WGA strike mediator: Has anyone considered Candy Spelling?

Well, ain't that a stitch. After the jump, a well-reasoned analysis of the strike circumstances from Mrs. Candy Spelling. 

The whispers about how our business is the only one that pays residuals are increasing. The auto workers who put together our cars do not get bonuses when we hit 100,000 miles. The doctor who performed successful heart surgery doesn’t get a percentage of our salaries when we return to work. I don’t like the logic or the implications, but I’m hearing it more and more and feel the strike may be an excuse to provide less, not more.

The biggest problem, though, is that, no matter how many pie charts, no one knows the size of the pie, how many flavors will be offered, if it’s good or bad for us in the long run and how many will be manufactured.

How can the writers negotiate for percentages when they don’t have an idea about the grosses, revenues, sales, overhead deductions or anything that makes this is a valid math problem?

And, how can the studios claim there isn’t that much revenue to be generated, when we all know there is?

Class, continue to discuss amongst yourselves. -- Dana Harris

WHERE HAVE YOU GONE, LEW WASSERMAN?

The WGA strike of 1988 doesn’t seem that long ago until you look at the differences in technology.  Anyone who could have predicted the Internet, downloads, YouTube, iTunes, video-on-demand, and others of the, literally, millions of ways people can get content created by our entertainment industry, would have been dismissed as belonging in some low-budget science fiction business, not the entertainment industry. Videotapes and laserdiscs were the ultimate in technology then. Combine that with cable and its choices, and people in the 1990s would be able to actually enjoy entertainment at home anytime they wanted. 

The entertainment industry of 1988 now seem like it consisted of the pioneers of our business, even more than the pioneers of the late 1940s and 1950s. 

I remember the last WGA strike very well. My late husband, Aaron Spelling, was in the midst of “Dynasty,” “Hotel” and other TV and film projects; and, as a “multi-hyphenate” – who always put writer first – he was truly torn. At least, he felt, the issues were clear. And, as much as he understood and appreciated both sides’ positions, he always voted with the writers to be able to share in the revenue.

Fade to 2007. I have no financial interest in either side, but that doesn’t mean I’m not a very interested bystander, consumer and resident who sees the repercussions to our local economy.

What scares me most is that we don’t have Lew Wasserman to get everyone out of this fairly. The longer Lew is gone, the more we realize his contributions, wisdom and love for the entertainment industry and vision for the future.  We do have brilliant and wise pioneers. Has anyone called Barry Diller or Michael Eisner to see if they want to help negotiate a settlement? I hope it’s being considered.

I see this strike – which most experts said would “never” happen – as changing the entertainment industry. I don’t know what all the changes will be, but I don’t think there will be too many beneficiaries. The story won’t be the lead on the evening news and the front pages of the trades and business and entertainment sections of newspapers every day for much longer. While they are, the messages are very confusing and do not paint pictures of unity or understanding:

“If the two sides can’t agree on who walked away, how will they settle on sticking points,” DAILY VARIETY put in red on the front page.

“A fateful e-mail from the union’s East Coast branch abruptly halts a final attempt to broker a deal,” the LOS ANGELES TIMES added a subhead to a story.

Is this about who walked away or emailed? Are the writers and the AMPTP concerned about who said what or getting this settled?

The TIMES also had pie charts and graphs, including one, for some reason, that compared median salaries of male vs. female Hollywood writers in 2005.

Others proclaim, “It’s Going to be a Bumpy Ride,” “Book To Movie Deals in Jeopardy,” and one of the most-telling, “Studios to Stop Production Deals,” an aim of many that goes back well before the 1988 strike. Major layoffs at networks and studios, withheld paychecks at a big talent agency, talk of cutting back the numbers of pilots are all either being threatened or are in the works.

I’ve watched sufficient CNBC and read enough WALL STREET JOURNAL stories to know that this is a convenient excuse to cut overhead and employment rolls that may never offer the same opportunities again. This is not unique to the entertainment industry. I’m not going to be cynical to believe that’s why the situation went far enough to cause a strike. But, I do believe that executives are telling shareholders that they are being responsible and using the situation to the companies’ benefit.

The whispers about how our business is the only one that pays residuals are increasing. The auto workers who put together our cars do not get bonuses when we hit 100,000 miles. The doctor who performed successful heart surgery doesn’t get a percentage of our salaries when we return to work. I don’t like the logic or the implications, but I’m hearing it more and more and feel the strike may be an excuse to provide less, not more.

The biggest problem, though, is that, no matter how many pie charts, no one knows the size of the pie, how many flavors will be offered, if it’s good or bad for us in the long run and how many will be manufactured.

How can the writers negotiate for percentages when they don’t have an idea about the grosses, revenues, sales, overhead deductions or anything that makes this is a valid math problem?

And, how can the studios claim there isn’t that much revenue to be generated, when we all know there is?

Come on, guys. This strike isn’t good for anyone. Will consumers stop watching TV when the re-runs start early?  Will the laptop replace the television? Will my grandson know what a remote control or a 30-second spot is?  Is the industry debating terms that won’t even be relevant or remembered 19 years from now when there’s more strike talk?

The number of people involved in this strike itself is relatively small, but its impact is gigantic. No matter how much “content,” how many “platforms” or which system is used to calculate residuals, we need to protect our industry. It’s our country’s biggest export, one of the drivers of the American economy, provides some of proudest accomplishments and provides diversions and entertainment so badly needed today.

