36% to 0.72% on gross earned over 1

million. The WGA argued that these concessions were essential as residual payments are

important for writers as they provide income during periods of unemployment common in

the industry. Indeed according to the WGA half of all its members are unemployed at any

one time.

By far the most important issue for the guild and the one which proved to be the most

divisive was what the guild called ‘Non traditional media’ which would come to be known

as ‘new media’. More specifically a system which paid royalties to writers for TV and

Theatrical content used on the internet, mobile phones and any other form of delivery

system not previously covered by the MBA at a rate of 2.5% of the distributors gross

income. According to the guilds proposals;

“This is the simplest and fairest way of compensating our members for their creative

contribution, and one which permits the companies maximum flexibility in the

development of this business model” (WGA Contract 2007 Proposals)

Before the strike the studios were paying nothing for “free to user” streaming sites such as

“southparkstudios.com”, “thedailyshow.com” and “hulu.com” (which launched just after

the conclusion of the strike). Although the content of these sites, including full episodes of

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shows, are free at the point of delivery they feature not only banner advertising in the style

of Youtube.com but often television style adverts played before and sometimes in the

middle of content. For content which users pay to download from websites like I tunes and

Amazon’s “unbox” the producers were paying the DVD residual rate of 0.3%.

The AMPTP argued as it had for home video that the internet was an unproven market with

little money to be made and that material on ad supported streaming sites was promotional.

This is interesting when we consider that Viacom who own comedy central announced 500

million in profits from its internet ventures just before the strike, and also sued

youtube.com for one billion dollars for loss of earnings due to copywrite violations in

regards to its content. (BBC News, Tuesday 13th march 2008)

In addition to residuals for re-use of TV and Theatrical content on the internet the guild

proposed minimum pay rates for writers producing for-internet content match those in

television. Before the strike a side-letter to the MBA negotiated in 2001 permitted a deal

which guarantees no minimum pay rate, separated rights, credit, or residuals but did

include the standard provisions for pension and healthcare. Between 2001 and the strike the

guild had managed to negotiate conditions which met with their proposals in relation to for-

internet content relating to the series ‘lost’.

Many felt this demand had a lot to do with the Guild not making the same mistakes it had

in the DVD market (Los Angeles Times, October 20 th 2007). Of course the Guild had made

the issues of new media and new revenue streams important in strikes before, it felt it was

more about the future profitability and dominance of on-line content rather than its short

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term growth. Best summed up by the guild: “the internet IS television” (WGA Contract

2007 Proposals)

The WGA proposed that all animation writers should fall under the MBA with the

exception of those already covered by different labour unions. Despite the job of writing

being exactly the same in animation and the vast majority of animated programming being

written by at least one WGA member, animation writers have never been under the

jurisdiction of the Guild.

Another, more curious issue in the strike was an expansion in jurisdiction over reality

productions. The guilds argument was that although most reality shows feature little to no

scripted material and no writing staff the process of creating interesting scenarios and then

creating a narrative complete with characterisation, conflicts and resolutions from the raw

footage, fell under it’s contract. In fact the employees whom the WGAW had been trying to

unionize since 2004 work it what is commonly known as the ‘story department’. In 2006

the WGAW organised a walkout at the production offices of ‘America’s Next Top Model’.

One of those on strike, Kai Bowe described their role to USA Today in the following

terms, (USA Today, 8th October 2006, Picket line, Not Catwalk, at ‘Top Model’)

"We look at primary characters, maybe look at who is being eliminated that week, and craft

an arc so that their elimination is either something the viewers are sad about or happy

about"

There may be another motive for the guild to want to expand its influence over reality and

animation as in times of strike these programs have a much more important role in

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providing original content for audiences. If a WGA strike, or the threat of one, was to

include these groups the impact on the industry would be huge as they are staples for new

programming during times of strikes.

Other proposals included an increase in basic pay rates, a provision that writers be

consulted about product placement and have influence in decisions, The application on

MBA rates to programming made for basic cable not just high budget subscription channels

like HBO, Annual funding to continue the show runner training program, The application

of prime-time rates of initial compensation to the CW network, An increase in residuals for

programming made for pay TV by adopting the pre-existent Directors Guild of America

(DGA) rate and an increase of the caps on pension & health care contributions.( WGA

Contract 2007 Proposals)

On October the 25th 2007 negotiations between the WGA and AMPTP began in preparation

for the contracts for both the WGAE and WGAW to expire on October 31 st. But Talks soon

broke down over issues of royalties for digital content and DVD. When both contracts

expired the guild held a vote and of 5507 members 90% approved strike action. At a press

conference held that day it was announced that all writers would stop work on Monday the

