2007 Writers Guild of America Strike

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This article is dedicated to the strike and news related to it. For affected programming, see WGA 2007 Strike Effects.

The 2007 Writers Guild Strike was strike by the Writers Guild of America, East (WGAE) and Writers Guild of America, West (WGAW) that was initiated on November 5, 2007. The WGA is labor union which represents writers of television, film and radio working in the United States. It does not cover, however, reality "story producers."

The writers guild is striking against the Alliance of Motion Picture and Television Producers (AMPTP), a trade organization representing the interests of film and television producers. By extension, it also represents production companies and studios as an agent of "collective bargaining."

The last strike of this sort by the WGA was in 1988 and lasted for 22 weeks. Because of the dryspell in entertainment, it is estimated that the strike cost the industry $500 million.

On February 9, 2008, the WGA announced that negotiators reached a tentative deal with the AMPTP. This deal was unanimously approved by the boards of both regional guilds on February 10, 2008, allowing for the membership at large to congregate and vote to end the strike on February 12. However, the deal will not be ratified until the membership votes later in February on whether or not to accept the agreement.

Contents

Background

On October 31, 2007, the contract between the WGA and the AMPTP, expired and the two parties have been negotiating for a possible renewal. In a previous contract renewal, the unions used DVD royalty percentages as a bargaining chip to gain leverage on another goal. However, because of that previous negotiation, writers receive royalties from DVD sales at the same relatively low rate as they did for VHS tapes despite the fact that DVDs are a much more lucrative income source for the studios. Similarly, the royalties for new media outlets like iTunes sales have not been worked out and the writers unions seek a cut from those profits as well.

The vote to authorize a strike had record turn-out and was 9 to 1 in favor of a strike authorization—far higher than for any previous strike. Originally it was thought that the writers would wait until June 2008, when the contracts for the Screen Actors Guild and Directors Guild of America lapse, before beginning a strike because all three groups plan to support each other in collective negotiation. They've changed their tactics because the studios have done too good a job preparing for a summer strike and they feel it wouldn't be as harsh of a threat as an immediate strike. In addition because a summer strike would occur during the standard network summer hiatus it wouldn't have as big an effect on the writer focused television medium.

On November 1, 2007, WGA West President Patric Verrone announced that the guild will be striking, although the AMPTP remained optimistic that they would be able to close the contract over the weekend without incident. Negotiations continued over the weekend with little traction, despite former WGA president and ER producer John Wells acting as an 11th hour negotiator. When negotiations broke down on November 4, the union announced that the strike would go on as planned, beginning at 12:01AM Monday.

Issues on the Table

The Writers Guild and the AMPTP negotiate a "Minimum Basic Agreement" contract every three years, generally without much fanfare or notice. However, several key issues caused a breakdown in negotiations between the two groups.

The contentious points in the proposed contract include an increase in DVD residuals, jurisdiction over animation and reality writers, and, most importantly, the quandary of "new media." Presently, writers are not compensated for content written for or distributed through the internet and other forms of modern technology.

DVD Residuals

Background

In 1988, during the previous strike, the home video market was in a fledgling state which was still in the middle of a dispute between the viability of VHS, Betamax and, to a much lesser extent, Laserdisc. The cassette distribution method at this point was very expensive, however, and the entertainment companies argued that the market itself was "unproven."

During the late 1980s movies on videotape sold between $40 and $100 per tape, which led to the writers accepting a small residual percentage (0.3%) of the first million of reportable gross (and 0.36% after) of each tape sold. In the short-term, this was a seemingly fair deal. However, production and manufacturing costs for video tapes dropped dramatically and VHS tapes skyrocketed popularity. Eventually the cost of a VHS movie dropped to an average of $15, leaving a much smaller cut for writers.

The home video market changed dramatically for television writers in 1997 with the debut of DVD. DVDs are less expensive to produce than bulky plastic video tapes and quickly overtook the market. Because DVD also allowed for much more content than a 90 minute tape, it also became a viable format for distribution of television programs. Despite manufacturing costs dropping dramatically due to perfection of the industry and a change in formats, the old VHS residual formula continued to apply to DVD sales.

The home video market is no longer "untested," as was said in 1988 by the entertainment companies, and actually represents a greater sum of profits than box office receipts. The ongoing popularization of high definition media also likely factors into the DVD negotiations.

Proposals

The WGA has requested that the residual rate for DVD sales be doubled from four cents to eight cents. The members of the organization have reasoned that although their main source of income is from working on new scripts as well as employment on writing staffs, residual payments are relied upon for support during lulls in work and flat-out unemployment.

However, The AMPTP claims that the DVD formula is finely tuned because the sales are needed to offset increasing production costs for television programs and movies. They have further suggested that the current DVD formula be used for other digital media. This stance has come up frequently during the "new media" talks.

