The making of the Hollywood working class; how the writers' strike drove the Jaguar owners to the barricades.

How the writers' strike drove the Jaguar owners to the barricades 

Whew! For a while there it looked like America would have to endure an entire fall television season without new episodes of "Sonny Spoon." Now after a five-month strike the writers are back at work, the new season has begun, and the couch potatoes can rejoice.

In Hollywood, though, there is relief but no joy. The writers (and the producers for whom they work) resolved the narrow question of royalty payments, which was at the core of the strike. But the future looks uncertain for the dozens of studios that sell shows to the major television networks. In 1981, the major networks controlled 90 percent of prime-time viewership; now with competition from upstarts like Fox and CNN, that share has shrunk to 70 percent. Videocassette recorders are now in 60 percent of American homes, contributing to eroding network ratings and revenues. As of August 1, the advertising agency, J. Walter Thompson, had spent $500 million less on television advertising this year than last; up-front, prime-time network sales are expected to drop 6 percent this year to $2.9 billion. Less money for the networks means less money for the Hollywood studios. This, together with some dogs at the TV box office, has crippled certain studios. Lorimar Telepictures (producers of "Dallas") lost $86 million in 1987. New World Entertainment ("The Wonder Years") is nearly bankrupt, and the DeLaurentis Entertainment Group is under Chapter xi.

You're probably assuming a dispute between Hollywood writers and producers on the set of "ME Belvedere" would be different from gritty labormanagement showdowns in Youngstown: that it would be a family affair, pitting liberal against liberal, the affluent against the rich. Nothing could be further from the truth. There is as much animosity between, and shortsightedness among, labor and management in Hollywood as in any mill town in America, and there is the threat of competition, too. Do any of these scenarios-all present in the writers' strike-sound familiar? Management demanding rollbacks from labor while receiving multi-million dollar salaries and bonuses. Workers caring more about their own bottom lines-wages and profitsthan in fighting for a more democratic workplace where risk and reward are shared.

What producers and writers do share is a sense of self-pity that knows no bounds. With memories of the early guild baffles and anticommunist witchhunts, the writers see themselves as oppressed artists chained to the assembly lines of the Hollywood entertainment factory. At a minimum a writer makes $68,880 for a 40-week season. And they very frequently make several times that. The producers feel put upon: they take big risks, underwriting dozens of unsuccessful pilots and movies in search of a hit, yet they are among the highest paid executives in any industry.

There is no reason to believe Hollywood will be able to write itself a happy ending. Neither side has shown the willingness to temper its whining and meet the common enemy of outside competition. Like the steelworkers and factory bosses who squabbled between themselves while plants were moved overseas, the denizens of Rodeo Drive seem equally oblivious.

Ten years ago at least portions of 80 percent of all films were shot in Hollywood. According to Lionel Chetwynd, a former WGA board member, in 1987 only 20 percent were filmed there. During the strike, British writers easily geared up to write "Dallas" and "Knots Landing"; 20-year-old episodes of "Mission Impossible" were reproduced in Australia. It's hard to imagine the Decline of the Hollywood Empire, but of course in 1960 no one in Detroit had ever heard of Honda.

Divide and conquer

Television is called a medium, the comedian Fred Allen once remarked, because it is rare that it is well done. It is always expensive. To understand the writers' strike, it's important to understand where the costs and the profits are. While the networks are starting to produce more of their own shows, the vast majority are produced by independent studios, which sell them to the networks.

To make money, the studios sell to local stations and to cable networks the rights to rerun their shows. Last year 66 episodes of "The Cosby Show" were syndicated for a record per-show price of $5 million, catapulting its producers from an estimated $16 million deficit to more than $300 million in profit. It's not surprising, then, that so much of the fighting in the writers' strike centered on these residuals.

