Another voice from the WGA: "The DGA deal as it stands today is bad."

Despite last week's admonition by WGA leaders to members to cool down the rhetoric, high-profile writers continue to take potshots at the DGA deal.

Tom Fontana and WGA West board member Phil Alden Robinson have already made their displeasure known; the latest comes from John McNamara, whose credits include "The Adventures of Brisco County," "Profit," "Lois & Clark," "Vengeance Unlimited," "The Fugitive," "Eyes" and "Jericho."  In a post on United Hollywood, McNamara opens by noting that his overall deal at CBS/Paramount was terminated Jan. 14.

"Given that this financial blow is due to the strike and the fact that it's been well over a decade and a half since I made any real money via the MBA, I should be writing to you gentlemen begging you to take the DGA deal," he said, referring to the WGA's minimum basic agreement. "Nothing could be further from the truth. I'm writing to urge you -- don't settle for anything less than the best deal possible."

McNamara doesn't go into details about the DGA terms, but he's still explicit about it just the same. And he urges WGA members to hold out for a better deal.

"The DGA deal as it stands today is bad," he wrote. "It may be a bad deal with a few good points, but it is not the reverse. Don't be swayed to think otherwise. You know what's right here. Everyone does, no matter what they say out of anger, desperation, greed or exhaustion."

Here's the entire post --

On January 14th, my overall deal at CBS/Paramount was terminated. So this is actually my two cents... plus hundreds of thousands of dollars.

I bring this up so you'll understand that starting on November 5th, I began losing a substantial amount of money. (To put in perspective: I started my career as a playwright, and what I made in my first year of writing theatre, I lost each day as a suspended showrunner.)

As of the 14th, I’ve now lost everything due me under my term deal.

Given that this financial blow is due to the strike and the fact that it's been well over a decade and a half since I made any real money via the MBA, I should be writing to you gentlemen begging you to take the DGA deal.

Nothing could be further from the truth.

I'm writing to urge you -- don't settle for anything less than the best deal possible.

Because this isn't about me or my losses. This isn't about any one writer. This is about thousands of us, up and down fortune's ladder, some who are better off than I am right now, many much worse off, but each of us linked by this:

We all know the difference between a good deal and a bad deal.

"Good" is any provision where our share grows alongside all possible delivery forms.

"Bad" is anything else.

The DGA deal as it stands today is bad. It may be a bad deal with a few good points but it is not the reverse.

Don't be swayed to think otherwise. You know what's right here. Everyone does, no matter what they say out of anger, desperation, greed or exhaustion.

My Dad was a trial lawyer. He spent most of his life trying to sway people. A job that was always easier when he represented a client whose plea or defense was legally sound. Because then he didn’t have to use as many words. My father always said, “The more words you use to explain something, the less true it is.”

What you’re trying to do can be boiled down to two short, declarative sentences:

If they make nothing, we make nothing. But the more they make, the more we make.

Any argument against those sentences would have to be elaborate in the extreme. Possibly confusing. And certainly disingenuous.

Do what's right. Don't back down, don't concede, don't give in to fear, pressure, or worst of all, the common wisdom.

I set out to have a long career that would weather many ups and downs. So far, that's what I've had and there's no denying I'm in one of life's little troughs at the moment. But I'm not alone. And I haven't lost my bearings. This is a fight for the future.

Someday, when that future becomes the present and I look back on all of this, I want to say I was a small part of a big fight that mattered. I stood with people who knew that. We rose together and took action.

I'm proud to do what I do for a living; more proud of that than any check that's ever crossed my desk. Checks are cashed, and parking spaces are painted over. But I'm a writer -- with you -- forever.

- John McNamara

Comments

[Stuart Creque]

Kid of sounds like a union man to me.

"Do what's right. Don't back down, don't concede, don't give in to fear, pressure, or worst of all, the common wisdom." Good advice.