The night before the strike began, the WGA attempted to get traction on new media by taking the DVD residual proposal off the table. When the membership exhibited "significant disappointment and even anger" at removing the proposal, the withdrawal has been reconsidered. It has also been said that the removal was entirely contingent on concessions by the AMPTP, which did not happen. It's expected that now that the strike is in effect, the issue will continue to appear in negotiations.

Reality and Animation Writers

Background

The Writers Guild has a membership of approximately 12,000 writers. Of these writers, more than 7,000 are in WGAW and more than 4,000 are in WGAE. Primarily, the covered writers work on live-action, scripted movies and television programs. There are some exceptions, however. Animated programs broadcast on major networks, namely shows like The Simpsons and Family Guy on FOX, are covered under the union for instance. Incidentally, WGAW president Patric Verrone wrote for the unionized cartoon Futurama.

Jurisdiction over writers for these genres have been wildly inconsistent over the years and have depended on one-to-one agreements between specific programs and networks. The vast majority of reality programs are not unionized and writers for those shows are generally given titles like "story producer" to get around calling them writers.

Also questioned are hyphenates like writer-producers or writer-actors and the role they have multiple unions. This has become particularly contentious on shows like The Office.

Proposals

In reality programs, producers give employed writers titles like "Segment Producer" and "Consultant" to get around rules which would allow Writers Guild jurisdiction. The guild is requesting that the industry adopt the credits "Story Producer" and "Supervising Story Producer" to apply to these writers. These credits would be counted for guild qualification and would allow the reality writers to unionize.

In the field of animation, the guild has, simply, requested for jurisdiction of all animation in television and film. The only exceptions in this case would be for writers who fall under the jurisdiction of another union

The AMPTP has not issued a counter proposal and has, instead, rejected both counts.

New Media

Background

Perhaps the most critical issue for the negotiations relates to residuals from "new media." New media residuals includes compensation for Internet downloads, streaming video, smart phone programming, content developed for the Internet specifically and video on demand services for internet, cable and satellite television.

As of the beginning of the 2007 negotiations with the AMPTP, there is no arrangement regarding payment for online content. Networks are presently working with two different economic models from which they are receiving monetary gain from: "electronic sell-through" and "streaming video."

Electronic sell-through, also known as internet sales and other variations, is the iTunes model of internet distribution. In an electronic sell-through system, the consumer purchases a digital copy of the program for download to their local storage. Local storage is typically a computer hard drive, but can include portable video players and other devices. For instance, purchases through the iTunes Store and Amazon Unbox are part of this method of sales.

Streaming video is on the opposite end of the spectrum and is not supported by consumers purchasing goods. Instead, it is more similar to the traditional television broadcast economic model in that it is mainly supported by advertising dollars. In this model, the consumer does not download the television program and watches the episode in real time. The signal is transmitted to the computer, but it usually is not saved onto the local storage. This method is used by all of the major networks with varying degrees of built-in advertisements.

Because streaming video is largely ad supported, companies have suggested that the content they broadcast online is "promotional" and therefore doesn't fall under the jurisdiction of writer royalties. NBC has voiced this position in relation to the webisodes created for The Office. Michael Schur and Paul Lieberstein commented on this situation in a video posted to YouTube, saying that the network wouldn't even pay for the Daytime Emmy awarded to them for writing the episodes because they've been deemed "promotional."

Just as in the previous strike, the entertainment industry is arguing that new media is an untested market and have asked for time to study whether or not they can make money off the market. However, WGA has not let up pressure on the topic due to their previous experience with the home video market and the resulting explosion that cost them countless dollars in royalties. WGA members have been adamant that they will not accept the DVD formula for new media residuals.

Proposals

In order to take into account both models, the WGA has proposed that writers receive 2.5% of the distributor's gross for distribution and sales of digital media. This would include profits made from advertising dollars, individual sales and subscription fees.

The AMPTP has refused to address the proposal on new media, however, and is instead pushing the DVD sales formula for download sales. This has been rejected by the WGA because the DVD formula itself is also being contested. The entertainment companies consider streaming video to be "promotional," which means that the writers are not entitled to residuals, even if the program is streamed in its entirety.

The reasoning for denying residuals to writers for streaming programs is tied into the frequently repeated statement that there is no money to be made on the internet. This stance has been contested by a video posted to YouTube by writers for The Daily Show showing CEOs of companies like Viacom stating that the entertainment industry is booming online.

The WGA has rejected both proposals from the AMPTP.

