Deconstructing Pop Culture

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Deconstructing the Writer’s Guild Strike

January 17th, 2008 by David Kronemyer · 2 Comments

By now, everybody pretty much has had it with the “writer’s strike.” There simply isn’t a way for the writers to “win,” whatever that means. The large, international multi-media conglomerates – which, for sake of consistency, I’ll refer to as “LIMMC’s – simply are too well hedged.

In addition to Disneyland and Disney Studios, Disney owns ABC Television; News Corp., in addition to numerous other media outlets, owns 20th Century Fox Studios and My Space; Time-Warner owns Warner Bros.; CBS and Viacom own CBS Television, Paramount Studios, MTV, Comedy Central, etc.; Sony owns Columbia Pictures; and General Electric (of all companies) owns Universal Pictures and NBC. Google (which owns You Tube), Yahoo, and Apple vie to join this club. If it’s not movies, or television, then it’s the Internet; writers might as go well back to writing books.

Just to make it clear from the outset, by no means am I a fan of the LIMMC’s. They are greedy, grasping and conniving in their relentless quest for world domination. Their pervasive influence over contemporary culture is to be deplored, not applauded.

The strike is, and has been, a big issue here in Hollywoodland. At least, it’s received unprecedented media coverage, particularly considering that the Writer’s Guild, or WGA for short, has approx. 10,000 members, only half of whom (by the WGA’s own statistics) do any work. While I don’t know for sure, given the way these things go, I don’t doubt but that the half who don’t work, are responsible for 90% of the agitation.

Certainly there has been more coverage than I’ve seen for any strike, ever, including those by unions with 50 times more members. This might be attributed to the media’s fascination with itself, in other words, writers writing about writers. I’m not necessarily pointing the finger at individual reporters – coverage from Michael Cieply (New York Times), Patrick Goldstein (Los Angeles Times) and Joe Morgenstern (Wall St. Journal), and on-line publications such as Slate and Salon, has been thoughtful and insightful. This kind of self-introspection or “reflexivity” might be inherent to the enterprise of media, itself.

All of this by way of saying that none of my observations are particularly original. Rather, I intend this more as a recap. There are ample media citations for each of the propositions I assert, including the fine newspapers and sites I refer to above, together with trade publications such as Daily Variety and Hollywood Reporter.

In addition to its relatively small size, another interesting fact about the WGA is the heterogeneity of its member’s income. There is, in fact, incredible revenue dispersion – that is, some writers earn a lot, while others make hardly anything. Most labor unions, on the other hand, have relatively homogenous income distribution – that is, even considering gradations for job classification, seniority, and similar factors, most members make about the same amount of money. At least, the standard deviation is nowhere what it’s like for writers.

Furthermore, writing is per se a solitary endeavor. I’m not saying that writers don’t work in groups, or pairs, and most television shows are cobbled together by an odd assortment of persons co-habitating what the lingua franca calls a “writer’s room.” Rather, what I mean is that, sooner or later, some particular individual must put pencil to paper, or face a computer screen, or speak aloud, in order to articulate his or her thoughts, or a story line, or a bit of dialogue, or a plot element, or some other component element of what ends up getting “written.”

This fundamentally is unlike a factory, or an assembly line, which is a more typical union environment. The reason why is simple: the more fungible the task, the more the worker is amenable to exploitation or replacement (hence the need for job protection and seniority). Except for occasional palaver about how “older” writers are discriminated against by “young” entertainment executives, there is no evidence for a correlation between time spent as a writer, and writer’s income.

Furthermore, as a form of activity, writing is supposed to be unique. Although it might not always be true for the more formulaic genres, one writer isn’t supposed to be interchangeable with another. If that was so, then there’s no reason, in principle, why every writer can’t be James Joyce, Fyodor Dostoyevsky, or Herman Melville, which clearly is not the case.

These factors make you wonder just why it is that writers have, or need, a union at all. I understand the WGA’s historical origins, and the myriad ways in which writers have been under-appreciated, misunderstood, and (frankly) screwed. My point simply is that, from an industrial organization standpoint, the WGA is a peculiar institution.

Nonetheless, it successfully has been able to co-opt the semiotics of organized labor. It has picket lines, placards, noisy demonstrations, and parades. A huge percentage of people are said to “favor the writers” in their current dispute. The question leading to such an answer, however, is virtually meaningless, seeing as how respondents are unlikely to say they favor the LIMMC’s, versus a rag-tag congeries of seemingly-bullied individuals.

In the meanwhile, unless I’m missing something, here’s where matters stand.

1. There actually are two branches of the WGA – one on the West Coast, and one on the East Coast. The East Coast division now is busily entering into agreements with its main employers, which are the LIMMCs. So much for inter-union solidarity.