[ed]

I'm not sure why everyone is jumping all over the DGA regarding their deal. The DGA members follow a different compensation plan where they are paid more upfront and less on the back-end. The deal probably makes great sense for them. Isn't it great that the two sides were able to come to agreement quickly and evidently to the delight of each? So, enter the WGA. Do what is right for you and stop dumping on the DGA for the deal they've made for their members.

[a suit]

I agree. The WGA got gains across the board for their members and created opportunities in new media for both their members and the business at large. Isn't that the idea in a guild contract?

And furthermore, Mr. McNamara talks about how the more a studio makes, the more a writer should make. It sounds good but it makes no sense...the writer gets paid upfront, before anyone else. The writer takes the LEAST financial risk of any other part of the creative partnership. If the writers want to share in the possible financial success then they must share in the possible financial disaster (a much more common scenario). If they want genuine back end then they should give up front end. The WGA should create an optional deal where the writer makes a modicum or no money up front but becomes a part owner of the final product.

[ray]

Um, actually, I believe writers already consistently invest more than anyone else in the process. Doesn't it take months and months and months to write scripts? While doesn't it take weeks to do principal photography? And you're certainly not talking about specs. Did the producer pay for the year of research to create the script for that spec feature? No, the writer invested that entire year of their life on their own dime. But the studios benefit from a system where they only buy the specs they want and don't have to pay a dime for the process involved. Time = Money, so the writers did invest a GREAT deal of capital, with possible risk of NO PAYMENT WHATSOEVER. Writers already more than just about anyone else involved take on the underlying risks in their projects. It seems to me the suits want to have their cake and eat it too.

[As long as it takes]

Bravo, Ray. In actuality, writers are paid far less than the full value of the script upfront, with an understanding that they'll receive additional, or "residual" payments, along the way as the product is repurposed.

[The real Fi Core]

I wonder if he's proud of childern losing there health care benefits,my father was a eastern european immigrant who was a factory worker back east,who during his short life, he taught me what a working man was,he was happy with just a job,now back to school,do the striking writers on Leno really make 8000 a week?And don't preach to me about this being for rights of workers,calling this strike,put the real workers out of a job.I wonder what the general public would think of that ?
Prima donnas

[The real Fi Core]

My schitzo other half keeps talking about the general public, but any poll you take, any person you ask, they all support the WGA! Even right-wing wacko Mike Huckabee supports the WGA. And what's with me saying you should just be happy to have a job, no matter what your employee decides to pay you? Doesn't my crazy other self know how economics work, how certain rare skill-sets are always paid higher wages? It's another form of supply and demand. Jeez, did I even graduate from Elementary School?!

Anyway, again, I'm sorry that this split personality of mine is so freaky! And that my other half is such an ill-informed, bitter ass-wipe blow hard! I hope my next mean post when "Dr. Jeckyll" takes over isn't half as bad as my prior posts. Man, I am a tool!

[a suit]

to ray - I can't disagree that writers spend a lot of time on their work and we're all grateful for it, but that is what they're paid to do and they're paid well for it (thanks to the WGA's minimum contract).

And you're also right that they write a spec on...well, spec. And if they sell it they will get paid for their services. Their agents and lawyers will do their best to get payment commensurate with the value of the piece. And my point is that if they would like to actually own the project there should be a WGA option to get paid nothing or little upfront in exchange for an actual place at the ownership/producer table. I think it would empower writers and free them from the disgruntled "worker for hire" universe they're stuck in.

[a suit]

to The Real Fi Core - yes, the writers have a lot of public support, and why wouldn't they? Writers are cool. Picket lines are cool...they are fighting the man. Since very few people, and that includes most of the writers on the picket line, actually know the truth of what they're striking about we can safely assume that most of the horns honked are not supporting any specific contract item.

And as for wages, the WGA (unlike the DGA) is not asking for one raise in any of the Guild minimums. In film, what a writer actually gets paid upfront is the real money that most writers make. The vast majority of commissioned scripts never get made so residuals are moot. If the guild wanted to put money right into writers pockets that's how they could do it. It's why so many writers are calling this a television strike since the issues involved have little or no effect on film writers.

