4th UPDATE (more new information throughout): Let me recap what happened tonight, first and foremost. The Alliance of Motion Picture and Television Producers today at 2:35 PM put a so-called revised proposal, including a list of demands, on the bargaining table to flesh out its New Economic Partnership for the Writers Guild Of America.

wga-bowman-and-verrone.jpgThe WGA described to me that the AMPTP's latest New Media terms were the same old/same old. But I'm told agent Bryan Lourd, considered an objective source, believed that the new AMPTP proposal bettered the studios' and networks' terms on the table for New Media. It included an improved, albeit slightly, streaming deal for theatricals.

A controversy erupted over the AMPTP's arrogantly issuing demands for the negotiations to continue. They ordered the writers to immediately take Reality TV and animation jurisdiction off the table, remove the no-strike clause in their contract (meaning that, once their own strike was settled, the writers must cross picket lines if the Screen Actors Guild goes on strike), stop insisting on a fair market value test (aimed at keeping the studios and networks from selling entertainment product back to themselves at a lower price than they could get from an outside company), and no longer demand a distributor's gross definition on New media (which the WGA argues could gut all its New Media proposals). See the AMPTP's ultimatum here for yourselves.

I'm told that, after the AMPTP ultimatum was made, the WGA negotiators (above left, WGA's John Bowman. All photos here courtesy of Jim Stevenson) went to caucus inside a hotel room. Faced with what to do about the AMPTP's take-it-or-leave-it demand, "we were still going to make a counter-proposal in the hopes of keeping the negotiations going," recounted WGA negotiating committee member David A. Goodman, who was there, in an email. "However, we were all pretty clear that they were setting us up."

wga-goodman10.jpgAfter about an hour and a half, the AMPTP claims it sent Bryan Lourd to the hotel room to ask what was happening, and he was told by the WGA they were preparing a counter-proposal. The AMPTP says it asked Lourd to find out if that counter-proposal contained anything from the list of demands which the networks and studios wanted the WGA to take off the table, and that the WGA negotiators wouldn't say.

But the WGA's Goodman (left) disputes the AMPTP's account of what happened. "As we were discussing what to do, [AMPTP president] Nick Counter came looking for David Young. He asked him, in the hallway, "Are you going to take those things off the table?" David said we were working on our counter-proposal, but wanted to present everything at once, [and] he wasn't going to negotiate in the hallway, and said we would be making a counter proposal very soon, that night."

The AMPTP version is that, at 6:05 PM, Counter knocked on the hotel room door trying to find out some indication from Dave Young what the WGA was going to do, especially on the reality/animation jurisdiction and no-strike issues. Counter brought Bryan Lourd along "as a witness," the AMPTP told me. "David Young answered and was visibly angry."

But the WGA's Goodman says this is wrong. "David was not 'visibly angry". All the conversations in the hallway were amicable, if tense."

According to Goodman, "Nick came looking for David again and tried to motion David away from Bryan Lourd's door (where Bryan was standing), but David motioned Bryan to follow them so he heard what Nick said."

wga-reality-tv.jpgBryan Lourd told people privately that he counseled the WGA negotiators that "this was their maximum moment of leverage" and urged them to try to "trust" the AMPTP, but the WGA told him they couldn't at this point. "It was an ultimatum. They said unless we take everything off the table except streaming and ESTs that they're not going to negotiate anymore and basically they're leaving until we'll remove all those other things," a WGA board member explained. "We're not accepting an ultimatum. We're here to bargain and to talk." (right, Reality TV writer speaking at WGA's march down Hollywood Blvd.)

Both sides agree on what Counter then said to Young: "In that case, we are leaving and breaking off negotiations. When you send us a letter confirming you will take all these items off the table, we will make an appointment to resume negotiations with you.”

The AMPTP claims the WGA hotel room door slammed shut. But Goodman says, "No door was slammed."

Then AMPTP president Nick Counter hand-delivered the following letter to the WGA's executive director Dave Young which was also cc'ed to Bryan Lourd:

This will confirm the conversation we had today at approximately 6:05 PM, in the presence of Bryan Lourd, in which I asked whether the WGA was preparing a proposal in response to the proposal given to the WGA by the Companies at approximately 2:35 PM this afternoon. You advised that the WGA was preparing such a proposal. I asked whether any of the six issues that the Companies had earlier today advised the Guild must be withdrawn before negotiations can proceed further would be included within the proposal the WGA is preparing. You responded that you did not know because you were still working on the proposal.

I informed you that when the WGA sends me a letter confirming that those six proposals are withdrawn, the AMPTP will schedule another negotiation session with the WGA.

Immediately thereafter, the reps for the studios and networks quit the negotiations and issued their press statement already in hand blaming the writers for the breakdown in talks. "Under no circumstances will we knowingly participate in the destruction of this business."

But the writers said their side considers that the talks are still ongoing and insists they won't stop negotiating. Then the WGA issued its own statement saying, "We remain ready and willing to negotiate, no matter how intransigent our bargaining partners are, because the stakes are simply too high."

In short, things are back to being a big mess.

What's amazing about all of the above is that the AMPTP followed almost to the letter a script which they themselves conceived and wrote earlier in the week. I had reported Thursday night that the reps for the studios and networks planned to break off today's talks. This morning, the WGA issued a sternly worded statement calling out at the AMPTP for the plan to stop the negotiation just as it was getting go. Indeed, just as I had predicted, the AMPTP had a news release at the ready tonight announcing why it was leaving the talks. So did IATSE local boss Tom Short, indicating he was working in concert with the AMPTP tonight to blame the WGA.