What would Lew Wasserman do to end this? It’s worth trying to figure out.

-- By Candy Spelling     

Comments

[Bob]

What about putting her on a panel of mediators? She knows the issues from all sides and doesn't seem to be profiting from any outcome.

[dp2]

Stock options aren't only used in compensation packages for cash-strapped startups. Most technology companies--whether blue chip or otherwise--offer them. I should know: I've been there--on both sides (as employee and owner). Ford, GE, GM, IBM, NCR, and Mercedes are all over 100 years old; they're older and bigger than the studios, and they STILL offer stock options, and bonuses.

It's true that stock options aren't exactly the same as residuals, but they're similar enough in spirit--as are bonuses--that the analogy still works. Nevertheless, that's really splitting hairs, but I'll give you that one two. The claim is still false in spirit, because of stock options and bonuses. The claim is also strictly false, because franchise and network marketing businesses also pay residuals.

Residuals aren't the real issue. Writers put in at least as much work as directors, actors, and producers; yet, they--on the average--get compensated differently. Residuals should only be eliminated only if it's eliminated across the board. You know that's not going to happen. The studios wouldn't spend so much time, energy, and other resource trying to track down peer-to-peer, file-sharing networks. The studios intend to continue to collect residuals, but they no longer want to pay them. They're being cheap. The writers are only asking for 10 cents per DVD (most of which retail for about 17-21 dollars each). If a project, that went to DVD, had 20 writers on it, then only 2 dollars out of that 17-21 dollars would go to residuals for writers (9-11 percent of the revenue for a single DVD). The production costs for producing any DVDs, after having produced the first one, are nearly 0. I should know: I'm one of the technologists (IT) involved with creating the software and systems for producing that content.

Residuals aren't complex to calculate. Any spreadsheet with the right set of macros or formulas (using elementary arithmetic) will handle them just fine--which shouldn't take more than a few seconds to execute. The mathematical computations for weather and nuclear warfare simulation, energy-grid calculations, and 3D modeling are much more complex--each of which involve equations performing trillions of calculations per second.

Residuals are partially the result of copyright and patent law. Every content producer expects to get paid for his/her creations. The law gives him/her several IP rights each of which he/she may freely sell or lease. Writers--at least as long as the studios have existed--lease them, and the studios want the writers to now sell them.

[Stephen]

"The auto workers who put together our cars do not get bonuses when we hit 100,000 miles."

Nor do Ford or General Motors. Nor do the auto workers create what they assemble.

Other than that, a well-thought-out analogy.

[dp2]

LA and NYC are famous (or infamous--take your pick) for all their creative thinkers, but the irony is that I haven't heard of or read about any creative or inspiring solutions proposed by either side. They're both bickering like angry kids about what they don't have and want: more money, power, and influence; and less risk.

I've read plenty of comments from both parties arguing about a "fair wage". Fair wages--just like unicorns--only exist in Utopia. In market-driven economies like ours, exploitation is the rule (or at least the norm). For example, during the go-go 1990s--especially during the latter 1990s--many IT workers, here in the US, were making a killing. Salaries spanned a range from mid-five-figure to low-seven-figure incomes. Pop goes the IT-bubble! And, in the words of Jackie Gleason, "away we go . . ." to find new jobs (that usually didn't exist), because those jobs were sent offshore. Both of those events created a perfect storm which resulted in the salaries of the remaining IT workers getting haircuts--Mr Clean style. Employers usually strive to pay the least they can to get/retain an employee, and will try to work that employee to the max. Similarly, employees usually strive to squeeze as much as they can out of an employer, and will work the minimum amount required.

Doctors, teachers, sanitation workers, and chefs all perform important services, but they all don't get paid the same. Some might assume that doctors do--or at least should--get paid the most, and that sanitation workers do--or at least should--get paid the least. However, that's not always the case. One's pay usually has less to do with one's education, and more to do with how well one markets/sells one's self. For example, take a look at any major hospital. Many doctors, who often have had more schooling than their administrator counterparts, usually get paid less. Many teachers get paid less than many five-star chefs, and the list goes on. Is this fair? Fair or not . . . that's life--now, deal with it.

I admit that was a bit harsh--it's like a shot: my comment might sting at first, but it might help one to heal later.

Having stated all of that, I believe the real issue is how both parties can distribute the wealth, power, influence, and risk more equitably.

[dp2]

Nevertheless, I my heart still goes out to the writers, and I believe they are mostly right about all of this.

[Crew Member]

As someone who is about to be collateral damage and lose my job for the duration, I just want them to talk. I like the pie question. Do they even know how much they're talking about? I get a salary. I'd like more, too. Just heard on the news that the Guvernator volunteered to mediate. I'll take Mrs. Spelling.

[dp2]

Sorry to hear that Crew. If it's any consolation, I've been there too. I was part of the collateral damage resulting when the IT-bubble busted. I lost 15-30K in a flash (where many of my friends lost several hundreds of thousands of dollars), so I guess I count myself blessed. Times were tough for a while. Many of us ended up taking all kinds of odd jobs and short gigs until the market improved (several years later).

As a result, I started doing some technical writing--among other things.

Here's perhaps another consolation--at least they probably won't outsource (specifically offshore) your job as well anytime soon.