Â This is the first in a series of columns that will focus on explaining the possible Hollywood strike in laymen's terms.
Even though Hollywood has had one of the best summers in recent history - earning over $4 billion in ticket sales - producers are not celebrating. A Hollywood strike looms on the horizon.
As always takes place before union negotiations begin, Hollywood studios are speeding up production on movies and TV shows in preparation for a possible strike by writers when their contract expires on October 31, 2007. This will be followed by more trouble next year when contracts with actors and directors are due to expire. SAG's contract expires on June 30, 2008.
March 1 is a drop dead date - for the film studios it's the last date to get cameras rolling so work can be completed before the likely SAG strike that would begin July 1, 2008. If work is not completed by that date producers will not have shows finished on time, as the actors will walk off their shows in support of the SAG strike.
For the TV producers that drop dead date will likely come sooner, around January 1, 2008, as the network PTB (powers that be) will have had to start locking in series renewals and approving costly pilots (which are shot though April). Otherwise they will have to begin arranging TV line-ups without SAG involvement (more news, reality, sports, and game shows anyone?).
If Hollywood strikes, all production by union members will come to an end sometime in late spring. Actors will not act, writers will not write, and directors will not direct, if they do they will be considered to be crossing picket lines and the likely outcome would be their membership in their respective guilds and unions would be rescinded.
Studios are now busy stockpiling scripts and rushing TV show scripts through development in an attempt to produce as much product as possible so they can ride out a strike of any length. So-called "reality shows," which are also scripted (albeit with a slightly lesser focus than a full dramatic or comedy show) will be a popular substitute when fully scripted original programming drops out.
In Hollywood unions are an important necessity for anyone employed below-the-line (BTL - a term from film budgeting that notes all the crew members that fall "below the line" and covers all non-starring cast and crew members as well as equipment, travel, and location fees, etc.). The writers are members of a guild called the Writer's Guild of America (WGA), the directors have a guild called the Directors Guild of America (DGA), and the actors are members of the Screen Actors Guild (SAG).
All technical crew working in major motion pictures and TV for studios must be union members to work. Without union membership the BTL crew could be forced to work 24/7 with no breaks, no overtime, no pension, and no health care. In this town freelancers need unions to live a normal life.
These unions must negotiate their contracts with the Producers representatives, the Alliance of Motion Picture and Television Producers (AMPTP). Contracts are usually signed for a few years and are then up for renegotiation. The current contract lasted for three years, and the next one will likely be a short-term affair as well.
All BTL jobs are freelance (independent professionals without a long-term job commitment who are hired on a job-to-job basis; when the movie or TV show is finished, the freelancer is out looking for their next job). Freelancers have no job security (unless they're sleeping with, or related to, the producers who hire them). In many other industries freelancers have no health care benefits, no pension, no matching 401K's, no sick days, no holidays; they are paid for the work they do, if they miss work due to an illness they do not get paid. This is what makes Hollywood unions such an important issue for everyone.
A Hollywood strike effects everyone working in Hollywood - all union production shuts down so there are no shows to work on. In addition, a strike effects every business a Hollywood freelancer patronizes, from their supermarkets, to their local cleaners, to the restaurants they eat at, to their gardeners, to the rent or mortgage they must pay each month to live.
Contracts for SAG and the WGA are up for renegotiation in the spring of 2008. It's likely that the DGA will continue to work under their current expiring contract until then so as to affect a larger walkout of all the major unions at the same time to increase their negotiation power with the producers. At stake are residuals (an ongoing stream of payment for the completion of past work or to the creator of a performance for subsequent showings), and payment structures for DVD, online, and podcast content.
The Museum of Broadcast Communications explains residuals like this:
"Residuals are payments made to actors, directors, and writers involved in the creation of television programs or commercials when those properties are rebroadcast or distributed via a new medium. These payments are also called "re-use fees" or "royalties." For example, when a television series goes into syndication, the writers, actors and directors who work on a particular episode are paid a percentage of their original fee each time that episode is rebroadcast. This also includes re-use through cable, pay television, and videocassette sales."
It's worth the time to read their entire explanation of residuals, but allow me to quote them one last time:
"Residuals are a lucrative source of income, and thus a major source of contention between unions and producers. As Archie Kleingartner and Alan Paul point out in Labor Relations and Residual Compensation in The Movie and Television Industry (1992), residuals have played a major role in 18 strikes by the various unions. Low-paid actors working in television commercials often earn four times as much from residuals as they do from their initial fees. Series actors, who are paid much more for their initial services, still earn about 30% of their income from residuals. In 1990, total residual payments exceeded 337 million dollars, not counting residuals from television commercials...
Residuals are an important source of compensation for actors, writers, and directors whose works are distributed in an ever-wider array of foreign and domestic markets. They are a major factor in the continuing strength of the various unions over the years."
Â Though these payments might be called residuals, they are sacred income to the workers who are lucky enough to get them.
The problem is that the producers don't want to continue to make residual payments, but as John Bowman, chairman of the Writers Guild of America's negotiating committee, said, "These are wages to us," he said. "They're not bonuses." He said he thinks that the studios are using the scary-sounding residual retrenchment to make their real target - using material on the Internet without paying a hefty residual - more palatable.
For many writers, directors and actors, their residuals are sent directly to them and often are used to pay their daily living costs. Though there are almost 120,000 members of SAG, only a small fraction of those people actually earn enough as SAG actors to support themselves.
With roughly 15% of the 120,000 SAG members working, only about 5000 people are actually able to make a living from acting. The problem is that all members have an equal vote. So 85% of them essentially make the same amount of money (small to none) whether they're on strike or not. So a strike would not affect 85% of SAG membership. Most SAG members have little to lose and thus are likely to vote to support a strike.
The writers are in a similar position; the vast majority of WGA members are not employed as WGA writers so the large part of their membership also does not share in the pain of a strike.
On the other hand, for many BTL craft guilds that are dependent on residuals to fund their health plans, the last thing they want is to see producers rolling back residuals.
These craft guilds - all of which have a much higher percentage of members actually working than SAG, the WGA, and the DGA - are all affiliated with IATSE Hollywood locals - like the Motion Picture Editor's Guild (MPEG), the International Cinematographers Guild (ICG), the Art Directors Guild (ADG). Instead of going directly to each worker, their residuals go to fund their health plan policies. Without these residuals there would be no money to fund their health plans.
Right now, September 19, 2007 is the date set to resume bargaining talks between the Guilds and the Producers. On September 18 SAG has a Board of Directors election that might affect the outcome from the currently hardcore Board members. At this point feelings are contentious and an equable solution is unlikely. What is likely is that the WGA will hold off the strike until SAG's contract is up so all of Hollywood will walk out at the same time.
Of course this is all complicated even further by the fact that Hollywood has just come off its best summer in years. A bad time for producers to plead poverty.
Stay tuned to future HOLLYWOOD POV columns for further explorations and explanations of the looming Hollywood strike.
Â© 2007 by Digital Dogs
--- Digital Dogs is gather's Los Angeles Movie Correspondent ---
Digital Dogs' column, HOLLYWOOD POV, published every Thursday to Gather Essentials: Movies is an insider's look at the art, people, and product of Hollywood.
Digital Dogs is an opinionated writer, editor, and digital designer who lives and works in the Entertainment Capital of the world. DigiDogs' unique reviews are usually written well before a film's release date, and definitely worth the advanceÂ look at the films that influence the world.
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