Why are the shows so expensive to produce in the first place? One major cost is labor. It is not unusual for members from as many as 22 unions to work on a movie set in a single day. If a scene calls for a fire in a fireplace, a member of the American Federation of Guards must be present to tend it. One stagehand (a "grip") moves furniture. Another stagehand (a "gaffer") moves lights. Teamsters musn't handle the equipment they deliver. Hair stylists aren't allowed to touch makeup. When a location is overseas, all members of the International Alliance of Theatrical and Stage Employees (IATSE), which includes electricians and engineers,

must fly first class. By the time all the unions' work rules and minimum staffing requirements are met, the cost of a blown-up sports car is the least of a producer's problems.

Labor hasn't cornered the market on excess. Along with the producers, many studio executives are among the highest paid in America. Michael Eisner, the chief executive officer of the Walt Disney Company, received $6 million in salary last year. He also took advantage of stock options of more than $31 million.

More damaging than these eight-figure earnings is the way management bargains with Labor. The Alliance of Motion Picture and Television Producers (AMPTP) negotiates contracts for more than 200 studios and production companies. The AMPTP is designed to divide and conquer It practice"pattern bargaining"-negotiating with one union at a time, pining unions against each other. In negotiating with the Writers Guild, for instance, the AMPTP's opening gambit was to say that, since the Directors Guild of America (DGA) accepted diminished residuals in 1987, the writers had to follow suit in 1988.

Pattern bargaining, which is practiced elsewhere by such friends of the working man as the chairman of Texas Air, Frank Lorenzo, antagonizes labor, encouraging it to be selfish. Dictating to one union on the basis of agreements made with another is certain to alienate the rank and file. And isolating negotiations makes each union wary that it alone will have to make concessions. Perhaps that is why, in the five years since the producers formed the AMPTP, Hollywood unions have gone on strike six times. The writers' union hates this practice, not least of all because it's a reminder of its past.

The black and the gray

"I think we've lost our romance with the word," said Steven Spielberg in 1986 on receiving the Academy of Motion Picture Arts and Sciences' Irving G. Thalberg Memorial. Fifty years prior to Spielberg's lament, Thalberg, head of production at MGM during the 1920s and 1930s, paved the way for the current enmity between writers and producers by scheming to break up the newly formed Screen Writers Guild.

Today's writers feel so besieged because they're still swept by the romance of the barricades. After all, the Screen Writers Guild was born in April 1933, in the throes of the Depression, when management across the country was negotiating with Pinkertons and billy clubs. The following January Paramount and RKO declared their theater chains bankrupt; by March the studios were unable to meet their payroll. They imposed an eight-week, across-the-board wage cut of between 25 percent and 50 percent. At the time the only union in Hollywood was the IATSE. After it successfully fought the pay cut, the writers decided to organize-spurred by the old saw about the secretary who got promoted to writer and on payday instead of $60 a week, she got $40.

The studio chiefs would have none of it. They fired union writers the Wednesday before Thanksgiving and rehired them Friday in order to save a day's pay.

When the SWG persisted in its fight for higher wages and recognition in 1936, the executives, led by Thalberg, created a company union. Writers who remained active in the SWG and refused to join the company union saw their names on a "gray list" and found it more difficult to get work. Dudley Nicholas refused his Oscar for best screenplay in 1936 because of the way the studio executives were treating SWG members. In 1938 the National Labor Relations Board ordered Hollywood writers to align themselves with a single organization. An election was held and the SWG defeated the company union. In 1941, nine bitter years after its formation, the SWG signed its first contract with the producers.

After the war there was no solace, just McCarthyism and the demonizing of writers. In 1947 Jack Warner of Warner Bros. told Congress that "Communists injected 95 percent of their propaganda into films through the medium of writers." Ten Hollywood writers were cited for contempt of Congress-and later blacklisted-for refusing to name names. And while most people remember the question, "Are you now or have you ever been a member of the Communist party?" few recall that it was precede"Are you now or have you ever been a member of the Writers Guild?" Given this rocky history one can see why the writers went into last summer's strike with clenched fists.

Solidarity and 'Dynasty'

The producers fired the first shot, presenting the Writers Guild with a take it or leave it offer. Under the contract that expired March 31, writers received a fixed royalty of $16,920 for six nationally aired reruns of one-hour shows. The AMPTP wanted a flexible formula based on the individual show's resale value. This would establish the important principle of linking pay to performance: if viewers tuned in, the writers would profit; if they didn't, the writers would lose. In the current market that meant rollback.