2. All of the late-night television show hosts are back at work. Some of them, like Jon Stewart and Bill Maher, are funnier than ever (to me, at least). After having dispensed with the requisite bleating and moaning, it’s like nothing happened. They even seem to be enjoying themselves.

Up until the start of the New Year, most of the late-night television show hosts somehow had been brow-beaten into single-handedly supporting their staffs for several months, if that can be believed. If this is true, they cannot possibly have done so willingly. In fact, this is so preposterous, that it well could be a public relations ploy funded sub silentio by the networks (although I must state I have nothing other than inference to support this assertion).

Fact of the matter is, it’s extremely difficult to separate anyone in Hollywood from their own money, especially for ostensibly eleemosynary purposes. In fact, one of the central tenets of the entertainment industry is never to use one’s own money, no matter how much of it you have. Rather, always use “OPM,” that is, “other people’s money,” instead. The richer you are, the more this principle applies. Therefore, the only possible explanation for this deviancy, assuming it occurred, is political correctness.

Such an initiative, assuming it occurred, must have been incredibly costly, not to mention annoying. Entertainers like Jay Leno are said to support a production staff of around 80 people, including a dozen or so writers. I know that productions require infra-structure, but I am hard-pressed to account for the activities of this many people. Or, for that matter, this many writers, essentially to support a five- to ten-minute monologue on current affairs. But there they all are, their mouths agape like tiny little robins waiting for worms.

3. All of the late-night television show hosts definitely are using written material. You almost can hear the tele-prompters whirring in the background. Interstitial materials (video clips, stills, cartoons, etc.) reliably appear on cue. This form of integration cannot take place without a script.

Initially there was considerable hubbub after Mr. Leno averred, on-air, that he was “writing his own material,” if that can be believed. I do not know whether he still is purporting to do so, though I assume he is. Evidently there is a WGA regulation, or strike rule, itself in contention, that can be interpreted as prohibiting him from writing, even though he also is a performer, and, for that matter, performing his own material.

I suppose even under the WGA’s interpretation of its own rules, it would be perfectly legal for him to deliver a monologue extemporaneously, using thoughts he had composed and organized in his head. It would not be legal, however, for him to have written them down previously, even in the form of an outline for his jovial and seemingly off-the-cuff remarks. Pretty much like what stand-up comedians do, which is how Mr. Leno got his start.

In the meanwhile, Al Martinez can write his newspaper column, even though he also is a WGA member (a conundrum Mr. Martinez himself cheerfully has pondered, “Screening movies is guilty pleasure during the strike,” Los Angeles Times (Jan. 14, 2008). I raise both of these cases not with a view to deciding who’s right or who’s wrong, rather, to illustrate the level of granular analysis – some might call it nit-picking – the situation requires.

4. The Golden Globes, which is a fake Hollywood awards show, was canceled, and the Oscars, which also is a fake (albeit more pedigreed) Hollywood awards show, is on the verge of cancellation. This is an odd, yet oddly predictable way, for writers to “shoot themselves in the foot,” especially seeing as how “best writing” is one of the awards categories.

If ratings numbers are to be believed (and many surmise they bear only a tenuous relationship to who actually watches what), then a large number of people watch, and must enjoy, these shows. In addition to self-congratulations, this is the main reason why they’re staged, to begin with. Which, in turn, hopefully causes consumers to patronize the concoctions the shows are meant to honor, such as movies, which in turn are written by writers.

The purpose of the WGA’s strategy is to bring the LIMMCs to heel, and to demonstrate its power. Arguably, though, it’s more of a form of self-immolation.

5. The Los Angeles economy has lost several hundreds of millions of dollars due to the strike. This might seem like a lot of money, and it is, but it represents something like a week’s worth of admissions to Disneyland. So, for a LIMMC, it’s no big deal.

Many below-the-line personnel who comprise the working entertainment force, though, have lost their jobs. Being over-worked and under-paid (and this is one thing I genuinely believe is true), they typically don’t have extensive financial resources to tide them over, as do many successful writers. Not to mention the hundreds of service personnel and small vendors (everything from restaurants to florists) who have been put out of business.

An article by Brooks Barnes that appeared in the New York Times, “Awkward Encounters in the Hollywood Trenches” (Dec. 31, 2007) described an encounter at the swanky Bel Air Hotel Restaurant between a coterie of affluent writers, and a coterie of equally affluent studio executives. In between munching on their Cobb salads, they exchanged witty riposte.

Like the story about the late-night show hosts supporting their own staffs, this story is so incredible that it well may be apocryphal. If it is true, so much for the proverbial “little guy.” As Bob Marley once sang, “Them belly full, but we hungry.” The LIMMCs claim total direct losses to writers now exceed the amounts to which they would have become entitled under their demanded proposals. This well may be the case.

