Strikes Possibilities Decrease

The Hollywood Reporter has posted that AFTRA has approved the contract with the studios by 62%. Not exactly overwhelming but enough to get ratify the contract and keep members of that union (many of which are also SAG members) able to remain on the job. AFTRA is a "sister" union of SAG that broke away over disagreements on how the negotiations with the studios where being handled.

"Clearly, many Screen Actors Guild members responded to our education and outreach campaign and voted against the inadequate AFTRA agreement," SAG president Alan Rosenberg said. "We knew AFTRA would appeal to its many AFTRA-only members, who are news people, sportscasters and DJs, to pass the tentative agreement covering acting jobs. In its materials, AFTRA focused that appeal on the importance of actor members' increased contributions to help fund its broadcast members' pension and health benefits."

It’s pretty clear that SAG isn't done and they will continue to hold a hard line to get what they want but it does reduce their bargaining position as they remain the only holdouts. I doubt they are winning any friends either since they are asking for concessions beyond what the writers and directors agreed to pretty much confirming my opinion that actors consider themselves the most important part of Hollywood and thus should get more. In this day and age of tech and the quick rise and fall of stardom, I disagree with that notion.

End result is a strike is in the best interest of nobody and I doubt at this point that even if SAG sent out a call to strike to its members it would get the approval numbers (I think 75% of the membership) needed. What happens next is unknown as SAG has not formally rejected the last proposal from the studios but given every indication that they intend to.

In regards to Transformers, this just means the status quo remains. Since no strike, the schedule (whatever it is) remains the same. If a strike does occur, Bay can now simply work with AFTRA members and film around scenes that require the SAG leads until they become available. The issue isn't the filming schedule itself, the issue is giving ILM and Digital Domain the time they need in post-production to complete the special effects. If worse case scenario occurs (a long term strike), I imagine Bay could simply use stand-ins to at least give the FX teams the footage to work off.

The way I see it, short of a 6 month or more SAG strike, the AFTRA deal pretty much insures that Bay should be able make his release date for Transformers 2.

SAG Strike Threat Grows

LA Times is reporting that the strike threat has Hollywood on edge as the countdown continues to June 30th when all SAG actors are likely to strike as talks between SAG leadership and the studios have failed to reach an agreement.

The talks have become so continuous that the American Federation of Television and Radio Artists (AFTRA) broke away from SAG after more then 25 years of co-representation and where able to reach an agreement modeled after those reached with the Director's Guild of America (DGA) and Writers Guild of America (WGA). SAG has refused a similar agreement citing it not going far enough to meet their demands.

This disagreement with handling of this issue extends beyond the AFTRA to include the SAG membership itself with many members expressing dissatisfaction with the lack of progress and the hard line that SAG leader Alan Rosenberg has had. The heart of the disagreement is DVD residuals, cut of advertisement fees used within a project, and fees for their images being used online. Essentially they want more then already agreed on with the DGA and WGA and as a result the studios are balking.

The actually strike is not expected to start until after July 8th. In part because of the July the 4th holiday but also because on July 8th, AFTRA's membership is expected to vote in support of the reached contract. If that occurs it could put a major dent in SAG's position. Despite that, 90% of SAG’s membership fuels the TV and movie industry so a strike would bring Hollywood to a near standstill.

SAG has granted waivers to 350 independent films (those made outside the studio system) but major studio projects have not been granted waivers as a result this directly impacts Transformers: Revenge of the Fallen which has built-in hiatus to plan for the event. The length of this hiatus is not known and if the strikes goes past the planned schedule that could prevent the movie from meeting its release date.

So to sum, SAG doesn't appear close to an agreement. If a strike occurs it will likely start July 8th or shortly after. Transformers 2 production is already shut down and when they return is unknown. The impact on current and future projects will pretty much be immediate.

Writer's Strike Officially Over

With 92.5% of the Screen Writer's Guild approving, the Writer's Strike is officially over and the writers will return to work on Wednesday. All that is now left is to cross the ts by getting the guild members to sign off on the contract which will take a few weeks and expected to pass by overwhelming numbers (otherwise why end the strike).

