"Fair market value" bill advances in CA Senate

by Paul William Tenny

I linked to a story in Variety yesterday about a bill winding its way through the California senate that would force the giant media conglomerates to stop selling their own shows to their own stations at fire-sale prices in order to screw creative talent. It's important to both sides if it makes it into law and can be effectively enforced, as it will put an end to the dishonest creative accounting practices that have been taking place for years. Take a company such as General Electric, which owns NBC-U (a studio that produces shows and movies), NBC (the network that licenses and broadcasts shows and movies), and at the very least both the USA and Scifi cable networks.
As a real life example, NBC-U produces and owns House even though FOX broadcasts it. After its initial run, NBC-U is free to shop the reruns around for syndication anywhere it pleases (except probably on NBC) for any price it wants. If it makes a deal with FX for example, they'll see the syndication rights for as much as they can possibly get. Since the residuals actors, writers, and other creative talent make are based on that price, the owner (NBC-U) ends up paying a hefty fee. Writers can make upwards of $20,000 for the first-run syndication rights in residuals.

So it occurs to GE that they could sell those rights from NBC-U, which it owns, to USA, which it also owns, for as cheap as they can possibly get away with. That means creative talent gets a fraction of what they would otherwise -- in some cases just dollars or less -- while the companies collectively roll in the advertising dollars. Writers and other talent hate these practices but there's nothing they can do about it, so it'll only change with legislation such as this. According to Variety, a bill that would require the congloms to sell their programming at "fair market value" made it out of committee and will head to the state Senate at large.

GE will try their best to kill it by throwing mountains of money at their full-time lobbyists who will in turn throw mountains of money at state legislators. I don't know if they will succeed or not, but with a mostly Democratic Assembly (and Senate?) in a very Democratic state, I can see this making it to the Governors desk eventually -- where it will die a quick and gruesome death. Schwarzenegger likes to pretend that he's a moderate Republican but really when it comes to favoring the interests of businesses over human beings, there's no such thing. Schwarzenegger was firmly on the side of the studios during the strike and had no intention of lifting a finger to force it to an end, even with the enormous damage to the L.A. economy it was causing.

And that brings me to the hilarious MPAA response:

Though not unexpected, today's vote by the State Senate Judiciary is regrettable. SB 1765 is an ill-conceived bill that would criminalize legitimate business decisions by producers of movies and TV programs as they seek to generate revenue created for producers and talent alike. Films and television shows would have to be immediately sold to the highest bidder, upending the successful business practices that have made the entertainment industry a vital engine in the California State economy, creating more than half a million jobs and bringing nearly $43 billion of economic activity to the State each year.

Though I don't have the legislation in front of me, I'm pretty certain it doesn't require the congloms to sell their programming to the highest bidder -- unless their definition of "fair market value" somehow differs from mine, anyway, I'm pretty sure this law would ensure they don't give it away to cheat the content creators. I'd also note that every law criminalizes legitimate business decisions, since as far as the law is concerned, every decision is legitimate unless defined otherwise. There are plenty of laws that make such declarations revolving around competition -- or a lack thereof -- that are accepted as necessary, although probably unfair. The good that comes from laws such as these far outweigh the burden on the companies, and the state has a compelling interest in seeing healthy competition for syndication rights that benefit the entire market and the workforce as a whole.

It's also amusing to see the MPAA crow about what a threat this bill poses to the state economy. During the strike, the L.A. city council held a meeting for the sole purpose of addressing the on-going damage to the economy due to the strike, which was attended by WGA representatives and nobody else. The AMPTP said matters such as this were traditionally handled by the MPAA, and the MPAA never showed up. They only show concern for jobs and the local economy when it can be used to make their own dishonest arguments seem plausible, otherwise they just don't give a shit.

So in that single paragraph, there's the lie about programming behind sold to the highest bidder (which would be fantastic for the studios) and the faux concern about the local economy that they blew off as irrelevant three months ago without ever addressing the actual concerns of working creative talent.

Of equal concern, this bill would essentially force a legislative 'do-over' of the collective bargaining agreement that settled the writers' strike, which cost the California economy $2.5 billion.

The agreement was ratified and is legally binding, it cannot be "done over". It's also not really relevant to what's going on right now concerning this legislation anyway, this is a total non sequitur meant to scare moderate conservatives in the Senate into blocking its passage. Notice there is nothing in this statement about the DGA deal, or the pending SAG deal? This statement is so bizzare that it's almost as if the MPAA were using it as a petty excuse to defame writers.

Writers and producers made an extraordinary effort to reach a fair deal that put an end to that work stoppage. Enabling the Writers Guild to do an end-run around the collective bargaining process would set a dangerous precedent for future labor negotiations.

"Producers" who aren't actually producers but simple corporate management walked out of talks twice, held their breath, and lost spectacularly. There was extraordinary effort for sure, but that effort was to bust a union and screw creative talent even more than it already has been. This bill actually represents a trend that began with the victory of the WGA over the AMPTP towards pushing back decades of rollbacks in workers rights and fair dealing. It only represents a fraction of what should happen to balance things out, but it's a very good start.
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