5th of November at 12:00am. At the conference Patric Verrone president of the WGAW

claimed that the AMPTP had ignored key proposals on issues such as DVD residuals, New

media(including original made for internet productions and internet reuse of TV and

Theatrical content), and expanded jurisdiction. Verrone stated,

"Rather than address our members' primary concern, the studios made it clear that they

would rather shut down the town than reach a fair and reasonable deal,"

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Within hours The President of the AMPTP Nick Counter responded by stating that;

"The WGA's call for a strike is precipitous and irresponsible,"

After the strike was announced the guild maintained that it was still open to negotiations,

committee Chief John Bowman said "We don't want to strike. What we really want to do is

negotiate." Later that it was announced that last minute talks with the AMPTP would

resume on Sunday the 4th. (Variety, November 2nd 2007) These last ditch efforts to avoid a

strike failed as negotiations broke again around issues of new media and DVD revenues.

Even as the WGA were in negotiations they were organizing picketing Nick Counter

commented in a statement that evening;

"Notwithstanding the fact that negotiations were ongoing, the WGA decided to start their

strike in New York. When we asked if they would 'stop the clock' for the purpose of

delaying the strike to allow negotiations to continue, they refused. We made an attempt at

meeting them in a number of their key areas, including Internet streaming and jurisdiction

in new media. Ultimately, the guild was unwilling to compromise on most of their major

demands. It is unfortunate that they choose to take this irresponsible action."

(Broadcasting and Cable, 5th November 2007)

The guild responded to the statement saying that they had temporarily withdrawn the

proposals in regard to DVD residuals which the AMPTP felt was a problem in negotiations

but claimed the AMPTP was still insistent that among other things that the guild have no

jurisdiction for most new for-internet writing, that internet downloads would have residuals

paid at the DVD rate and that no residual would be paid on streaming content. The guild

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claimed that a proposal from the AMPTP that would allow them to use complete movies

and TV shows as promotional material without paying any residuals at all. In regard to the

AMPTP ‘promotional’ proposal the guild stated that “this alone destroys residuals”

(Writers Guild of America, November the 4th 2007)

It had been expected that if a walkout would happen, the guild would work without a

contract until June 2008 to align them with the Screen Actors Guild (SAG). (New York

Times, September 1st 2007) But many felt that anticipating a strike, producers had been

stockpiling scripts and accelerating production schedules in order to minimize the impact

of the missing writers, much as they had done other times that strikes had been threatened

(variety, December 19th 2006). The guild felt it needed to move quickly to exploit their

asymmetric relationship with the AMPTP. In addition to minimizing material stockpiled by

the studios an earlier had the potential to cause more impact because of it’s relation to

normal cycles of television production, a lesson learned from the 1988 strike which started

in early march. It was also felt that the producers had made themselves vulnerable to a

November strike by scheduling filming well into 2008 (New York Times, September 1st

2007)

As with previous strikes some of the first television shows to go off air were talk shows

which use the greatest amount of material, usually on a topical basis. A good example of

this, and one I will come back to, was “the daily show: with Jon Stewart” like other talk

shows it went off air as the strike began (BBC News, November the 3rd 2007)

On November the 9th The WGA held a 90 minute rally outside the fox studio, in century

city LA, around 4000 members of the WGAW and other supporters were in attendance.

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The event featured speeches from guild president Patrick Verrone, veteran actor Alan

Rosenberg, civil rights campaigner Rev Jesse Jackson and Seth Macfarlane the creator of

‘Family guy’ and ‘American dad’. (Variety, November the 9th 2007) Verrone summed up

the purpose of the strike and the feelings of many of the guilds members;

“We took a bad deal in cable 25 years ago; we took a terrible deal in video 20 years ago.

Now is our shot at new media, we wont get fooled again, we wont get boned again”

(Youtube.com, November the 9th 2007)

Seth MacFarlane who despite working in animation is a WGA member thanks to a 3 Day

walkout of all Fox animated shows which started on the first day of production for ‘Family

guy’ and meant that all Fox animated sitcoms could join the Guild. During his speech

MacFarlane explained why he thought the originally resistant studio had given in so

quickly;

“Because they knew they were screwing us. They were just waiting for us to make a little

noise about it. They never would have made the offer on their own; that would’ve been bad

business” (Youtube.com, November the 9th 2007)

MacFarlane used this point to argue just why the strike was necessary for writers to get

royalties for their work, drawing parallels with Novelists and Musicians. He also

commented that only 3 days into the WGA strike all of the assistants for ‘family guy’ had

been fired, something he sarcastically referred to as ‘a classy move’. WGAW executive

director David Young noted that the strike enjoyed the support of every other writer’s guild

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in the English-speaking world not to mention a myriad of other unions including the SAG

and the Teamsters. (Variety, November the 9th 2007), (RedOrbit, 21st of November 2007)

On November the 14th striking writers for The Daily Show posted a video on youtube.com

called ‘not the daily show, with some writer’. The video is presented by Jason Ross, one of

the daily show’s 14 full time writers and was recorded on a picket line in New York.