When the writers turned the AMPTP down and went on strike, the producers refused to negotiate. For 12 weeks, with the exception of one 20-minute session, the producers stayed away from the bargaining table. They refused to submit the dispute to binding arbitration, insisting their offer wasn't negotiable.

It's not that the writers wouldn't accept flexible payments. They simply asked for a quid pro quo: flexibility on domestically syndicated shows in exchange for a flexible schedule on shows sold abroad. A 13-country study by Young & Rubicam found that on privately owned European commercial networks, 47 percent of the shows are American. If England love "Who's the Boss?" why shouldn't the writer in Encino profit?

Under the previous contract writers received a one-time-only residual on those foreign sales (for an hour-long show like "Little House on the Prairie"-the hottest show in China-they got $4,400). The guild's counterproposal was that writers receive an additional payment each time a show is sold to broadcasters and cable operators around the world. For an hour-long show, $637. For a half-hour, $330. For a show like "Moonlighting" which costs more than $1 million per episode to produce, $637 would add an annual cost of sixhundredths of 1 percent.

The producers said they couldn't afford it-even though in 1987 the seven major Hollywood studios had combined revenues of more than $11 billion.

(While some studios are hurting, others are faring well, in part because of diversified holdings outside of Hollywood.) Between 1986 and 1987 profits rose at MCA/Universal (89 percent), Warner Communications (76 percent), Disney (80 percent), and Paramount (130 percent). Even if the swdios were broke, the guild proposal would not have been onerous: foreign residual payments would not be made until the studios had recouped all production costs. "Their [the producers] approach was simple," says Christopher Knopf, a writer and producer for Orion Television. "They didn't give foreign residuals to thedirectors and they were not going to give them to the writers." Of course, giving the writers a stake in the foreign profits could have lent the producers a kind of moral authority. "Okay," they could have said, "you want profit, you can have it. But you have to share the risk if a show flops."

After 16 weeks the AMPTP edged towards this sensible position, offering writers an option: continue receiving the $4,400 fixed payment or change to a sliding scale based on 1.2 percent of a show's gross foreign receipts, with a cap of $5,700. The Writers Guild had achieved a major victor breaking the AMPTP's pattern bargaining, forcing the alliance to offer the writers what it had the Directors Guild of America. Nevertheless, the guild leadership recommended the membership vote the offer down. It did.

The guild made it sound as if they were the United Farm Workers, being handed the most meager of scraps. But the difference between what the writers wanted and what the producers were offering was a difference, literally, of six-tenths of I percent. (Instead of 1.2 percent of gross foreign receipts, the guild leadership wanted 1.8 percent.) "Brian Walton [the writers' leader] said if he had received this offer three weeks into the strike instead of 16 weeks into it he would have taken it," says Lionel Chetwynd.

The striker's Jaguar

A few writers recognized that perhaps this was not an epic struggle worthy of Joe Our leadership has abdicated its responsibility"' said David Milch, former executive producer of "Hill Street Blues," when asked during the strike's fourth month about such hairsplitting. "They are more concerned at this point with justifying their own conduct than with responsibly bringing this strike to a close."

But far more preferred to talk in glowing terms of Labor solidarity and the need of workingmen to stick together in the Reagan era. "You had [National Association of Broadcast Engineers and Technicians] losing to NBC, PATCO losing to Reagan, and Frank Lorenzo union-busting at Eastern," says Jim Sadwith, an Emmy-nominated television writer, "a string of very public union conflicts won by management. We wanted to put a stop to that."

But the final package shows that they really were grandstanding. Instead of the previous fixed royalty of $16,920, the domestic one-hour residual formula was indexed to producers' revenue from reruns, with a minimum of $8,460 and maximum of $25,380 for six showings nationwide. The foreign residual package was unchanged-writers have the option on one-hour residuals of accepting a fixed $4,400 payment or 1.2 percent of the producer's revenues, capped at $5,700. And for all the hardship this issue caused, it is unlikely that writers will see any additional money from foreign residuals. The writers get bonuses only when foreign sales hit $366,000 per episode, a summit that only "Dynasty" and a handful of other big sellers have reached.