And one final point, there are writers out there who are making unfathomable amounts of money for their writing. How could this be? Each and every writer, by regulation, MUST have an agent or a lawyer negotiating for them and protecting their rights. EVERY WRITER. Keep that in mind....

[The real Fi Core]

I think you undersestimate the public, but that's not unusual for a suit. Much of the public understands that the writers are simply asking for a small piece of the revenue when the worlds they invent are put on the internet. And though it's true that many screenwriters make their living selling scripts that will never be made, millions of films -- in fact, probably all films ever made -- will soon be available online for direct download or streaming. Each one of those films has a writer or writers. They deserve a small share of that revenue. This is a absolutely a screenwriter's strike as well.

And for the record, the guild IS asking for a small increase in guild minimums, as they do every contract negotiation, in order to keep up with cost of living increases. That's very common knowledge -- what company do you work for, suit? Why don't you know that?

Anyway, while I don't agree with most of your positions, I do appreciate your cordial manner, unlike my jerk-off other half. Thanks.

[a suit]

to The Real FiCore - I apologize for overstating the case, yes I do know they are asking for "cost of living" increases but I was thinking more along the lines of an increase that would truly be felt since I think that upfront fees are the best way to put money into writers pockets directly.

And, as you can see, I'm just not a big fan of residuals. I understand why they are there but they just don't make a lot of sense to me. If a writer wants big back end they should give up front end...if they want to be paid "for hire" then they should give up the back end. It just feels like that's what's fair...

But hey, as you pointed out, I'm just a suit...

[ray]

Suit:
You seem to be making an underlying assumption that the current upfront fee is the entire total worth of the script and the residuals are all extra and unfair. But if currently the total worth of a script = upfront + residual, then wouldn't the upfront fee have to be drastically increased if you want to move to a new system with no residuals? If the studios are offering millions as the new MBA minimum upfront fee then you might have a point, but your current argument is to keep upfront payments as they are and cut out the rest. That doesn't make any sense. You can either argue for a much increased upfront payment with no residuals, or payments as they are with residuals. To argue payments as they are but with no residuals is trying to have your cake and eat it too.

[a suit]

to real FiCore: I completely agree. That's EXACTLY it. Obviously, no one on either side is proposing this so this conversation is words in the wind but I use it to illustrate my point. I think writers should have the option to either get paid out completely upfront (which would involve a considerably higher fee) or have real ownership (not just residuals) for a much lower fee...or perhaps none at all.

[ray]

Well, Suit, then let's take it even further. Engineers create Intellectual Property and team up with Venture Capital to start businesses. VCs take a large stake in the new company for their money, but the engineers retain a significant ownership in their company as well. Why isn't it the same for writers? Writers create Intellectual Property (and copyrights have way longer lifespans than patents). Why should the writer have to sell their copyright? In the past the reason was becasue the networks and studios have a hold on the distribution system. But that doesn't look to be necessarily true forever in the future. I say, let's move to a system where the studios are a form of VC. They get a large stake in a new company of which the writer retains a significant stake as well.

[a suit]

to Ray - well, this gets back to some history, specifically when writers signed away their copyrights to the studios (I think this was in 1949 but I could be wrong). Over time this was in exchange for writers getting all sorts of rights like guaranteed minimums and many others including the consolation prize of residuals. I think you are on to something here...that if writers really wanted to get real they would fight to own their copyrights again, even if it was just to sell the rights completely. You've hit on the underlying issue beneath what we're talking about. But they would have to exchange a bunch of stuff to do it...all residuals would be gone. COMPLETELY. But yes, I think it would be a good idea, it would put writers (and especially agents) in the driver's seat. For better or for worse.

Remember, some writers may like just writing for hire.