The video takes the form of a mock news bulletin in the style of ‘The Daily Show’ (1996)

style and goes on to explain the writers position in the strike and focuses on Sumner

Redstone the CEO of Viacom, which owns comedy central, highlighting apparent

hypocrisy between the AMPTP claiming that new media is untested and as yet unprofitable

and then suing you tube for 1 billion, the writers used footage of Redstone and other

interviews to reinforce their point. Since it was posted the video has received over 600

thousand hits on youtube.com (Youtube.com, November 14th 2007an interesting imbalance

was created; without writers of their own the AMPTP had no way to respond in kind. This

video was one example of striking writers producing content about the ongoing action but

there were many others which were part of a strategy by the guild to win public support for

the writers. (BBC News, November 22nd 2007)

On November the 16th there way a ray of hope for a speedy resolution to the strike, both the

WGA and the AMPTP released identical press statements saying;

“Leaders from the WGA and the AMPTP have mutually agreed to resume formal

negotiations on November 26. No other details or press statements will be issued.”

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The talks came about when Nick counter of the AMPTP reversed a decision not to

negotiate with the WGA while the writers were on strike, although subtle third party efforts

had been made to get talks restarted since the start of the walkout. (La Weekly, November

22nd 2007)(Variety, November 16th) Hope was short lived as talks broke down again on

December the 7th when the AMPTP said it would not sit down for official negotiations

unless the guild were willing to disregard six of their key proposals including authority to

organize writing staff on animation projects and those from the ‘story department’ of

reality shows. Until this stage of the strike they key issues had been those around residuals

for ‘new media’ and DVD.

It was soon after talks broke down that Worldwide Pants the company run by talk show

host David letterman and which is responsible for producing his show “late night with

David Letterman” expressed an interest in dealing directly with the guild in order to

arrange an interim agreement. This was reminiscent although not in scale to the deal the

guild had made with universal studios in 1960 and as Worldwide pants is an independent

producers it could make such an arrangement without being affected by the WGA-AMPTP

talks(CBC News, 16th of December 2007). This was the first indication of what would

become an important WGA strategy, interim agreements made with independent producers.

On November 22 2007 a group of WGA members began posting information films starring

well known Hollywood actors from the Screen Actors Guild. The adverts, which can be

seen as another way of the WGA garnering public support for the strike, featured high

profile actors unable to speak including. Sean Penn, Alan Cumming, Jay Leno, Jason

Alexander, Harvey Keitel, Tina Fey, Tim Robbins, Gary Marshall, David Schwimmer,

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Julia Louis-Dreyfuss, Martin Sheen, Josh Brolin, Charlize Therone, Andre 3000, Jane

Fonda, Kate Beckinsale, Marisa Tomei, Ethan Hawke, Minnie Drive and Philip Seymour

Hoffman. (Youtube.com, November 29th 2007)(Speechlesswithoutwriters.com)

It as announced on the 21st of December that like other talk shows like Jay Leno, Conan

O’Brien and Jimmy Kimmel, the Daily show and the Colbert return without writers In a

joint statement about their return to the air Jon Stewart and Steven Colbert said:

“We would like to return to work with our writers. If we cannot, we would like to express

our ambivalence, but without our writers we are unable to express something as nuanced as

ambivalence”

The guild commented on the announcement stating that comedy central, which is part of

Viacom was forcing Stewart and Colbert back on the air and stating that it “will not give

viewers the quality shows they expect” (BBC News, December 21st 2007) On January the

7th the daily show and it’s spin off the Colbert report returned to the air after a 2 month

hiatus but without their writers.

The show’s host, WGA member and union advocate Jon Stewart opened the show by

commenting on the lack of writers and sporting a “writer’s strike solidarity uni-brow”. He

then announced that the show would be known as ‘a daily show with Jon Stewart’ because

‘the daily show’ is a program made wide array of people including writers. With the

exception of a 2 minute segment relating to the ongoing presidential election, which would

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become a focus of the show while the strike was on, the entire episode was dedicated to

issues in and around the strike.

