Variety and AMPTP spin the news

by Paul William Tenny

A Variety writer yesterday wrote what amounted to a blog post whining about how writers are being mean to his company, after accusations that Variety has been leaning heavily towards the studios and networks in their coverage since before the strike began, was officially declared a mountain. The only question today is which sides spin to start with, Variety's, or the big media association.

The trade mags headline this evening says that the "Gulf widens between WGA, AMPTP" while noting below that the AMPTP's President and negotiator Nick Counter has actually come down off his demand that the strike be suspended before he'd return to the bargaining table. That sounds like a concession to me, even if it's a small one, it's far and away from the backward movement Variety says it is.
For their daily dose of hilarity, the AMPTP is spinning the numbers in ways that would make Enron proud:

The AMPTP went after the guild's proposal on digital downloading, noting it's seeking a 700% hike on electronic sell-through and more than a 200% increase on Internet "pay per view."

700% and 200% sounds pretty greedy, doesn't it? I imagine most reasonable people would scoff at such a proposal, without taking the time to know precisely what those numbers really mean. I'll save you the time, here's where I dig you out of the knee-deep bullshit we've all been wading through for the past three months.

When the AMPTP says that writers are seeking a 700% increase in "electronic sell-through", they're talking about digital downloads (iTunes, Amazon Unbox) and streaming video (,, virtually all networks have sites.) However, those numbers are based on what the AMPTP wants rather than what reality is. You see, writers don't actually make any money on digital media at all. At best, the AMPTP wants to pay them at the DVD rate (0.2%), and the writers want 2.5%.

That folks is how the studios got to that figure. First they pretend that writers are getting 0.2% of digital media (they aren't getting paid anything right now) because all the studios are willing to give them is the same 0.2% they get for DVDs. Then they took the actual figure writers want, and did the math. (By my math, the difference between 0.2% and 2.5% is actually 800%, not 700...)

But like I said, writers aren't getting paid anything at all right now so they aren't asking (or demanding) an increase at all - they're demanding something instead of nothing, period.

You won't find an explanation like that in Variety for obvious reasons. They'll happily repeat the crap coming out of Nick Counter's mouth, but they won't pull back the curtain to show you what's really going on.

If you want to be spoon-fed by Variety, be my guest, but this is my take: The WGA and AMPTP are closer now to coming back to the table than have been at any time in the past ten days, even if the distance traveled is only inches. That simply doesn't equal a gulf widening in this reality.

Both sides will eventually come back to the table, probably after the networks start feeling real financial pain from not having any scripted shows airing new episodes. At the earliest, that's January. This thing has just barely gotten started and for much of the next two months, the AMPTP won't feel much of anything.

That of course hasn't stopped some late night talk shows from firing people already, below the line works every single one. I have heard that executives are having their expense accounts curtailed, but that doesn't reflect their salary - these guys at the top who forced this strike will continue making $15-30 million dollars this year, and $15-30 million next year, and the year after, and the year after that, no matter how much their companies lose from this strike, regardless of how avoidable it was.

The execs on that side of the table have absolutely nothing at stake in this personally, while writers are struggling *right now* and a lot of them are going to lose their homes because of this, and we're not talking about jobs that once retaken will allow them to get those homes back.

The studios/networks have estimated that the residuals writers are seeking would cost them somewhere in the neighborhood of $200-$275 million per year. To make the number as large as possible, you have to figure that this number reflects what it will cost all of the networks/studios combined, and that they've inflated it as best they can to make it look as scary as possible.

For shareholders in these companies, please consider that the last strike cost the industry about $500 million directly, and I'm hearing a number anywhere between $5-10 billion for this one, should it go six months or longer. I ask you to sit down with a calculator and do the math yourself. Call your fund manager, have him call the largest shareholders, have them call the chairman and all of the board of directors and tell them to make a deal.

$200 million a year, if that's even accurate, is a small price to pay against a $5+ billion dollar loss. Wouldn't you say?
in Labor


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