[Josh]

Suit, the residual process benefits the studios as much if not more than the writers. If the AMPTP offered a (fair) larger upfront, the WGA would jump on it. Why? Because, as you pointed out, most scripts never get made and therefore generate no residuals. They would be doing themselves a huge financial disservice to include a premium based on the assumption that every script is going to get made and do well on the backend. Sure there is a level at which they would do it (if they could negotiate that premium to a very small amount), but then we're right back to where we are now - arguing over how much residuals, be they paid during the script sale or after the movie is made, are worth.

It also injects a great deal of uncertainty into the equation, which the studios, all publicly traded companies now, hate. You're paying everyone a bunch more money knowing that 95% of them are never going to generate a return. This way it's better for the studios - you're only paying more money if you make money. It's justifiable to your shareholders.

For that reason the scenario is entirely moot. The studios should be singing and dancing about the residual system - it makes things cheaper and simpler on their end. From their point of view, their only task is to negotiate that residual payment down as much as possible, which is exactly what they're doing.

re: writer's retaining copyright, good luck. Having owned that for years, the studios will never give that up, just as the writers, having owned residuals for years, will never give that up (i.e. allow them to be negotiated down to a nominal fee). It's much harder to take something away that someone is used to having than to win something new that no one is used to having.

[An observer]

A suit is right -- there are two avenues to take here. One is via the studios, where writers get big upfront payments (and maybe some residual portion of profits when a film or show does particularly well) and they give up their copyright. The writers who do well on this avenue get hired again by studios to write on other projects in development (not their own ideas as much) and keep on getting the big upfront payments in exchange for their writing services. The other avenue for a writer is to keep all rights, to get people outside the system to pay for the material and produce dramatic works based on it, and then to reap the profits as they come. I honestly think there is some potential in this -- films could emerge as some musical artists have by getting discovered in part on the internet so that people pay to come see them.... But we don't yet know how to make these independent distribution methods profitable in any reliable way.
So most people want and/or need to be on that first avenue to make a living as a writer-- it's pretty hard to put together one's true vision on a shoestring budget, if you can find enough $$ even for that. And the WGA has nothing to do with the second avenue -- they just want to maximize waht the writers who have made it onto the first avenue can get.
It is naive to say that the amount of the upfront payments is a separate issue from the percentage of residuals, and "a suit" is right to point out that there is going to be a trade-off between the size of the back-end vs. the front end.

This rhetoric of a "win" vs. a "loss" is pretty unproductive, too. The DGA scored their members a "win" by improving their take on a number of different issues. They also specified that the deal is for a limited duration -- the evolving issues of internet downloading and the like will be revisited in a few years and this deal will not be cited as the "final" agreement in that area. That's not a raw deal -- they're negotiating for the present, and setting the stage for future negotiations, but not trying to come to an agreement that is going to define the percentages for writers for decades to come (which will surely backfire). It seems to me that nobody has a very clear sense of what winning this strike means on the writer's side (other than getting everythign they are askign for, which isn't going to happen); accordingly, the writers are going to "win" when the leadership says it has "won" (kind of like Iraq). By not acknowledging that the DGA negotiated worthy improvements and by characterizing that deal as "caving in", I think the WGA is setting the stage for there being no basis on which to reach a deal with the studios and thus an even more prolonged strike.

[a suit]

Observer - nicely put. The DGA deal is not the be all and end all, nor is it a disaster. It's a nicely modulated deal that encourages continued development and innovation, not to mention keeps the directors in continued partnership with the rest of Hollywood.

Especially worrying is the SAG comments on the DGA deal. It seems the more unemployed the guild is, the more willing they are to burn down hollywood. It also seems like the guilds would like to grab a bit of power back from the agencies...

