Writers’ Strike Continues In Spite of Negotiations

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Author: Peter Indall

The Writers Guild of America (WGA) Strike that started on November 5, 2007 continues to drag on, but several recent developments indicate the beginning of the end. On January 17, the Directors Guild of America (DGA), with their contract about to expire, struck a tentative deal with studios for a new contract after only a week of negotiations. Eager to not have the directors as well as the writers on strike, producers worked hard to hammer out this new agreement.

Existence of such a deal sets a standard for other unions in the entertainment industry as well as putting pressure on the WGA to make concessions to end the current stalemate. Rooted in a division over residual payments from new media and DVDs, the strike has turned especially acrimonious. The informal and less confrontational approach used in the DGA talks has been replicated for the resumption of negotiations between producers and writers.

The return of late-night talk shows in early January (after a two-month hiatus) highlighted varying reactions to the strike. Jay Leno, Conan O’Brian, Jon Stewart and Stephen Colbert resorted to on-air improvisation, and some such as Leno came under fire from the WGA for writing their own material. On the other hand, David Letterman, who owns the production company behind his show, struck an exclusive deal with the union to go on the air with writers. Several smaller studios and production companies have followed suit, including Lionsgate Entertainment (behind the TV show Weeds) and Marvel Studios (makers of the movies Spiderman and X-Men). However, the major studio conglomerates such as Warner Bros., Sony Entertainment, Paramount, NBC/Universal and Disney maintain a united front to hold out until the WGA drops some of its demands.

Concern over the economic impact of the strike is particularly present in Los Angeles. The ripple effect goes beyond those directly involved in the industry to include hairdressers, caterers, limo drivers and other businesses that serve the needs of entertainment production. A notable example occurred with the cancellation of the Golden Globes award show on January 13. Presented annually by the Hollywood Foreign Press to honor the best in film and television, the producers of the award show failed to receive a waiver from the WGA to hold the event. Writers picketed outside the Beverly Hills Hilton, where the show is usually held, and most stars refused to cross the picket line. According to CNBC news, estimates of the local economic loss (for hotels, restaurants, salons) ranged northwards of $80 million. The possibility of the additional cancellation of the Academy Awards-which has never happened in its 80-year history-has increased the pressure on both sides to reach an agreement.

In light of California’s recently predicted budget deficit, some politicians, such as Governor Schwarzenegger, have been nervous about the reduction of tax revenue from the entertainment industry. The City of West Hollywood, home to the Sunset Strip, often serves as a shooting location for film productions. Like many municipalities in Southern California, West Hollywood relies on revenue from film permits as a part of its tax base. With the drop in film production accompanying the strike, the loss of funds from film permits could potentially damage West Hollywood’s finances.

However, West Hollywood Film Liaison Terry House said, “Since the strike began, the number of film permits has remained stable. Reality programs have been the bulk of the new permits, and December was a very busy month.” Outside the jurisdiction of the WGA, reality programming offers a cheap and profitable alternative for studios not only to survive, but also to prosper during the strike.

Despite the pessimistic outlook promulgated by the strike, several reports suggest the economic damage of the strike is exaggerated. The UCLA Anderson School of Management released a report in December that found the overall impact to be fairly minimal. The mitigated harm can be traced to several strategies taken by studios, writers and other businesses in response to the strike. As the likelihood of a strike became apparent, the trend known as “time-shifting” of income occurred. Faced with a reduction of income, the studios began to stockpile an inventory of scripts and content to ride out the strike. The writers, for their part, began to save larger portions of their incomes in preparation for the strike.

Similar actions were taken in the lead up to the 1988 WGA strike and the threatened actors’ strike in 2001. To replace the loss of revenue in older media, some companies have also turned to the Internet, which is precisely the area under contention with writers.

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