6. Reality shows, regardless of their caliber or quality, are back with a vengeance. “American Idol,” for example, reliably is reported to have taken in a record amount of advertising dollars, in anticipation of its forthcoming season. There is considerable concern, especially in television, about erosion of audience, disintermediation to alternative media such as the Internet, or some weird form of communication called books, or people playing video games, or texting each other, or having sex, or whatever. [On the latter point, academic studies in developing companies trace population bursts approx. nine months following power outages.]

In the meanwhile, even though there may have been some modest erosion in over-all audience, there has not been a noticeable fall-off of advertising revenue. Major national-account advertisers (evidently) have not repudiated, or even re-negotiated, their “up-front” advertising commitments, nor have there been excessive “make-goods” or compensatory time.

By and large, the movie business remains unaffected by this alleged migration to different consumer entertainment alternatives. Actually, since television companies and movie companies all are owned by the same LIMMCs (see supra), this effect probably balances out. People certainly aren’t buying more CDs, as record companies such as EMI and Warner Bros. lay off thousands of employees. And, they evidently aren’t enjoying lattes with their pals at Starbucks, which is in the midst of restructuring.

It’s far from clear this displacement, or change of emphasis, wouldn’t happen anyway, given the plethora of modern media options. If and to the extent some displacement is occurring, it isn’t caused by anything having to do with writers, or the decline of pop culture, or related ephemera.

7. The WGA touts a series of contracts, denominated “interim agreements, which it has signed with various firms. With one possible exception, though, these deals are meaningless.

That possible exception is (an alleged) agreement between the WGA and David Letterman’s production company. Mr. Letterman is a crafty fellow, though. He is reported to “own” his own shows, which sounds terrific in theory, but in practice undoubtedly is meaningless. The way these things work out, he probably also has signed licensing agreements committing those shows to whichever network it is that paid for them, for the next quarter century. Any increased WGA costs likely are passed on to it.

Most of the agreements seem to be with movie companies. Properly understood, though, these alleged companies are not what you or I might think of as “genuine” companies. Rather, they typically are more in the nature of incorporated mop-and-broom closets. They primarily are funded by, or at least distributed by, one of the LIMMCs (or, in the case of firms such as Lion’s Gate, companies aspiring to become one).

Here are a few reasons why the interim agreements must be viewed skeptically:

(a) The major Hollywood studios each put out less than 20 movies per year. Some, like Disney, have vowed to cut this back even further. In a recent Los Angeles Times article, “WGA deals offer hope, but not much more” (Jan. 16, 2008), Jay A. Fernandez observes the main effect of the interim agreements is, the signatory companies have been inundated with scripts of every sort, most of them worthless.

Ultra-rare exceptions notwithstanding, it is highly unlikely any “genuine” studio will spend tens of millions of dollars filming a motion picture, and tens of millions of dollars more marketing it, with an unknown writer.

Expectations theory hypothesizes it’s easy for a movie to be perceived as a “failure,” if it under-performed in relationship to how it was thought it would, or might, perform – even though, in financial terms, it was reasonably successful. Just like shares of some companies, such as Apple, tend to drop after they report record quarterly earnings, because the market thought they should have earned even more, than they did. LIMMCs, and the nervous executives who run them, are loath to take this risk.

(b) Regardless of the pace of theatrical release, the major Hollywood studios collectively have thousands of “already written” scripts, in various stages of development, turn-around, and inter-company swappage. Perfectly serviceable scripts are in plentiful supply.

(c) Even given LIMMC’s greed and avarice, the fact remains there’s only 100% of the pie, and whoever takes a bite out of it, precludes somebody else from getting a bite. Furthermore, with a wide-enough margin for error, there still is a relationship between revenue and costs. That is, there is no “costless” revenue, or revenue that just magically “appears” without money being spent. Much of the time, revenue and costs are reasonably closely apportioned.

For talent, one of the areas where this is most important, is the notion of “recoupment.” In general, this means that, on a project-by-project basis, the LIMMC’s get to earn back their “costs” associated with the project, however defined, before they start paying additional royalties or “participations.”

A world of suspicious behavior underlies the definition of “costs,” which is more elastic than the Pentagon’s budget for toilet seats. Most cost models are based on the concept of a “rolling break-even,” which means that not only fixed costs, but also additional variable costs (marketing, manufacturing, promotion, advertising, everybody else’s participations, interest, overhead, etc.) are added to the cost basis, which further defers recoupment. Historically, LIMMC cost accounting has been notoriously opaque. As Art Buchwald will attest, or would attest if he still was alive, for all but the most extraordinary projects, “net points” safely can be valued at zero. In fact, if I’m not mistaken, Mr. Buchwald referred to them as “monkey points,” an interesting comment on the relationship between writers and the theory of evolution, if nothing else.

