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9. Deal or No Deal?
- Syracuse University Press
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190 9 Deal or No Deal? Alan Wertheimer was having lunch at a restaurant in Park City, Utah, on January 20 when his cell phone rang. It was the third day of the Sundance Film Festival, the annual gathering that brings a glossy mix of Hollywood and independent-film types to the ski-resort town about thirty-five miles east of Salt Lake City. Wertheimer was there partly to scout for potential clients, but mostly to indulge his love of movies at the festival that is the premier showcase for independent films and up-and-coming talent.1 The call that interrupted Wertheimer’s lunch that Sunday afternoon was from WGA West executive director David Young. Young was characteristically forthright during the brief conversation. The WGA wanted to retain Wertheimer as an outside counsel as guild leaders prepared to go back into contract negotiations—this time directly with News Corporation president Peter Chernin and Disney CEO Robert Iger. Young’s call to Wertheimer came three days after the DGA and the AMPTP revealed the basic details of a contract agreement that included new categories of residuals for new media and other precedent-setting provisions. It established a residual rate for paid downloads that was double the comparable rate for home video. The deal also cemented the DGA’s jurisdiction over made-for-Internet productions with precise parameters. And it included a groundbreaking obligation for AMPTP members to disclose contract documents and other information pertaining to licensing and distribution in new media, in an effort to help the DGA understand how business models in the new media realm would evolve during the three-year term of the contract. In the DGA’s public statements regarding the deal, however, no single element was touted more than the fact that Deal or No Deal? | 191 the residual formulas established for paid downloads and Web streaming were based on distributor’s gross, and nothing less. The DGA had achieved the provision that the AMPTP had said was a deal breaker in its negotiations with the WGA. The DGA sealed its tentative contract agreement January 17 after six days of formal negotiations with Nick Counter, Carol Lombardini, and studio labor executives at AMPTP headquarters. But the bulk of the work had been done by a handful of key players in the weeks leading up to the formal bargaining sessions. Chernin and Iger had several meetings at Chernin’s home in early January with Gil Cates, Jay Roth, and other DGA officials to fine-tune the basic framework of new categories of residuals for paid downloads and Web streaming, as well as the parameters of the DGA’s jurisdiction over productions done for the Internet. Chernin and Iger worked on big-picture issues; the nitty-gritty of the numbers and percentages in the final deal was left to Counter, Lombardini, and their team. This approach, coupled with years of preparation by the DGA, allowed the sides to tackle tricky matters that could have easily been bogged down in debates and jockeying among the larger group of executives in the formal bargaining sessions. The day the DGA agreement was announced, the studios made the same offer to the WGA to engage in informal discussions “to determine whether there is a reasonable basis for returning for formal bargaining,” the AMPTP said in a statement. “We hope this agreement with the DGA will signal the beginning of the end of this extremely difficult period for our industry.”2 In their phone conversation, Young told Wertheimer that if he wanted the job, he would have to return to Los Angeles immediately because the first meeting with the CEOs was set for the following Tuesday, January 22. Wertheimer was on a plane within hours. Among the individuals who were most relieved when Wertheimer said yes was John Bowman, who was starting to feel the clock ticking. As soon as he saw the basic terms of the DGA deal, he knew the strike was essentially over. His gut told him it would be impossible to maintain the support of prominent screenwriters and showrunners if those deal terms were put on the table for the WGA. [44.211.117.101] Project MUSE (2024-03-29 02:49 GMT) 192 | TV on Strike The single biggest selling point of the DGA agreement was the gains in the residual rate secured for paid permanent downloads, or the new media equivalent of a DVD purchase. It also established the DGA’s unequivocal jurisdiction to enforce guild...