The Oscars will go on as planned with Jon Stewart as host (yay!!) but awards giving out and other boring junk. TV writers will be back with some shows done for the season and others shooting for as high as 8 episodes put in the can to finish the season. This means that Bay's Transformers 2 script can get that spit polish from Orci, Kurtzman, and Kruger

Writers Reach Tentative Agreement

The Writers and Studios have reached a tentative agreement that may end the strike. The agreement was delivered Saturday morning around 2:30am, presented to around 3500 members in Hollywood but still needs to be accepted by the WGA's 10,500 writers. This process will take up two weeks do to most of the votes will be delivered by mail (nuts considering probably all 10,500 writers have email).




If approved, this means that many TV shows will have time to get 4-6 episodes completed to finish off the season in May. Probably more important to Hollywood, it means the Oscars will go on as scheduled. It appears that the writers did get concessions in the area of internet revenue and apparently the DGA played a huge part in helping shape a deal as it provided the needed blueprint to move forward in negotiations. Considering the WGA leadership is supports the agreement, its doubtful that the majority of the membership will reject it, especially since it’s been suggested that if its not approved the studios will not renew negotiations until June when the Screen Actors Guild contract expires. That would mean at least another 4 months of striking and no payments on top of the previous 3.

The full summary of the deal is here, but here are some highlights:
- Contract expires May 1, 2011
- Minimum rates will increase 3.5% per year but with exceptions.
- Writers will get payment for internet content with minimum payments for each minute of a program depending on how used.
- Internet content will now provide credit information with the program.
- Internet content that airs on TV or becomes a TV series or film will then operate under the various TV agreements. (I.e. more money)
- First 13 weeks of online content is residual free if the content is free and 26 weeks if content is not free with a few exceptions. After that the residual fee is 1.2% of the distributor's gross rather then producer's gross.
- Receive 1.2% of distributor gross for rentals and ad-supported streaming (for movies made after July 1, 1971).
- Receive 2% of distributor's gross for ad-supported television for programs made after 1977.
- Receive .36% of distributor's gross for 1st 100,000 download of TV program and 1st 50,000 of a movie. After that its goes to .7% for TV and .65% for films.

There are more details then that but that’s the important stuff. The strike was to get money for online content in whatever manner it was used whether for promotion, ad-revenue or outright purchase. Another win is changing the value from the producer’s gross to the distributor’s gross. This will help avoid the creative accounting that was used by the producers to avoid residual payments. In addition, since the contract is only 3 years long, the WGA will have the ability to adapt faster to any changes or tricks that may arise in the meantime. The studios probably will also consider this a win considering that the WGA's goal had been a 2.5% fee for any and all online content and that number has been cut in half in most cases with a window of up to two weeks before any fees kick in. Long story short, the middle ground was found.

In regards to Transformers 2, the impact is rather small depending on point of view. Bay has made it clear that whether the strike continued or not, the movie was going to get made, a writer's agreement doesn't change that determination but does make it easier to succeed. Probably more important, it means the writers will be writing the movie rather then Bay. Depending on your opinion of Michael Bay as a writer vs. Roberto Orci, Alex Kurtzman and Ehren Kruger this is a good or bad thing. Personally I wouldn't mind reading their draft and compare to Bay's just to see what the difference, if any, in quality.

One final note, the Screen Actors Guild contract expires in June, around the time that principle photography for TF2 is scheduled to start. If they strike, the intended release date could still be impacted. However, with the Director's and Writer's Guild agreements available as blueprints, it should be much easier to work something out and avoid a strike all together.

Bay Writing Transformers 2

With an agreement reached for the Director's Guild of America, at least one impediment to Transformers 2 making its June 24, 2009 debut date is gone. All that's left is the end of the WGA strike and AMPTP working something out with SAG. Until then, apparently Bay has decided to take pen to paper himself and pen the script for the movie.

From Variety:

Director Michael Bay said he was cautiously optimistic, but that he has been preparing to get a "Transformers" sequel into production, strike or no strike.

"We knew from early on that the writers strike could get ugly, and this has got to bring a little sanity to the situation," Bay said. "I can't do the movie without my writers, but I have been prepping. I'm not in the guild, but I've been writing every day. This strike (is) insane, and a director's responsibility is to the 50 crew members who depend on you for their livelihoods. We've got battle plans ready for the possibility of an actors strike. Somehow, you've got to keep the ball rolling."

The movie, because its CGI and action heavy, doesn't have the same reliance on dialogue and actors as most movies. The time from script to screen is long, not because of the filming itself but because of the longer pre-production and post-production that it requires. For example, Transformers took about two years from greenlight to screen, only 3 months of those 24 was actually shooting work. Because of this time and expense, the large action sequences and CGI is usually set in stone early in the film process so work can begin.

