Writer’s Strike: an interesting perspective

I have a friend in the movie business, and he had a very interesting take on the current writers’ strike. The writers’ guild has their contract up for negotiation right now, but the actors’ guild and the directors’ guild are both up for contract renewal very soon. My friend says that the reason the writers guild negotiations went to a strike is because the studio executives want to instill fear into the actors (and to a lesser extent the directors) over this sort of thing. The studios can survive for months if not years with all the scripts they’ve stockpiled (not counting topical TV shows like The Daily Show). However, if the actors strike, the studios will be in trouble. They hope the actors get scared enough from this strike that they’ll make extra concessions in their new contracts.

On the other side, the writers’ demands are a little silly; they are requesting royalties even before the producers have recouped their investment in the movie (i.e., if it cost $10 million to make the movie, the writers are requesting royalties before that $10 million is made up). I suspect this occurred because the guild began by requesting more than they really wanted (so they could be “negotiated down” to what they were actually after), and the movie studios took a hard line to scare the other guilds, and simply didn’t negotiate. My friend expects the strike to be over as soon as the actors guild finishes renegotiating their contract. I suspect it will resolve so that writers get royalties on all electronic media after the studios have gotten their investment back.

On a semi-related note, I had no idea how much money writers earned! Apparently movie scripts are purchased for $250,000-$5,000,000, not counting any royalties that come in after the film has been made. If you manage to sell one script every three years, you’re sitting pretty.

I don’t know how much of this is correct and how much is just my friend’s opinion. However, he has more of an insiders perspective than anyone else I know, so I thought I’d put this out there. Can anyone confirm or deny that this is what’s going on?

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  1. The way I had it explained to me by an insider-type person is that the writers were asking for a percentage of the advertising revenue online, which is considered retail, rather than a percentage of what the website pays the studio for the content, which is considered wholesale; on all other media, the writer’s get a percentage of the wholesale not the retail.

    I don’t see why getting royalties before cost is recouped is necessarily silly.

    • Alan says:

      I don’t see why getting royalties before cost is recouped is necessarily silly.
      The writers have already gotten paid for their part of creating the movie. Why should they make extra money before everyone else has broken even?

      Then again, Reply to this comment

  • The writers have already gotten paid for their part of creating the movie.

    According to this premise the writers should not necessarily get royalties at all; what’s the rationale behind giving out extra money?

    One theory of royalties is that they are not extra money at all, but rather part of the value of their work paid out over a period of time.

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