Rhetoric drowns out reason

Ari Emanuel the voice of sanity? Who would have thunk it? But the chieftain of talent agency Endeavor makes a pretty cogent case for trying to avoid a writers walkout, noting that politics is about to trump economics. "If you look at the amount of money that was at issue during the last writers' strike in 1988, I bet it was less than the amount the strike ended up costing all concerned," he blogs on the Huffington Post. "And I believe that will be the case this time around, too."

New technologies have dramatically altered Hollywood's economic landscape, but the AMPTP is still clinging to a revenue model that was created back in the days of Lew Wasserman and Abe Lastfogel - and was, as I understand it, adopted from the record business (you remember records, don't you?). The movie business took the formula used for calculating record royalties and basically transferred it to the sale of videotapes (you remember videotapes, don't you?). What's more, the current royalty formula for DVDs factors in the cost of manufacturing (today's electronic DVDs and web downloads, of course, cost absolutely nothing to "manufacture"). Clearly, the media world has gone through a major evolution since Lew and Abe, and it's time for its business practices to follow suit.

On the other hand, what the representatives of the Writers Guild have to remember is that all union contract negotiations are to set minimums, and that the effect of the change in residuals from DVDs and New Media they are seeking will not rise to the level of revenue they are asking for - or what the strike is going to cost the Guild's active members. Once again, the eventual cost of a strike will exceed the financial gain being sought.

Richard Verrier's overview story in today's LAT suggests that personality clashes among union and management negotiators aren't exactly helping matters. That's what makes labor disputes last a lot longer than necessary. In this case, the big conflict is between Nick Counter of the Alliance of Motion Picture and Television Producers and David Young, who is the WGA's chief negotiator (and a tough-nosed organizer of construction and garment workers).

Since he was hired, Young has favored confrontational tactics associated with blue-collar unions like the Teamsters, such as staging pickets and protests at industry panels. The tactics have irritated Counter, who has publicly criticized Young as reckless and inexperienced. "The fact that the two men don't evidently have any kind of relationship of trust at all would seem to mean that it's difficult, if not impossible, to do the kind of off-the-record exploration that often leads to breakthroughs," said Dan Petrie Jr., past president of the WGA West.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
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