Stewart seemed to be in support of striking writers but joked that as talk shows had been

off the air for nine times longer than they did after the September 11 th terrorist attacks,

Stewart joked that the writers strike was now "nine times worse than September 11th"

In an interview with Ron Seeber at the end of the show Stewart mentions that he tried to

get a interim deal through the WGA but was rejected despite having the support of comedy

central (The Daily Show, January 7th 2008). Seeber is a Professor of labour relations at

Cornell University and their expert on conflict resolution; he commented that the strike was

as much about social justice as it was about money;

“the social justice part of it is getting the fair share of the return for intellectual property,

and everybody tries to do that, it’s a big issue globally, it’s a big issue for the writers here,

in some ways they’re trying to get ahead of the technology curve if you will, in that sense

its courageous to do that and think that far in advance”

This issue of social justice will become important later when reflecting on the success or

failure of the strike from the guilds perspective. On the 19th of January 2008 the AMPTP

and WGA agreed to resume informal talks with the aim of re-starting formal negotiations

(UPI.com, January 22nd 2008). These informal talks were like those which began on

December the 7th were subject to a media blackout with no WGA members reporting events

or negotiations to the press however on the 22nd of January Patric Verrone stated that the

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guilds proposals relating to animated and reality content had been dropped. (La Weekly,

November 22nd 2007)

On January 24th striking writers from ‘the daily show’ and ‘the Colbert report’ staged a

mock hearing (Youtube.com 24th January 2008) in Washington DC for the press. One of

the most salient points made was by a writer quoting a report by the now former investment

Bear Stearns which stated that the cost of the gap between the WGA and AMPTP was

around 120 million. He went on to say that for paramount to cave into every one of the

WGA’s demands would only cost 4.66 million dollars;

“That’s half the amount it takes to get Reece Witherspoon into a movie, what is more

important for a movie, a script or half of Reece Witherspoon?”

On February 2nd 2008 despite a news blackout there were many reports in the media of

significant progress being made in drawing up a new deal. (New York Times, February 2nd

2008) Some members were concerned about reports that the offer would include a 17- to

24-day free usage window for promotional purposes.

February 5th 2008 the WGA scheduled a meeting for members to be held on Saturday the

9th to get feedback and discus the new contract offered by the AMPTP (Variety, February

5th 2008), For many people the most important line in the proposed contract was this one:

“The WGA is recognized as the exclusive bargaining representative for writing for new

media (such as Internet or cellular technology)”.

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This means that if a professional writer, defined as anyone with a solo TV or screen credit,

13 weeks of employment as a writer in TV, film or radio, a professionally produced stage

play credit or a published novel, writes new programming for non traditional distribution

such as the internet the work would be covered by the guilds MBA but only if they met

budget requirements which are relatively low compared with normal television production;

the program would have to be over 15 thousand dollars per minute of screen time, 300

thousand dollars per single production and 500 thousand dollars per series.

Some writers criticized these levels as high, but there is argument that studios which

provide original new media content and operate on low budgets have to compete with the

likes of youtube.com and Dailymotion.com which utilize free user generated content. It can

be argued that MBA coverage in these situations would impede producers. It should also be

considered that many feel as the internet becomes a more important avenue of distribution

Budgets as a whole will increase making these limits more attainable for normal shows.

Works for new media which are derivative of existing media such as spin offs from TV

shows will also be covered by the MBA regardless of their budget level,

The contract included relatively low minimum rates of pay for writing for-new media

productions on a per minute basis, ranging from $618 for derivative dramatic programs up

to two minutes, plus $309 for each additional minute, $360 for comedy-variety and daytime

serials programs up to two minutes, plus $180 for each and $309 for all other derivative

programs up to the two minute limit and $155 for each minute after that. (WGA Deal

summary) The rates of pay quoted are not great in TV terms but are a welcome change

when it’s considered that writers would normally be compelled by producers to write this

Richard Sloat 21

content for free. The deal would also provide provisions for writers credits on made for

new media productions, a writers credit would have to appear on screen or via a link if any

one else receives a credit.

In the new agreement payment of residuals would be handled for Made-for new media

productions would work in the following way. For original works, writers pay would cover

26 consecutive weeks of consumer paid exhibition and ad supported streaming, which

would mean no residual payments until after the 26 weeks when writers receive 1.2% of the

distributors gross. However, if that program is budgeted below 25 thousand dollars per

minute of screen time no residual is payable. When original new media programs are

reused on television, residuals for television programs would apply but with some

modifications.

