Prickly negotiations for a new contract between TV writers and producers kicked off last week — and the two sides are at loggerheads over several issues, including compensation for content distributed over new media and whether basic-cable shows will be broadly covered under the deal.
“The source of our difficulties lies with the rapid technological and commercial changes that have been and are occurring within this industry,” Carol Lombardini, executive vice president of business and legal affairs for the Alliance of Motion Picture and Television Producers, said in a statement last week.
For starters, the Alliance is battling bitterly with the Writers Guild of America over how to determine what compensation scribes should be paid for content that is reused or created for new-media outlets, and how revenue from digital services should be divvied up.
Secondly, the WGA is asking that all shows made for basic cable automatically fall under its contract, which would be a big expansion.
Finally, the AMPTP is calling for a total revamping of the decades-old system of residuals, the fees that writers and other talent are paid when a show is reused. The producers maintain that they should only pay out residuals after they have recouped their investment in a TV show or movie.
While the WGA argues that the entertainment industry is having a banner year and can afford higher fees in a new contract, one studio executive said producers believe the writers’ demands would increase already soaring programming costs. That could discourage studios from producing already-pricey scripted series, pinching off cable’s supply of a program genre that’s generated a lot of hits for it this year, the studio executive said. Or the license fees for scripted shows could rise, making them less affordable for cable channels.
In its 26-point list of proposals, the WGA asked for modifications so that writers of “all made-for basic cable programs, not only … high-budget dramatic programs,” would get paid union wages and benefits. The WGA also wants its contract to apply to reality-TV programs.
Currently, the WGA’s agreement automatically covers scripted cable dramas that are costlier to produce — series such as USA Network’s Monk and FX’s Rescue Me. But lower-cost cable shows aren’t covered.
The AMPTP in fact is looking to raise the threshold for what constitutes a “high-budget” cable show. The AMPTP wants the threshold for what’s considered a “high-budget” hour-long cable show raised to $2.25 million from $530,000, for example.
“This means that fewer dramatic shows would fall under Guild coverage,” said Ann Toback, the WGA East’s assistant executive director.
The issue of writers getting compensation for content meant for new-media platforms, reused or original, is complex. Those outlets include the Internet, broadband, and mobile devices such as cellphones, iPods and other portable video players.
The WGA is asking for residuals of 2.5% of “accountable receipts” on the reuse of content on such media.
Initially, the AMPTP asked the WGA to agree to a three-year study on consumer behavior and new media before any contracts were crafted regarding digital platforms.
“We need to know what the pie is before we can figure out how to divvy it up,” Mark Graboff, co-chairman of NBC Entertainment and Universal Media Studios, said recently at the Television Critics Association tour in Beverly Hills, Calif.
He also told TV writers the residual system overall needs to be radically changed.
“We are simply talking about recovering the costs that we put out, out of pocket, for developing the shows, producing the shows, and distributing the shows,” Graboff said.
But last week, the WGA called “untenable” any proposal in which writers would only get paid residuals after a show becomes profitable and rejected the new-media study.
So the AMPTP took the study off the table last week, and both sides rejected each other’s proposals.
The WGA over the past year has organized writers at some individual cable shows not automatically covered by its contract. That happened at Comedy Central, involving The Daily Show With Jon Stewart, The Colbert Report, Mind of Mencia, American Body Shop, The Sarah Silverman Program and The Showbiz Show With David Spade.
The AMPTP has to negotiate new deals not only with the WGA, but also the Screen Actors Guild, the Directors Guild and the American Federation of Television and Radio Artists. Contracts with all four unions expire within the next year, with the WGA deal up Oct. 31.