These factors are the main reasons why the most desirable talent – that is, the ones most likely to “open” and sell movies – insist upon, and receive, so-called “gross points,” which (in principle, at least), come “right off the top,” before all this other malarkey occurs.

The problem with this, for the small production company, is that too many gross point participants will, on balance, make your deal that much less attractive to your distributor, the LIMMC. The greatest risk of being a small production company is financial incapacitation. That is, you don’t want to enter into a deal where production costs, to be passed on to your distributor are, or might be, unpalatable. This includes residual and guild commitments, particularly considering that, by law (a little-noticed provision of the Digital Millennium Copyright Act) the distributor is required to assume all of these obligations. Too many forward financial commitments of these sorts is one of the leading causes of distributor malaise.

(d) What happens to the signatory companies to the interim agreements, if their “interim” deals turn out to be less favorable than what happens if the WGA simply folds its tents, and meanders back into the desert? Will they stay in place on terms that are, on margin, more disadvantageous than those applicable to their ostensible competitors?

(e) One of the most common corporate structures in Hollywood is to form two companies, even though it looks like there’s only one. Company A is a signatory to the various Guild agreements. Company B isn’t, or signs them selectively. Another common corporate structure is to form a separate company for each and every production, so as to isolate Guild liabilities, and not cross-contaminate or cross-pollinate non-Guild ventures. Everybody – writers, directors, producers, actors, you name it – signs up with the special-purpose entity, not its parent. Worst-case scenario, this is what’ll happen, in which case the interim agreements will pertain to nothing.

For these reasons, among others, I believe the interim agreements essentially are much ado about nothing. At some level, and despite their various claims of aesthetic uniqueness, there is a level at which any film production (and certainly any television production) is fungible. If you’re too much trouble, or have too many commitments, or too much baggage, it’s simply easier for the distributor to move on and pick somebody else out of the queue. “Spinoza’s Conjecture” is a principle to the effect that, psychologically, it’s easier to say “yes” rather than to say “no.” In Hollywood, it’s the exact reverse. “Forget it, Jake. It’s Chinatown.”

8. What a blessing it must be to be a LIMMC and be able to anticipatorily breach all of your contracts with production companies, even whimsically, for any reason, or for no reason at all. Or, to fire certain of your employees, who thereupon will have no effective means of recourse. The strike has facilitated precisely this outcome, under the guise of what is called force majeure. Force majeure” usually means things like acts of war (think 9/11), or acts of God (think Hurricane Katrina). These clauses typically are broad enough, though, to include labor disturbances.

The reason why most invocations of force majeure are dubious is because there is no reason to believe the LIMMCs aren’t using them simply to dump unfavorable or unduly expensive production agreements, or to ditch employees who have become redundant or otherwise disposable. They have been selective in their application, and there’s no reason for them not to be. After the crisis has passed, then they can pick up with, or rehire, whomever they want. In addition to LIMMCs, even talent agencies have gotten into the act, laying off superfluous or unproductive agents left and right. Good luck fellas, overcoming this stigma, once things settle down.

9. In conclusion, here’s an update on the unions front. The Directors Guild of America (“DGA”) now has entered into its own agreement with the LIMMCs. This has the possibility of cramming-down a readily-analogous precedent on the WGA.

The Screen Actors Guild (“SAG”) labor agreement comes up for renewal this summer. Although SAG has demonstrated fraternal solidarity with the WGA, and there’s no telling what will happen, one can’t help but feel SAG views the WGA’s objectives as unachievable, if not impenetrable, and the strike as increasingly quixotic. Actors, understood as part of an industrial labor force, have completely different needs and requirements, than do writers. While of course a few actors at the top earn millions of dollars, even more of them are unemployed than the writers of the WGA. And, the next line to Bob Marley’s song, op. cit., is: “A hungry mob is an angry mob.”

The Int’l Alliance of Theatrical and Stage Employees (“IATSE”), which represents most below-the-line workers, already has made clear it couldn’t care less about the WGA, or its various grievances. While the Teamsters Union has made token signs of support, the trucks still are rolling.

The American Federation of Musicians (“AFM”) and the American Federation of Television and Recording Artists (“AFTRA”) are in their rowboats, paddling away from the strike as fast as they can. “Not our problem,” they say, probably correctly.

So where does this leave the WGA? Writers run a serious risk of marginalization, as the world passes them by. In the meanwhile, the LIMMCs sit their with their hands neatly folded, pleased with themselves, ready to wait it out. Imperturbably, they placidly chew their cuds, like the contended, well-fed cows they are. Rupert Murdoch and Sumner Redstone, contemplating the universe of their expansive domains, yawn and roll their eyes.