For derivative made for new media productions Initial compensation covers 13 consecutive

weeks of ad-supported exhibition and 26 consecutive weeks of consumer-paid exhibition.

After that reuse on ad-supported platforms before one year of expiration of the 13 week

period requires payment of small fixed residuals; after the one-year period, the rate is 2%

of the distributor’s gross. When the material is repeated on consumer-paid platforms after

the 26 week period, the rate is 1.2% of the distributor’s gross.

When derived new-media programs are repeated on television, the residual rates for

television programmes apply. Now to one of the most critical aspects of the new deal, the

re-use of television programs and movies in new media,

Richard Sloat 22

When a viewer downloads a show or movie, essentially buying it to keep, a residual of

0.36% of the distributors gross for the first 100,000 downloads of television programs and

the first 50,000 of a feature. For downloads in excess of these figures a residual of 0.7%

applies for TV and 0.65% for feature films. The thresholds are high with the market as it is

but as downloads become more popular as both the WGA and AMPTP expect, those levels

will become more attainable.

Residuals would be paid at 1.2% of the distributors gross for download rentals where the

viewer pays to have access to a show for a limited amount of time, Download rentals for

example. (WGA Deal summary)

All advertising supported streaming of feature films produced after July 1st 1971 would be

subject to the same residual of 1.2% of distributors gross. Where television programs made

after 1977 are streamed a residual of 2% of distributors gross would be payable, however

this only applies to literary material written up to the 13 th of February 2008. Material

written after that date is covered under Television Ad-Supported Streaming for New

Programmes. In this instance There would be an initial “streaming window” of 17 to 24

days where no residual is payable. This is of course a problem for writers, because most

viewing will happen just after the show is premiered, since viewers are unlikely to wait 2-3

weeks before they watch programs they missed at the time of broadcast, or as is becoming

more common they choose to download the show as it premieres.

After the 17 to 24 day streaming period, a residual would be payable. For prime time

network shows, the formula would work in the following way: in the first year or second

year of the 3 year WGA contract the residual paid is a percentage of the applicable TV

Richard Sloat 23

residual base, (WGA Deal summary) Which roughly translates into a fixed residual of

$700-$800 annually for half-hour shows and $1400 for hour long shows. In an interview

conducted later signed Michael Winship head of the WGA commented about the 17-day

window agreement stated in the contract:

“We would have liked to have closed that window completely. That is one of the things we

did not achieve in this contract and something we will be working on going forward. The

important thing is that we got jurisdiction in new media, we got jurisdiction in the Internet

and we got a percentage of the distributors’ gross. These were our major goals and we

achieved those.” (Inside Cable News, February 11th 2008)

In the third year of the new deal, the residual payable would be 2% of distributor’s gross,

However distributor’s gross is fixed at a maximum of 40 thousand dollars for one-hour

programs and 20 thousand dollars for half-hours, which actually results in a fixed residual

of $800 for hour long shows or $400 for half hour shows. (Digital Media Law, February

21st 2008),

As part of the deal the AMPTP and Networks would increase funding for this programme

to: $225,000 for year one of the MBA; $150,000 for year 2; and $150,000 for year 3.

(WGA Deal summary) The new deal also featured provisions for Transparency; the

agreement specifies that studios and networks would have to provide the Guild with new

media contracts and distribution statements, without deletions, and usage data. New media

residuals based on transactions which happen between different branches of the same

business would have to be based on the fair market value.

Richard Sloat 24

However these concessions may sound many elements of the new deal were notable by

their absence, the issue of jurisdiction over reality and animation writers had been dropped

in January (TVoholic.com, January 23rd 2008), WGAE head Patric Verrone commented on

the exclusion of animation and reality TV writers;

“We certainly heard from them and it was a heartbreaking thing for me as an animation

writer…Those writers are more or less the sweatshop writers in this industry and our hope

going forward is that we can improve that situation and get coverage from them.” (Inside

Cable News, February 11th 2008)

The proposal to double DVD residuals seemed to have been taken off the table as early as

November when it was provisionally removed by the WGA. These major concessions

coupled with a very small raise for writers working for basic cable, mean the guild had to

pay dearly to win its fight for jurisdiction over the internet. The small rise for basic cable

writers is unfortunate considering how much more scripted material is used on cable when

compared to network broadcasts which are more prone to rely on reality productions.