Timeline

July 16, 2007
The WGA and AMPTP begin formal negotiations on a new three-year contract. A few days later, talks break off. Meetings like this would continue with no movement from either side until late September 2007.
October 19, 2007
WGA members vote to authorize a strike.
October 26, 2007
In order to prevent a strike, a federal mediator is brought in to attempt to bring the two organizations together. The AMPTP used this time to put forward new, but still unsatisfactory in the eyes of the writers, proposals.
November 5, 2007
The strike begins.
November 7, 2007
Ellen DeGeneres willingly crosses picket lines and goes on producing her syndicated talk show, The Ellen DeGeneres Show. DeGeneres, a member of both AFTRA and the WGA, was not allowed to strike because of her contract under AFTRA. Though DeGeneres excised the monologue from her show, WGA East issued a statement saying that she is "not welcome in NY."
November 26, 2007
The WGA and AMPTP resume negotiations. They break down once again on December 7.
December 3, 2007
Carson Daly becomes the first late night talk show host to return with new episodes sans writers. Daly is initially blasted by the WGA for allegedly starting up a hotline for friends and family to call jokes into, effectively soliciting scab writing.
December 28, 2007
Independent production company Worldwide Pants, Inc., which produces Late Show with David Letterman and The Late Late Show with Craig Ferguson, negotiates a separate contract with the Writers Guild. This contract agrees to all of the guild's original demands and allows the show to resume production with writers.
January 2, 2008
Though Letterman and Ferguson return with writers, the remaining late night hosts, Conan O'Brien, Jay Leno and Jimmy Kimmel, return to the air without writers. Though, Leno admits to writing his monologue for the first episode back, no action is taken against him.
January 7, 2008
NBC cancels the Golden Globes ceremony under threat of picketing writers. Additionally, The Daily Show and The Colbert Report return without writers.
January 11, 2008
ABC Studios uses the strike to drop several writer contracts under the "force majeure" clause in their contracts. This clause frees both parties (in this case the studio and the writer) from liability or obligation should an extraordinary event like a strike prevent them from working. 30 deals were axed, including: Writer/Producers Nina Wass and Gene Stein (Less Than Perfect), Jon Robin Baitz (Brothers & Sisters), Joshua Sternin and Jeffrey Ventimilia (Kitchen Confidential), Gabe Sachs and Jeff Judah (What About Brian), Elisa Zuritsky and Julie Rottenberg (Sex and the City), and writers Jack Kenny (In Case of Emergency), Bill Callahan (Scrubs) and Ken Biller (Smallville).
January 17, 2008
The AMPTP and Directors Guild of America (DGA) hammer out a deal without any strike behavior. However, the Writers Guild did not see the DGA deal as suitable for their standards and members have voiced concern over new media and other clauses that they feel have not been properly addressed.
January 22, 2008
The AMPTP and WGA agree to begin informal talks, apparently spurred by a contract negotiated by the DGA. The Writers Guild agrees to drop their bid to include animation and reality show writers in their organization to encourage movement on other issues.
January 24, 2008
The WGA and Lionsgate Entertainment sign an interim agreement. Lionsgate is the largest independent producer and the first producer of primetime television to sign an agreement with the WGA during the strike.
February 3, 2008
News Corporation President and CEO Peter Chernin reportedly told FOX personnel, sports reporters and others at Super Bowl XLII that "the strike is over." This sentiment is echoed several days later by Michael Eisner.
February 13, 2008
Writers return to work to all television programs, including late night shows. The first post-strike episodes of formerly writerless shows like The Daily Show, The Colbert Report, The Tonight Show with Jay Leno, Late Night with Conan O'Brien and Jimmy Kimmel Live air with written material.

Strike Consequences

Because the threat of a strike had been looming for several months, the networks stockpiled scripts to series so that they would have new material available for production. Despite this measure, most scripted television series ran out of episodes by the end of January and, once the strike was over, production couldn't possibly catch up before the end of the season. Several shows like Pushing Daisies had their seasons ended early and episode commitments moved to future seasons.

In order to fill time, several unscripted avenues were explored, particularly by NBC. Among the possibilities were news magazine specials, reality shows, game shows like American Gladiators and the broadcast of international and first-run cable television series. NBC was rumored to be looking into airing the British version of The Office, for instance, and announced its intentions to air episodes of USA original programs Psych, Monk and Burn Notice. CBS, meanwhile, pulled from Showtime and broadcast an edited version of Dexter to fill timeslots.

Late Night talk programs like The Daily Show and Late Night with Conan O'Brien were immediately forced into repeats. During the writers strike in 1988, late night shows like Late Night with David Letterman managed to stay on the air (after a "dark" period) by removing all pre-written segments and padding the time with interviews and musical guests. The hosts aren't allowed to write any more material than they normally would, which allows for interviews and some ad-libbing, but little else. In the 1988 strike, late night hosts looked to Johnny Carson for guidance and only re-entered the studio when he went on with The Tonight Show with Johnny Carson.

Some immediate consequences of the strike were seen before it actually went into effect. The proposed spin-off of Heroes, Heroes: Origins was cancelled by NBC. Although the network wouldn't say precisely why the series was shelved, it did finger the strike as a contributor.