Tuesday’s talks ‘didn’t move the ball forward’ – The Hollywood Reporter

Ken Zeffrin

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Ken Zeffrin, a veteran entertainment attorney who has served as L.A.’s cinema czar since 2014, casts doubt on whether negotiations between the Writers Guild of America and the Motion Picture and Television Producers Alliance made progress. He said that Tuesday’s meeting between the two sides “did not move the ball forward,” indicating that they are still far apart.

“It’s questionable whether the lack of programming we’re showing will motivate any of the studios or SAG-AFTRA or the WGA to sit down again and get on with the business,” Zeffrin said Wednesday at a media and entertainment lawyers event hosted by Beverly. Bar Hills.

AMPTP and the WGA met Tuesday to discuss the studios’ Aug. 11 counteroffer, with WGA East leadership traveling to Los Angeles to review the studio’s proposals. The move signaled that talks had become more serious since Friday’s sit-down, which marked the first official return to the negotiating table since the strike was called on May 2. Hollywood Reporter What they concluded was that a deal was not forthcoming and that the two sides were still working out the issues. The WGA did not send a post-meeting communication to members.

Ziffrin referred to the ACDA agreement as a “good deal” and said it should serve as a model for resolving contentious negotiating points around AI and performance-based tailings.

Less than two months after the writers’ strike, the Directors’ Guild quickly came to terms with AMPTP in an agreement that included a new tailings formula and an obligation for companies to consult members when using generative AI “regarding creative elements.” Both sides highlighted a new formula for foreign subscription video-on-demand (SVOD) residuals that revolves around the number of international subscribers to a given platform. Under the deal, the largest streaming service commits to paying $89,415 in leftovers for the one-hour series for the first three years of use (representing a 76 percent increase in foreign tailings and a 21 percent increase overall).

“This is where the future lies in getting more hangovers,” said Ziffrin, who has long worked with the DGA. “The Directors Guild negotiated a one-hour series left over for an expensive video series that’s better in double digits than those on the network, whether broadcast or cable. That fact just didn’t reach the audience it should.”

Zefrin added that he suspects studios will agree to add several million or hundreds of millions of dollars to this world by adding some kind of performance base that may or may not be related to their respective revenues. He said all of the seven major studios and broadcasters, except for Netflix, are losing money under the current framework.

Hangover emerged as a major issue in the strike. For streaming titles, the WGA has requested viewership-based residuals, in addition to existing fixed residuals, in order to “reward programs with greater viewership,” according to an April document detailing the union’s offer. AMPTP refused to submit a counteroffer at the time because that would require data transparency, which viewers were strongly against.

More than 100 days after the strike, there is no clear path to resolving the work stoppage. Zefrin criticized the way the two sides handled the negotiations.

“It seems to me that if we can start to have each side send out a piece of paper about AI — figure three, four pages — of their positions on all the issues, and trade those pieces of paper, and sit in a room and talk it through rather than the situation, We will get close to full employment if we do that,” he said.

The WGA accused AMPTP of leaking information about the meetings to the press despite a “blackout” preventing either side from doing so.

On the issue of profit sharing, specifically a new rewards methodology on TV talent deals that allows studios to have ultimate control over the distribution of their shows, Zefrin said his clients prefer this framework to the old model based on adjusted gross receipts (MAGR), or revenue earned by studios. of the series minus distribution fees, expenses and production costs. While MAGR-based profit sharing offers the most significant upside, it has been made clear that the new model will likely result in higher average payouts.

“Given the season’s low episode count — which he won’t forgive me — it might be better to go for a multiplex than a home run,” he said.

In 2020, Disney unveiled a so-called reward series fair on subscription show deals, which rewards revenue participants with bonuses for longevity, program ratings, awards like the Emmys or Golden Globes and library performance, among other factors. This has become the standard offered by Disney and Fox.

Amidst the strike, CEOs’ salaries are also under the spotlight. Barry Diller, chairman and chief executive officer of IAC, Expedia Group and former head of a Hollywood studio, said in July that top executives and top-paid stars should take a 25% pay cut to narrow the gap between their salaries and those of employees at the company. . the lower end of the scale. Asked about the proposal, Zeffrin said, “Barry looks at me like he’s a guy out of work trying to get back at it.” He added, “Each company will decide independently of the others about the compensation that will be paid to its executives.”

Katie Kilkenny contributed to this report.