(PaidContent.org, February 9th 2008)

On February the 10th the guild initiated a 48 hour vote for guild members on a motion to

end the strike. On the 12th WGAE president Patric Verrone announced that 92.5% of

members voted to end the strike. On February the 26th another vote was held and

approximately 93% of the guilds members voted to accept the new 3 year contract. The

next day Verrone and Michael Winship were interviewed on Fox business news, Winship

addressed concerns that distributors would simple not repeat programs after the 17 day

window has expired;

Richard Sloat 25

“I think that they will (repeat the shows) because they’ll recognize the value of those

programs being on beyond that window.”

With the gory details of the strike and its eventual resolution behind us we can examine the

success of the strike. To do this we’ll need to consider a number of aspects; in moral terms

many members felt that the strike was worthwhile in securing social justice for writers by

getting WGA jurisdiction over new media. When based upon this principal the strike

worked and the WGA represented writer’s interests well. In a New York Times article

Tony Gilroy, the writer and director of “Michael Clayton,” expressed what many

beleaguered writers felt about the strike.

“As writers and directors, we have our nose in the tent for real for the first time….

….There are question marks about how it will be implemented, but there is no one who can

argue that the strike was not necessary. We would never be in the position we are without

it. Anybody who says the strike was a bad idea is dead wrong.” (New York times, February

12, 2008)

However this is just one aspect of the strike, in financial terms the strike had no winners. In

a Newsweek article just after the strike S.Mark Young who is a business professor at the

University of Southern California predicted the loss to the economy of California to be 3.5

billion dollars;

“We know restaurants have lost business, laundry services are hurting, limo drivers aren't

driving nearly as much. Also, the Milken study assumed the Screen Actor's Guild would

Richard Sloat 26

also strike. They haven't. So, taking that into consideration, after almost four months, we're

looking at somewhere around $3.5 billion.”(Newsweek, February the 13th 2008)

Young’s comments about job opportunities also seem to indicate bad news for writers as

well as other production staff, who often get a lot of their work from ‘pilot season’. He

suggested that major networks would be reconsidering how they'll select programming for

the all important ‘fall season’ where new shows are presented. Historically, there's a pilot

season that goes on for the first four months of the year where initial ‘pilot’ episodes of the

programs are made and tested with audiences. It’s an expensive process and one which

typically requires all the same crew and budget as a normal episode. Young indicated that

because of the strike the major networks would start to ask for shorter lower budget pilots;

“In some cases they'll call for demos, where you use existing sets, and [shoot just] 10 to 15

minutes instead of the full 22 minutes that a sitcom runs. If you begin to cut pilots by 50

percent, right out of the gate a lot of these folks that would normally be trying to write for

pilots are not going to have that opportunity anymore. And once it's gone it could be a

permanent change in the landscape. So those folks are going to be out of work”

(Newsweek, February the 13th 2008)

It can be argued that the strike enabled the guild to demonstrate after nearly 20 years that it

was capable of striking, showing a united front to producers, and establishing jurisdiction

in new media which the guild can expand upon, it can also be said that if the guild were not

willing to strike they may have lost a lot more. However only history will tell how good or

bad the deal the writers got after 3 months of strikes, both in the way that new media

Richard Sloat 27

develops as a monetised distribution system in the next few year and in the strength of the

deal the WGA can get when contracts expire in 2010 and negotiations start again.

Word count: 7800

Richard Sloat 28

BBC News, February 13th 2008, Q&A Hollywood writers strike

http://news.bbc.co.uk/1/hi/entertainment/7092571.stm

New York Times, February 12th 2008, Writers vote to end strike, Michael Cieply

http://www.nytimes.com/2008/02/12/business/media/12cnd-strike.html?_r=1

Bloomberg, February 13th 2008 Hollywood Writers Return to Work After Ending Strike,

Michael White and Andy Fixmer

http://www.bloomberg.com/apps/news?pid=20601103&sid=aKdwR9oC54WM

Multimedia and Entertainment Law Online News, January 22, 2008, Film/TV Business:

Writers' Strike Pt. 2, Howie Cockrill

http://beatblog.typepad.com/melon/2008/01/filmtv-busine-1.html

Variety, December 16th 2007, WGA seeks to avoid AMPTP: Writers try one on one talks

http://www.variety.com/article/VR1117977822.html?categoryid=2821&cs=1

A Brief History: A look back at how the WGAE came to be.