[ray]

Suit and Observer:
You're just going around in circles because you're arguing about the business sense of an offer that doesn't exist. As I correctly pointed out (and Suit even agreed), the current market value of a script = upfront + residuals. The AMPTP current offer is same upfront as before, but virtually no residuals in the future. Why would anyone in their right mind agree to that deal? If the AMPTP wanted to follow your suggestions, they should offer a greatly increased upfront payment in exchange for buying out future residuals. They aren't doing that. I don't get why you're surprised the writers don't like this deal. It makes no business sense. Either greatly increase upfront payments if you really want to buy out residuals, or keep upfronts as is and keep residuals as is in the future. One or the other. Not cherry picking what's best for the AMPTP.

[jerry]

I've never understood the hate for residuals. From a macro business standpoint, they actually benefit the companies.

Let's say you write an episode of network television for the current WGA minimum rate of $30,812. That episode has value. It can be aired once, twice, or a zillion times-- on network, cable, pay-per-view, download to own (and maybe rent) and of course streamed. It can also be sold on DVD and exploited in syndication/foreign markets. If you're the company, do you want to pay all the money for that value up front? Because it'd be a LOT more than $30,812. Or would you rather defer the compensation over time, by paying a small percentage if and only if you choose to repurpose the work and it ultimately turns out to be valuable? The companies prefer the latter. Which isn't surprising. How did they put this system in place?

As the creator of the work, the writer owns the copyright. That's where the value is, and the companies realized this a long time ago. They had to figure out a way to get their hands on that copyright, so what did they do? They convinced the WGA to allow its members to be employed on a work-for-hire basis, which gave the companies ownership of that valuable asset-- the copyright. And how did they do that? By agreeing to pay residuals. It was THEIR IDEA. So residuals are not some nefarious thing the writers are using to try to screw the companies-- they are part of a system the companies themselves wanted, and in fact NEED in order to run their businesses efficiently. (By the way, the companies don't even bear the signifigant costs of administering residuals. The WGA does it for them, an invaluable service (and huge hassle) that is often overlooked.)

Residuals, a/k/a royalties, are common in the business world. They are paid to scientists who design new drugs and inventors who create new technologies. Patent, trademark, copyright-- this is how our system pays for intellectual property. And it works.

One last bit of perspective. Screenwriters are on the extreme low end of the totem pole when it comes to residual rates for creative work. A songwriter gets 50% for the mechanical license to a song she writes. Authors typically start out at 10%, with the number going UP to 12% and 15% and sometimes even higher as book sales increase (hmm, there's an idea...). Even playwrights earn 6%. And what are screenwriters demanding? 2.5%. Which would be a home run, considering the current DVD rate of .33%. That doesn't sound like greed to me. Actually, it seems pathetically low.

Residuals as a business model aren't going away, nor should they. But it makes you see why a flat fee for streaming in lieu of a percentage is such a sticking point. It has to be a percentage or else the whole exercise is meaningless. And, as the writers keep saying: they only get paid if the companies get paid. I've yet to hear a convincing rebuttal for that point.

Oh, and one last thing for suit-- there's nothing stopping a writer from retaining copyright to her script and trying to license any of her bundled rights. But she'll have to do it on her own. If it's not a work-for-hire, then she's not an employee, and the WGA has no jurisdiction. So there will be no guaranteed minimums, no residuals, no health and pension, no credit determination by her peers. She may say fine, she's cool with that, hoping for a big payday. And she may get it. But... I seriously doubt it. No (legitimate) studio or buyer is going to make a deal without obtaining all rights. The WGA contract provides certainty-- one of the whole points of collective bargaining-- and the studios would rather pay residuals than deal with the nightmare of not owning the copyright. So this is not a question of if there will be residuals, but rather how much.

[a suit]

jerry - excellent analysis. worth noting, residuals and royalties are not the same thing, nor do they have the same history. Songwriters get royalties because they retain the copyright on their songs. Writers also retain the copyright.

Screenwriters get residuals because they have sold away the rights to their work. It's a different system because of the different legal framework. Hence a different percentage payment.

[jerry]

Jerry -- is that true? A songwriter or author retains their copyright and gets MORE of a percentage because of it? Whereas the screenwriter sells theirs and gets LESS?

Wow, those WGAers really are getting screwed.