With careful planning, Bay could pretty much film the entire movie, sans words and actors. Since he is writing the movie (so far) he can even do the Transformers dialogue, use stand-in actors, and pretty much come up with a near final version of the movie. Once WGA or SAG work out agreements, the dialogue can be replaced, re-shoots done and the stand-ins either practically replaced or done with computers. I almost want the actors to strike just to see if its possible because it could revolutionize how filming is done.

DGA and AMPTP Sign 3-Year Deal

The Director's Guild of America and Alliance of Motion Picture and Television Producers have worked out a three year deal that put to bed any fears that Director's would go on strike this June. It also may provide a template to help the WGA work out an agreement. Looking at the below, I wish I could work out such deals with my bosses considering that "show rate" basically means per episode. Might actually be able to afford an HDTV then. They get paid more in directing two episodes of TV then I earn in a year. I think I picked the wrong career. Anycase, it might help end the WGA strike as a template to build an agreement now exists but I think the ego of the leadership on both sides may interfere with things for a few more weeks until pressure builds and someone (I think on the WGA side) is replaced.

So what this has to do with Transformers in general is it means that Bay can continue to work on the movie. With the writer's strike still going on they might not have a finalized script, but usually the big action and CGI heavy sequences get locked in very early in the scripting process (because of the pre-prep and time it takes to shoot) so he could film much of the movie and do the dialogue and actor stuff at a later date if plan carefully enough.

The agreement includes:
Wage Increases
- Compensation for all categories except directors of network primetime dramatic programs and daytime serials increases by 3.5%, each year of the contract.
- Compensation for directors of network prime time dramatic programs and daytime serials increases by 3%, each year of the contract.
- Outsized increase in director's compensation on high budget basic cable dramatic programs for series in the second and subsequent seasons:
- For 1/2 hour programs: 12% increase in daily rate and increase in guaranteed number of days to 7 days.
- Results in show rate increasing from $9,009 to $11,760.
- For 1-hour programs: 12% increase in daily rate and increase in guaranteed number of days to 14 days.
- Results in show rate increasing from $18,010 to $23,520.

Residual Increases
- Residual bases increase by 3.5%, each year of the contract, except for reruns in network prime time.
- Residuals for reruns in network prime time increase by 3%, each year of the contract.

Healthcare
- Employers continue to make health care contributions at specially negotiated rate of 8.5%, secured in the
2005 Basic Agreement to address the impact of the growing cost of health care on the DGA Plan. Provisions permitting decrease in contribution rate by employers removed.

Other Provisions
- Second Assistant Directors to manage locations in New York and Chicago.
- Establishes a wrap supervision allowance of $50/day for the Second Assistant Director who supervises wrap on local and distant locations.
- Increases incidental fees and dinner allowances for Unit Production Managers and Assistant Directors.

New Media
Jurisdiction over:
- All new media content that is derivative of product already covered under current contracts.
- Original content:
- All original content above $15,000/minute or $300,000/program or $500,000/series, whichever is lowest.
- Original content below the threshold will be covered when a DGA member is employed in the production.

Electronic Sell-Through (Paid Downloads)
- More than doubles the rate currently paid by the employers on television programming to .70% above
100,000 units downloaded.
- Below 100,000 breakpoint: rate will be paid at the current rates of .30% until worldwide gross receipts reach $1 million and .36% thereafter.
- Increases rate paid on feature films by 80% to .65% above 50,000 units downloaded
- Below 50,000 breakpoint: rate will be paid at the current rates of .30% until worldwide gross receipts reach $1 million and .36% thereafter.

Distributor's Gross
- Payments for EST will be based on distributor's gross instead of producer's gross, a key point in our
negotiations. Distributor's gross is the amount received by the entity responsible for distributing the film or television program on the Internet. We would not have entered the agreement on any other basis.
- Companies will be contractually obligated to give us access to their deals and data, enabling us to monitor this provision and prepare for our next negotiation. This access is new and unprecedented.
- If the exhibitor or retailer is part of the producer's corporate family, we have improved provisions for challenging any suspect transactions.