http://www.wgaeast.org/index.php?id=318&tx_ttnews%5Btt_news%5D=499&tx_ttnews

%5BbackPid%5D=109

Historical timeline of the WGAW

Richard Sloat 29

http://www.wga.org/history/timeline.html

CBS News, November 25th 2007, A writers tale of picket lines past, Mark Evanier

http://www.cbsnews.com/stories/2007/11/20/opinion/main3528835.shtml

New York Times, April 20th 2004, Studios Rush To Cash In On DVD Boom; Swelling

Demand for Disks Alters Hollywood's Arithmetic, Sharon Waxman

http://www.nytimes.com/2004/04/20/movies/studios-rush-cash-dvd-boom-swelling-

demand-for-disks-alters-hollywood-s.html

New York Times, august 8th 1988, Writers ratify contract, ending longest strike, Aljean

Harmetz

http://www.nytimes.com/1988/08/08/movies/writers-ratify-contract-ending-longest-

strike.html

New York Times, September 1st 2007, To strike or not? Hollywood’s Next Drama

http://www.nytimes.com/2007/09/01/movies/01labo.html?

_r=4&oref=slogin&oref=slogin&oref=slogin

Los Angeles Times, October 20th 2007, Writers guild votes 90% in favour of strike,

Richard Verrier

http://articles.latimes.com/2007/oct/20/business/fi-ballot20

Richard Sloat 30

USA Today, 8th October 2006, Picket line, Not Catwalk, at ‘Top Model’

http://www.usatoday.com/life/television/news/2006-08-10-reality-tv-strike_x.htm

Multimedia and Entertainment Law Online News, January 21, 2008, Film/TV Business:

Writers' Strike Pt. 1, Howie Cockrill

http://beatblog.typepad.com/melon/2008/01/filmtv-business.html#more

Variety, November 2nd 2007, Writers call for strike: Union, Producers to resume talks

Sunday, Cynthia Littleton, Dave McNary

http://www.variety.com/article/VR1117975256.html?categoryid=10&cs=1

Variety, December 19th 2006, Studios brace for life without scribes, Dave McNary

http://www.variety.com/article/VR1117956115.html?categoryid=18&cs=1

WGA Contract 2007 Proposals

http://www.wga.org/contract_07/proposalsfull2.pdf

Broadcasting and Cable, 5th November 2007, Strike Begins: WGA to Picket Monday after

Sunday-Night talks break off, Ben Grossman & John Eggerton

http://www.broadcastingcable.com/article/111060-

STRIKE_BEGINS_WGA_to_Picket_Monday_After_Sunday_Night_Talks_Break_Off.php

Richard Sloat 31

Los Angeles Times, November 1st 2007, show tracker: what you’re watching: a line in the

sand

http://latimesblogs.latimes.com/showtracker/2007/11/their-entire-st.html

Writers Guild of America, November the 4th 2007, The latest word – Negotiations update

http://www.wga.org/subpage_member.aspx?id=2540

Variety, November the 9th 2007, Writers stage big rally, Dave McNary

http://www.variety.com/article/VR1117975682.html?categoryid=2821&cs=1

Youtube.com, November the 9th 2007, WGA strikes!

http://www.youtube.com/watch?v=JPXI5vKzQys

Media Daily News, December 24th 2007, Report Puts Another Digit On TV Writers Strike,

But Main Issue Is Digital, David Goetzl

http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=73247

RedOrbit, 21st of November 2007, Various labor unions join WGA rally

http://www.redorbit.com/news/technology/1152529/

various_labor_unions_join_wga_rally/index.html

La Weekly, November 22nd 2007, Secret Agent Men, Nikki Finke

http://www.laweekly.com/2007-11-22/news/secret-agent-men/

Richard Sloat 32

Variety, November 16th, Writers, studios agree to talk, Dave McNary

http://www.variety.com/article/VR1117976211.html?categoryid=2821&cs=1&nid=2854

CBC News, 16th of December 2007, U.S screenwriters guild to negotiate with individual

companies

http://www.cbc.ca/arts/tv/story/2007/12/16/writers-union-companies.html?ref=rss

Youtube.com, February the 12th 2008, Writers vote to end WGA strike

http://www.youtube.com/watch?v=q3GDcoBonr4

Youtube.com, November the 5th 2007, why we fight, WGA America

http://www.youtube.com/watch?v=oJ55Ir2jCxk

Variety, February 5th 2008, WGA schedules Saturday meeting, Dave McNary

http://www.variety.com/article/VR1117980231.html?categoryid=2821&cs=1

Variety, February 3rd 2008, Strike: an end in sight?, Dave McNary

http://www.variety.com/article/VR1117980100.html?categoryid=2821&cs=1&nid=2565

New York Times, February 2nd 2008, Progress toward ending writers strike, Micheal

