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Strike a Deal

The volume of rhetoric from Hollywood and its writers has been turned up to 11 on a scale of 10 as the Writers Guild of America (WGA) this week becomes the first of the three major entertainment unions (actors and directors follow next June) to hit the bargaining table.

Once again, the networks and studios are pleading poverty over rising production/marketing costs as they head into talks on a new three-year deal.

The unions, meanwhile, argue that their opponents are swimming in money and talking out of both sides of their mouths to Wall Street and the guilds. They want their members to get a fair share of proceeds for their work appearing on emerging new-media platforms. Sounds fair.

Corporate chieftains claim it is too early to tell how profitable any of these new platforms will ultimately be. That is also a reasonable position, although we are not sure it logically follows that, as the studios suggest, there needs to be a three-year study before the nearly half-century-old fixed-residuals structure is scrapped for a new profit-based system.

The guilds passed on a similar proposal in 2004, but this time, the heads of Warner Bros. Entertainment, CBS Corp. and the Disney-ABC TV Group—Barry Meyer, Les Moonves and Anne Sweeney, respectively—made clear during an unprecedented on-the-record chat with reporters that they will press the guild hard to go ahead with a three-year study before an overhaul takes place.

John F. Bowman, chair of the WGA's 2007 Negotiating Committee, says the guild's members can't rely on Hollywood accounting to give them a fair cut of proceeds under the proposed methodology. “According to studio analysis,” he said, “The Simpsons doesn't turn a net profit. The companies have lost the right to talk about a profit basis for residuals.” Warner Bros.' Meyer suggested that the matter be studied, saying, “There's no reason to think that we can't solve the problem of how you deal with all of those accounting issues.”

He's right. If both sides are open and honest with each other, an equitable pact can reached.

Although the studios have gone out of their way to erase the negative stereotypes created in the late 1990s and early 2000s, when heavyweight producers like Steven Bochco sued their studios over millions in lost profits from alleged in-house dealings, a high level of distrust remains.

Certainly, a changing media landscape deserves further study, but in the meantime, there needs to be a way in which all sides receive an equitable percentage of proceeds from new-media ventures. Perhaps one way to create true accounting transparency is for network and studio leaders like Meyer, Moonves and Sweeney to take the bold step of making qualified union reps part of their budgeting process from start to finish, so no one can accuse them of cooking the books. One can dream.

Still, this would address a core issue and may be a way to avoid a devastating strike that the networks, studios and unions cannot afford.