WGA STRIKE CENTRAL: DAY 25
As the WGA and AMPTP continue at the negotiating table this week, Wachovia sponsored a client conference call on the writers strike with Steve Katleman, entertainment attorney of international law firm Greenberg Traurig LLP. "The fact that negotiations are spanning three days is a good sign,” stated Katleman.
There are various issues under negotiation, including: 1) Minimum Scale Union Payments for new media, whereby writers would receive a minimum compensation for direct-to-new media content. 2) New media residual payments — an increase in current internet residuals as well as residual payments for made-for-new media content. 3) Assertion of Guild jurisdiction over reality programming. A fourth major issue had been an increase in DVD royalty/residual payments (to 0.6% from 0.3% of studio-derived gross revenue), but this was dropped during original negotiations on 11/4.
Both sides have every incentive to end this strike before the next round of Upfront negotiations are impacted. On one hand, the networks sell the majority of their primetime inventory (75-85%) to advertisers in the Upfront and any disruption to this process would have significant consequences for network television. On the other hand, writers need to make a living, and thus are most likely still writing for 2008-2009 primetime programs, despite the fact that they are technically not allowed to do so. Therefore, there should be minimal delay (if any) in the Upfront process should the strike conclude over the next few days/weeks.
Making the current situation even more contentious is the fact that the Screen Actors Guild and Directors Guild of America contracts are up next June, with negotiations occurring in early 2008. While it is true that the agreement among the writers and producers will create a precedent for the SAG and DGA negotiations, a simultaneous strike among all three guilds would result in a shutdown of the entire entertainment industry, in Wachovia’s view.