"The strike cost me six figures in cold cash," says Christian Williams, a writer and former editor at The Washington Post. 'And for what? For what principle did I write a check for six figures?" Williams, who in his 20 years as a journalist endured two newspaper strikes, can think of none. "The Labor movement of the 1930s was about living conditions, a fair shake, and what is America. This strike was not about [that]; it was about money'"

Other writers portray their fight as a Depressionera struggle. "To cast the strike in terms of dollars and cents was a heresy," says John Romano, a colleague of Williams's at Mary Tyler Moore productions. "You had to couch it in terms of how horrible management is to the workers."

This the writers had no trouble doing. At a union solidarity meeting in July, for instance, actor Robert Culp retraced the last ten years of Labor-management relations in America. "Time and again the men in the suits went to the workers and asked for relief," said Culp, who starred on television in "I Spy" and is a WGA member. One lumpen to another, he added "The suits have a master plan to destroy us."

Culp received a rousing ovation. When the meeting broke, 12 of his besieged brethren drove off in Mercedes Benzes (nine sedans, three coupes); seven in BMWs; four in Jaguars; and two in Porsches. Stephen J. Cannell, a writer and executive producer of "Hunter," "Wiseguy"' an"21 Jump Street," was not at the meeting, but he knows the power of Culp's message. At the end of each show he produces, Cannell, whose company employs 2,000 staff members and churns out $150 million worth of programming each year, is shown madly pecking at a typewriter. "I do [that] ," he told the Los Angeles Times, "because I've never wanted to be perceived as a suit."

Hollywood writers angrily fight their portrayal as millionaires with pickets. And with some reason; of the more than 9,000 members, at any one time just over half are employed. While 28 guild members sped away from the July solidarity meeting in style, more than 700 drove off in mere middle-class comfort.

Still, the strident tone of Culp and other WGA members belies the writers' overall affluence and their ability to rise into the ranks of management. Practically every prime-time television show is produced and, in part, owned by former writers, For these executive producers, television can be extraordinarily lucrative. When "Family Ties" was sold into syndication, Gary David Goldberg, a former writer who created the show, reportedly made $20 million.

Amid Hollywood's Labor-management battles there seems little hope that progress can be made against the culture of excess that permeates the industry. The minimum fee for a one-hour script is $18,000. A feature-length movie commonly nets writers $300,000. Directors typically make twice as much as writers, and for actors the sky is the limit, In 1980 actors and actresses made $10,000 for appearances on hour-long dramas. Today fees run as high as $50,000.

As for the industry, increase the WGA-AMPTP enmity twenty fold and you can begin to see how intractable Labor-management relations are in Hollywood. Contract renewals do not always result in strikes, but between the alliance and entertainment industry unions there is no such thing as an easy negotiation. "You just know the DGA [Directors Guild of America] is upset it gave in on foreign residuals," says "The next time around it will want what the writers got."

Sharing the risk

If Hollywood is going to adjust to the declining prominence of the TV networks and the rise of VCRs, it will have to abandon the adversarial labormanagement tradition that has proved so destructive to American capitalism. How much better it would have been to scale those "caps" back so that writers could count on making a fortune if their shows did well and would take their share of the burden if they flopped.

Among producers the notion of sharing profits remains more than a little foreign. During a particularly heated bargaining session a producer reportedly said that paying a writer a royalty when a show he wrote is rerun is "like paying the plumber something extra every time I flush the toilet."

But the producers have little choice but to work out a sensible system of shared risk with the writers. As the big three continue to lose market share to cable and independent stations, their willingness to pay more than a million dollars an hour for programs will diminish. "Unless producers can pass some of those cuts along to the WGA [and other guilds] they will get out of the one hour business," predicts John Romano.

In the end what the writers' strike may be remembered for most is clobbering more than 200,000 members of the real working class-dry cleaners, technicians, restaurant workers and more: innocents who learned first hand the perils of working in an industry in which Labor and management are both shortsighted and selfish.