Cieply

http://www.nytimes.com/2008/02/02/business/media/02cnd-writers.html?_r=1

Richard Sloat 33

BBC News, Tuesday 13th march 2008, Viacom will sue youtube for $1bn

http://news.bbc.co.uk/2/hi/business/6446193.stm

Huffington Post, December 27th, 2007, WGA Strike primer: Alec Baldwin swings and

misses

http://www.huffingtonpost.com/robert-j-elisberg/wga-strike-primer-alec-_b_78424.html

UPI.com, January 22nd 2008, WGA, Producers set to begin informal talks

http://www.upi.com/Entertainment_News/2008/01/22/WGA-producers-set-to-begin-

informal-talks/UPI-98791201048779/

Inside Cable News, February 11th 2008, FBN on the WGA settlement

http://insidecable.blogsome.com/2008/02/11/fbn-on-the-wga-settlement/

Guardian.co.uk, 30th January 2008, Writers Guild to put words in Grammy presenters

mouths, Sean Michaels

http://www.guardian.co.uk/music/2008/jan/30/film.news

TV by the numbers, February 14th 2008, the “strike effect” through February 4-10, 2008,

Bill Gorman.

http://tvbythenumbers.com/2008/02/14/the-strike-effect-through-february-4-10-2008/2666

Richard Sloat 34

TVoholic.com, January 23rd 2008, WGA takes animation and reality jurisdiction off the

table!

http://tvoholic.com/news/wga-takes-animation-and-reality-jurisdiction-off-the-table/

Huffington Post , December 19th 2007, WGA Strike: A more optimistic scenario, Jonathan

Handel

http://www.huffingtonpost.com/jonathan-handel/wga-strike-a-more-optim_b_77615.html

Digital Media Law, December 17th 2007, WGA Strike: How to restart the talks, and why,

Jonathan Handel

http://digitalmedialaw.blogspot.com/2007/12/wga-strike-how-to-restart-talks-and-why.html

BBC News, December 21st 2007, Daily show to return in January

http://news.bbc.co.uk/1/hi/entertainment/7155335.stm

BBC News, February 13th 2008, Writers prepare to return to work. Peter Bowes

http://news.bbc.co.uk/1/hi/entertainment/7242232.stm

Mock AMPTP website,

http://www.amptp.com/

Official AMPTP website

http://www.amptp.org/

Richard Sloat 35

NPR, December 21st 2007, Daily show to resume Despite writers strike

http://www.npr.org/templates/story/story.php?storyId=17494992

Youtube.com 24th January 2008, Daily Show & Colbert Report Writers in Mock WGA

Debate

http://www.youtube.com/watch?v=g-xU-4dI1JM

Campus Progress, January 24th 2008, State of their union, Bobby Allyn, Zach Pentel, and

Brendan Polmer

http://campusprogress.org/fieldreport/2440/video-state-of-their-union

BBC News, November 13th 2007, producers speak out over strike

http://news.bbc.co.uk/1/hi/entertainment/7092201.stm

The Daily Show, January 7th 2008, introducing a daily show

http://www.thedailyshow.com/video/index.jhtml?videoId=147108&title=Introducing-A-

Daily-Show

BBC News, November 22nd 2007, Striking US Writers Get creative, Neil Smith

http://news.bbc.co.uk/1/hi/entertainment/7105994.stm

Youtube.com, November 14th 2007, Not the daily show, with some writer

http://www.youtube.com/watch?v=PzRHlpEmr0w

Richard Sloat 36

PaidContent.org, February 9th 2008, WGA tentative Agreement: language on new media

http://www.paidcontent.org/entry/419-wga-tentative-agreement-language-on-new-media/

Digital Media Law, February 21st 2008, WGA deal details, Jonathan Handel

http://digitalmedialaw.blogspot.com/2008/02/wga-deal-analysis.html

WGA.org, February 21st 2008, Tent Summary PDF,

http://www.wga.org/contract_07/wga_tent_summary.pdf

Variety, February 10th 2009, Industry vets reflect on WGA strike, Dave McNary

http://www.variety.com/article/VR1117999950.html?categoryid=1066&cs=1

New York Times, February 12th 2008, Who won the writers strike?, David Carr

http://www.nytimes.com/2008/02/12/arts/television/12strike.html?_r=1

BBC News, November the 3rd 2007, Strike set to silence talk shows

http://news.bbc.co.uk/1/hi/entertainment/7074306.stm

Newsweek, February the 13th 2008, Striking numbers, Jennifer Ordonez

http://www.newsweek.com/id/110892

Richard Sloat 37