Posted: November 2, 2007
Writers Say Strike to Start Monday - www.nytimes.com/2007
By MICHAEL CIEPLY and BROOKS BARNES
LOS ANGELES, Nov. 2— Hollywood's two decades of labor peace shattered Thursday night, as movie and television writers declared they would embark on an industrywide strike for the first time since 1988, when both writers and Teamsters walked out.
The writers' union announced this afternoon that the strike would begin on Monday morning.
Unless there is a last-minute settlement, the strike will pit union writers, whose position has been eroded by reality television and galloping technological change, against studios and networks that are backed by big corporate owners like General Electric and News Corp., but are also unsure of the future.
The walk-out threatens an instant jolt to television talk shows like "Late Show With David Letterman," which rely on guild writers to churn out monologues and skits. "The Daily Show With Jon Stewart," "The Colbert Report," "Late Night With Conan O'Brien," and "The Tonight Show With Jay Leno" will all revert to repeats on Monday, at least for the time being.
And if the strike drags on, audiences could see the eventual shutdown of soap operas, TV series and movie productions, as they exhaust their bank of ready scripts.
In the near term, a writers' strike will have an immediate impact on more than 200,000 workers in the movie and TV industry here and the thousands more who produce or sell entertainment elsewhere in the United States and abroad. The dispute may also signal more labor trouble to come, as directors and actors face similar issues when their contracts expire next June.
Over the long haul, multiple strikes could lead to a drastic overhaul of the economics of Hollywood. They could redefine the industry's relationship with its highly unionized work force at a time when DVD sales are cooling and changing movie and TV markets have workers and companies alike vying for their perceived fair share of a yet-to-be-identified next digital bonanza.
"I'm afraid that everybody's in for a terrible time," said Norman Lear, the writer, producer and entrepreneur whose career spanned the disruptions of the 1980s — when Hollywood weathered five strikes by its guilds — and the years of relative peace that preceded and followed that tumultuous decade.
The leaders of the Writers Guild of America West and the Writers Guild of America East were expected to order their roughly 12,000 members covered by a contract with the Alliance of Motion Picture and Television Producers to stop work and be assigned picket duty when the strike begins.
The strike call follows more than three months of contentious negotiations. Ultimately, the two sides gridlocked over the writers' insistence on a sharp increase in their residuals payments for the re-use of movies and shows on DVDs and on new payments for the distribution of such works on the Internet, over cell phones and elsewhere. Producers refused to boost the DVD payments and rebuffed demands related to electronic distribution, arguing that industry economics and still-shifting technology made accommodation impossible.
In a statement issued Thursday night, J. Nicholas Counter III, president of the producers' alliance, said: "By the W.G.A. leadership's actions at the bargaining table, we are not surprised by tonight's recommendation. We are ready to meet and are prepared to close this contract this weekend."
A strike by the writers threatens to tear a hole in the economy of Southern California, even as it already copes with a collapse in home sales and widespread devastation from last month's fires.
The entertainment industry contributes an estimated $30 billion annually, or about 7 percent, to the economy of Los Angeles County, according to Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.
Show business also helps drive the local tourist economy. "If tourists see that the entertainment industry is shut down, we worry they will think the entire city is shut down," said Mr. Kyser. He noted that restaurant business in the southeast San Fernando Valley — home to Universal Studios and the largest concentration of production — has already dropped 30 percent as anticipation of the strike grew in recent weeks.
Indeed, most of those affected by such a strike have no direct stake in its issues.
The New York-based book industry, for instance, may find studios reluctant to buy film rights to new works at a time when no writers are available to adapt them for the screen. "In the first part of a strike, buyers will be sitting and waiting to see if it gets resolved," said Amy Schiffman, who specializes in literary sales for Hollywood's Gersh Agency.
Similarly, thousands of businesses, whether mom-and-pop companies that train dogs for television shows or lumber yards that specialize in building materials for sets, face possibly dire consequences, some sooner than others.
"I'm really scared," said Oren Ashkenazi, owner of TVC Television and Cinema Wardrobe Clearners, located near the Warner Brothers lot in Burbank, Calif. The cleaner processes up to 2,000 garments each night for television programs like "24" and is not set up to accept retail customers.