Ad-Supported Streaming:
- 17-day window (24-day window for series in their first season).
- Pays 3% of the residual base, approximately $600 (for network primetime 1-hour dramas), for each 26-week
period following 17-day window, within first year after initial broadcast.
- Pays 2% of distributor's gross for streaming that occurs more than one year after initial broadcast.

Clips
- Provides the companies with limited windows where they can distribute clips of feature films and television programs in new media to promote a program. Provides for payment for all other uses in New Media.

Sunset Provision
- Allows both sides to revisit new media when the agreement expires.

Orci Comments on Strike, Transformers 2

Roberto Orci, one of the writers for Transformers 2, commented on Don Murphy's Message Boards about the strike and possible it may have on sequel.

An Apology (Strike Talk)

How are you?

As you know, all screenwriters are engaged in a labor dispute with the major studios and media conglomerates that subsidize much, but not all of the media content that we consume. It may go on for a very long time. All the other writers I've talked to on every level are ready to hold out FOREVER, all the while figuring out ways to make a living out of the internet without studios.

So now the hard part for me and Alex and Ehren and all fans of Transformers is that the movie may suffer (unless of course you hate the first one so much that you feel our inattention is a bonus). It may be pushed back or a host of other thing may happen to it. For that we apologize truly.

will keep you posted...

Later, in reference to a comment about scribbling down the occasional idea Orci said:

Even if we were doing that, we are contractually prohibited by the guild from handing those ideas in before the designated contract period of the initial deal. So if we signed the deal the day the strike started, we can't just hand everything in the day the strike ends. We HAVE TO WAIT the 14 weeks specified in the contract.

I have already analyzed the potential impacts the current and future strikes might have on Transformers here and here. Currently though its too soon to say if the strike will impact the release date or not. If an agreement between the studios and the guild isn't reached soon (say February to March) more then a few dominoes both related and unrelated to the movie may start to fall.

WGA On Strike

As of 12:01 AM the Writer's Guild of America is on strike until an agreement is reached to get a larger piece of the Internet and DVD sales profits. What this means for Transformers is up in the air. I think the strike will have to go 4 or so months before it might have a serious effect on the intended June 09 TF2 release date. That is mostly going to depend on progress of pre-production vs post-production.

Just as a very rough estimate for TF 1, pre went more or less a year, production went about 4 months and then post was 6 months. So really as long as have a shooting script is ready by next June, the sequel should be fine. It will not give Bay much breathing room, but its doable. All this assumes no actor or directors strike occurs next June.

As far as impact over other forms of entertainment, it varies. Theatrical releases will not be impacted until after Summer '08 since most of the movies for that period are script ready. A side effect though is the script doctors will not be on set so that could lead to more shoddy storytelling then normal, only time will tell.

For TV, the impact will be immediate. The Daily Show, Colbert Report, and multiple nighttime talk shows will go into re-runs for the duration. Current season shows probably have scripts that might take them through the year (in general TV shows are five eps ahead). South Park tends to be done the week its due so its 50/50 on whether there will be a new episode this week and probably none next week. Oddly some shows may even end their seasons early as its rumored that Heroes may call it as season with the end of the "Generations" arc and Heroes: Origins has already been cancelled.

December and January tend to be repeat heavy anyway so that buys the studios a little more time. For mid-season replacements (24, Lost, etc) more episodes are in the can so a delaying their start to February (rather then January) could get them through April. As for any gaps that do form, its probable that the networks will fill it in with reality programming. For example, CBS is apparently considering a spring edition of Big Brother. All in all, after the first week of December, the viewing choices should start getting interesting.

Its not mentioned in news reports, but all this could repeat again in June 08 as the actors and directors agreements expire. I think the WGA made a huge mistake striking now as the studios can hold out fairly easily for six months. The real pinch comes in June when the actors and directors strike which grinds everything to an immediate halt. Whatever concessions the writers get, those groups will demand the same and more. As a result, for the studios, giving into one guild is conceding the same to all 3 guilds. With that future threat looming, its really in the best interest of the studios to make an example of the Writers Guild by holding out as long as possible and giving up as little as possible. If the studio can last longer then the writers, this will help create a stronger bargaining position when dealing with the Screen Actors Guild and Directors Guild.

So to sum, Writers on strike, impact on Transformers (for now) minimal and your TV viewing starting in December may become repeat heavy. If your not a TV watcher, then all this is pretty irrelevant.

