It’s the System That Needs to Change
Jeffrey Korchek, a lawyer for toy company Mattel and former Universal Studios lawyer, wrote in the Hollywood Reporter recently (June 11, 2008) that the industry doesn’t have the money for the studio lawyers at the AMPTP and the industry unions to indulge in the luxury of a “fight” to resolve a contract negotiation. He thinks union contracts should be for longer than three years and thinks it’s more important to keep everyone working than to hold out for an acceptable contract. He advises SAG to follow the example of the DGA, which, in his view, did not need to strike to achieve an acceptable contract. Mr. Korchek is wrong on three points worthy of a response.
First, Mr. Korchek characterizes the strike as a luxury in resolving the contract negotiation. If the studios thought of it as an optional strategy, the WGA certainly did not. The strike was born out of necessity in the face of a November 4 walk out by the studios that left a devastating offer on the table. The situation hadn’t changed much when the studios walked out on resumed talks December 7. The issues were not small. The offer included pennies on the dollar for new media compared to long-established standards of residuals and the elimination of key provisions of the contract. In the end, writers were successful in avoiding the rollbacks, and they won residuals for new media that largely conform to the standards of prior contracts for other uses.
Second, while the DGA brought its own leverage and negotiating skill to the table, there is no doubt that the WGA’s strike added to the DGA’s ability to get a deal and exposed the AMPTP’s willful scuttling of negotiations with the WGA. If the companies had conducted the three weeks of substantive negotiations that resolved the WGA contract in February of 2008 back in July of 2007, the WGA would have welcomed it. Those conversations and that offer were not available then. The studios and networks are well-informed about their businesses. We must take it at face value that they made a business decision they judged in their interest to delay the offer that long.
Finally, Mr. Korchek describes the industry’s economics as “shaky” and opines that the pressure of a strike is “too great a strain.” Actually, while industry revenues are shifting, they are growing. The entertainment business only appears shaky to those who do not look closely or those who have no strategy to adapt. Industry CEOs continue to brag to Wall Street that the economic outlook is bright and even claim that the strike improved their profits.
Mr. Korchek has raised a worthwhile criticism of the industry’s labor relations. He writes that “The whole labor negotiation process has become contentious and distracting and costly.” That is certainly true. If the studios and networks look back and agree with Mr. Korchek’s conclusion that they should have found a way to make the offer earlier that they were eventually satisfied to make, there is a change to make. The cause of unnecessary conflict is a labor negotiating process disconnected from the operating divisions of the studios and networks. In February, when two seasons of television and the Academy Awards were about to go down the drain, and it became too costly not to settle, the CEOs got involved and the issues were resolved. That was the serious negotiation the WGA had sought from the start, but could not achieve without the pressure of a costly strike. Reconnecting the labor negotiating process to the operating realities of the business is a change that would solve the problem that Mr. Korchek raises. His solution to “just stop messing with the system” is neither specific nor helpful. It’s specifically the system that needs to change.
-Chuck Slocum, WGAW Staff