At Green Set, a 13-acre tree nursery that rents plants to set decorators, employees are facing sharply reduced hours. Meanwhile, owner Dan Needham, who just provided flora for Steven Spielberg's upcoming "Indiana Jones and the Kingdom of the Crystal Skull," said he is trying to break into the party business. "This is an awfully good reminder of the need to diversify," he said.
Some may find an upside in the disruption. Starbucks thinks it might benefit from more people looking for a place to hang out, said a corporate spokeswoman. And others will make a business of financing those out of work.
"We've already seen an in increase in inquiries about our service," said Steven Blume, chief operating officer of Content Partners, which buys so-called "participations" — stakes in movie and TV show income — in return for ready cash.
Talent agencies are considering layoffs. Hollywood's development executives will be idle or reassigned. And story departments will soon see a near-halt to the flow of 100 or so new scripts and rewrites that flow through a major studio in a typical week.
That a halt should be called to so much activity stems at least in part from recent leadership changes at the West Coast guild, which is much larger than its eastern counterpart and represents a preponderance of Hollywood writers. In 2005, Patric M. Verrone, a longtime animation writer, was elected president of the western guild on a promise to shore up the declining stature of unionized writers within the industry.
By Mr. Verrone's count, perhaps 95 percent of Hollywood's work was done by guild writers in the 1980s. More recently, he has said, the figure dropped to about 55 percent, as companies like Viacom Inc. used non-guild writers to work on increasingly popular animated, reality and other shows for its MTV, Comedy Central or VH-1 television units.
At the same time, writers of guild-covered feature films saw their earnings decline in the last decade, as big studios like Warner Brothers or Sony Pictures Entertainment increasingly relied increasingly on specialty or genre film units that were frugal in spending on scripts, or on films acquired from outside producers who might spend less on writers than a major.
Mr. Verrone and his colleagues launched an organizing drive, cleared the guild of staff members who were seen as too close to management and vowed in the current negotiation to undo what they saw as an unfair formula that paid them too small a share of DVD sales, while establishing a more favorable pay scale for any new medium that might ultimately replace the ubiquitous discs.
In the same years, Hollywood's networks and studios became aligned in new corporate configuration that left the big studios and networks in the hands of six big media and manufacturing conglomerates: General Electric, News Corp., Sony, Time Warner, Viacom, and the Walt Disney Company.
As entertainment executives and these often distant owners wrestled with questions of their own about eroding influence — few in Hollywood were unaware that changing technology has almost gutted the traditional music business — the prospect of a confrontation with writers, and perhaps later with similarly aggressive actors, became all but inevitable.
Perhaps doomed from the start, the current negotiations began in July with a demand by the producers: The writers had to agree to postpone setting compensation for new media until an industry group could study the matter, or accept a radical restructuring of the residuals system, under which companies would make payments only after they had recouped the cost of movies and programs.
Writers rejected both options. The producers eventually withdrew both, but refused to meet the writers' demands. Now, the best prospect for solutions at the bargaining table may lie not with writers, but with the anticipated start of still unscheduled negotiations between producers and the Directors Guild of America. During Hollywood's more than 19 strike-free years, the directors sometimes reached agreements that were later followed by writers and actors — a pattern Mr. Verrone and his fellow guild leaders have promised to avoid in the current round.
Whether writers can ultimately enforce their agenda will depend much on the organizational will of an unlikely union: The West Coast guild, according to its own statistics, is about 72 percent male, 93 percent white, and includes many members who annually collect hundreds of thousands of dollars beyond guild- mandated minimum payments for the glamorous task of writing movies and television shows.
In 1988, a similar array of writers maintained their strike for five months, though not without severe internal strains and the repeated threat of secessions that ultimately did not occur.
Much about entertainment changed because of the earlier strike. Reality television began to flourish, their cheaper production costs and decent ratings appealing to both broadcast and cable networks. And a booming market in so-called "spec" scripts — presumably fed by work written at home during the walk- out — followed the strike.
Too, writers were forbidden that year even to write for the Oscar broadcast, leaving presenters to quip for themselves. And it could happen again, for the 80th Academy Awards this coming February.
"People who complain about the humor on awards shows should wait to see what they're like without writers," said Bruce Vilanch, the longtime gag writer, Oscars contributor, and, soon, a striking guild member.
Jacques Steinberg contributed reporting from New York.