For me, outside looking in, I am rooting for the studios. They are the ones that take on the risk by spending millions on new movies and TV shows so it only makes sense they reap the rewards. The writers, directors, and actors don't take the financial risk, so I don't see why they should get any extra rewards in perpetuity for doing the jobs they are paid very well to do.

Transformers 2 Misses Strike Deadline

According to a Variety, Transformers 2 did not make the writer's strike deadline. This deadline refers to a writer's strike that may or may not start tomorrow. If a final script had been submitted, production on Transformers 2 could have been scheduled and started regardless of if the strike started or how long it lasted. Without a finalized script, only so much pre-production work can be completed.

For something as CGI heavy as Transformers the extra time probably will be a relief pre-production wise as gives them time to work on models and the like but if the strike goes to long (or the actors and directors strike next June) AND the studio sticks to its June 2009 release date then the time has to be eaten from somewhere and that means post-production could experience a time crunch to complete the film. Realistically, the only way for the film to meet its release deadline is either no strikes occur or if they do, they last only a month or so. Anything longer and I don't see how it couldn't effect the proposed release date. A more detailed analysis from me is here.

Hollywood Strikes and Transformers 2

After reading the recent issue of Entertainment Weekly, there has been a slight clarity on strike fever that may strike Hollywood. It turns out that there could be three strikes over the next 8 months. The Writers Guild of America (WGA), Screen Actors Guild (SAG), and the Directors Guild of America (DGA), arguably the most powerful unions in the world, all have contacts with the studios that expire soon. All have demands for a larger share of the profits in whatever media the various studios may exploit their properties. Whether people are part of these guilds or not, if they plan on being a writer, director, or actor, they will respect a strike or get blacklisted. As a result of this, the June 26, 2009 Transformers 2 release date may be forcibly pushed back depending on various factors and how much pre-prep occurs.

Screen Actors Guild
Their contract expires at the end of October. Already notices have gone out to members asking for permission to start a strike on October 1st if a new agreement isn't reached. Based on reports, it doesn't look like one will be. The result is that the studios, for TV and movies, will have only their stockpile of scripts to work from. Once the various productions on the stockpile completes, that means no new movies or episodes.

For TV, the impact would be pretty immediate as the script turnover rate is about every 7-10 days for a standard season show. They will probably burn through the stockpile pretty quick which can result in momentum crushing repeats for many shows.

In movies terms its gets a little more blurry as scipt turnover rate is pretty slow, often months being allocated to tweak them. Also the studios have already begun prepping by greenlighting and rushing production on a lot of films resulting in allowing them to probably have a slate through the beginning of fall 2008.

In regards to Transformers 2, the effect might be minimal depending if a pre-production prep ready draft script is turned in before the strike. Since pre-production will probably take 3-4 months, all the prep work can mostly be completed before concerns over the deadline of a final shooting script arise. However, if no draft is turned in, then not much for pre-production crew to work from. Hard to design characters, check out locations, designs sets, costumes, and cast if no script to work from. Assuming no pre-production worthy script, then the longer the writer's strike, the less likely the 2009 release date can be met.

Screen Actors Guild and Directors Guild of America
The union contract for both these unions end around the end of May which could result in a June 2008 strike. Whether one or both of these groups strike the result is the same - the immediate shutdown of all projects, both TV and movie, currently in production.

For TV, the this could result in the delay of the 2008 season premieres which of course effects revenue. For movies, this would of course impact any movies in production or about to start which would delay the planned release of an unknown number of films. Projects that completed filming but not post-production would only be effected if the directors union strikes. The more immediate impact will be promotion as the actors will not do their usual tour to promote the film coming to theatres.

In regards to Transformers 2, the effect again could vary depending on how much pre-prep is done. If pre-production and actual production completes before an actors strike, the actors striking but not the directors no delay as Bay will have the material in the can to work on the film. If both done but directors strike, an impact would only occur if the strike lasts for more then 6 months (highly unlikely). I will be amazed though if production on the film starts much less completes before the contracts expire. As a result, that means that production and post production has to occur after a strike ends. The longer a strike lasts from either union, the smaller the window to complete the film before the June 09 date. The smaller the window the greater likelihood it will be pushed back. If its pushed back, I have a feeling the studio will reschedule the film to bow in May 2010.

In the end, if you want that film to come out in 2009 rather then 2010, just hope a strike doesn't occur.