One thing for sure: no one can have any doubt this time around who walked out on these negotiations and who stayed in. Not even professional spin doctors can change that. And it's also obvious which side understands the concept of haggling.

First, here's the WGA statement which goes into detail about what happened tonight:

AMPTP BREAKS OFF NEGOTIATIONS
Today, after three days of discussions, the AMPTP came back to us with a proposal that included a total rejection of our proposal on Internet streaming of December 3rd.
 
They are holding to their offer of a $250 fixed residual for unlimited one year streaming after a six-week window of free use. They still insist on the DVD rate for Internet downloads.  
 
They refuse to cover original material made for new media.  
 
This offer was accompanied by an ultimatum:  the AMPTP demands we give up several of our proposals, including Fair Market Value (our protection against vertical integration and self-dealing), animation, reality, and, most crucially, any proposal that uses distributor’s gross as a basis for residuals.  This would require us to concede most of our Internet proposal as a precondition for continued bargaining.  The AMPTP insists we let them do to the Internet what they did to home video.
 
We received a similar ultimatum through back channels prior to the discussions of November 4th.  At that time, we were assured that if we took DVDs off the table, we would get a fair offer on new media issues. That offer never materialized.   
 
We reject the idea of an ultimatum.  Although a number of items we have on the table are negotiable, we cannot be forced to bargain with ourselves.  The AMPTP has many proposals on the table that are unacceptable to writers, but we have never delivered ultimatums. 
 
As we prepared our counter-offer, at 6:05 p.m., Nick Counter came and said to us, in the mediator’s presence: “We are leaving. When you write us a letter saying you will take all these items off the table, we will reschedule negotiations with you.” Within minutes, the AMPTP had posted a lengthy statement announcing the breakdown of negotiations.
 
We remain ready and willing to negotiate, no matter how intransigent our bargaining partners are, because the stakes are simply too high. We were prepared to counter their proposal tonight, and when any of them are ready to return to the table, we’re here, ready to make a fair deal.

John F. Bowman
Chairman,  Negotiating Committee

Prior to this, the AMPTP issued this statement:

We're disappointed to report that talks between the AMPTP and WGA have broken down yet again.  Quite frankly, we're puzzled and disheartened by an ongoing WGA negotiating strategy that seems designed to delay or derail talks rather than facilitate an end to this strike.  Union negotiators in our industry have successfully concluded 306 major agreements with the AMPTP since its inception in 1982. The WGA organizers sitting across the table from us have never concluded even one industry accord.

We believe our New Economic Partnership proposal, which would increase the average working writer's salary to more than $230,000 a year, makes it possible to find common ground.  And we have proved over the last five months that we want writers to participate in producers' revenues, including in theatrical and television streaming, as well as other areas of new media.  However, under no circumstances will we knowingly participate in the destruction of this business.

While the WGA's organizers can clearly stage rallies, concerts and mock exorcisms, we have serious concerns about whether they're capable of reaching reasonable compromises that are in the best interests of our entire industry.

It is now absolutely clear that the WGA's organizers are determined to advance their own political ideologies and personal agendas at the expense of working writers and every other working person who depends on our industry for their livelihoods.

Instead of negotiating, the WGA organizers have made unreasonable demands that are roadblocks to real progress:

-- They demand full control over reality television and animation.  In other words, they want us to make membership in their union mandatory to work in this industry - even though thousands of people in reality and animation have already chosen not to join the WGA.

-- They demand restrictions designed to prevent networks from airing any reality programs unless they are produced under terms in keeping with the WGA agreement.  This would apply even to producers who are not associated with the Guild.  Their proposal artificially limits competition and most likely would not withstand legal challenge.

-- The WGA organizers are demanding the right to ignore their bargained "no strike" provision, allowing them to join in strikes of other labor organizations.

-- Their proposal for Internet compensation could actually cost producers more than they receive in revenues, thereby dooming the Internet media business before it ever gets started.

-- They insist that writers receive a piece of advertising revenue - even though the producers that pay them don't receive any of this revenue in the first place.

-- They want a third party to set an artificial value on transactions, rather that allowing the market to determine the worth of each transaction.  This would result in producers having to pay residuals on money that the producers never even received.

These are the terms the WGA organizers demand for ending the strike - money that doesn't exist, restrictions that are legally dubious, and control over people who have refused to join their union.

Besides betraying a fundamental misunderstanding of the economics of new media, such as a streaming proposal that would require us to give them more money than we make ourselves, the WGA organizers are on an ideological mission far removed from the  interests of their members.

Their Quixotic pursuit of radical demands led them to begin this strike, and now has caused this breakdown in negotiations.  We hope that the WGA will come back to this table with a rational plan that can lead us to a fair and equitable resolution to a strike that is causing so much distress for so many people in our industry and community.

  1. Judge AMPTP's Ultimatum For Yourselves
  2. Talks Day #8: CEOs Run With Streaming
  3. WGA/AMPTP War Of Words: Who'll Blink?
  4. Talks Day #7: AMPTP "Stalling Tactics"; Are Moguls About To Quit Talks?
  5. The Operative Word Tuesday Is "Haggle"