“Seeing the handwriting on the wall, two days ago the WGA dismissed without prejudice its state court case against the four agencies and simultaneously filed a counterclaim to the suit that was brought against three of the agencies for antitrust violations on the part of the guild,” Ken Ziffren said Wednesday as he laid out the battle between the WGA and Hollywood’s Big 4 talent agencies.
Laying down parallel litigation, election and negotiations timelines, the Hollywood mandarin fired up his annual state-of-the-industry remarks at the Beverly Hills Bar Association with comments about where the labor war over packaging could go, and how the coming streaming wars could be a Gallipoli of sorts for Tinseltown unions.
“The guilds are out to lunch trying to live on the 2% and the studios are making hundreds of millions … off their sister channels,” the Ziffren Brittenham LLP co-founder and one-time L.A. Film Czar said of the leg-hold of current residual agreements. “To me, that’s a strike issue,” added Ziffren, looking toward the 2020 AMPTP film and TV contract negotiations and somewhat echoing words made Wednesday by WGA West presidential candidate Phyllis Nagy over writers’ residuals.
“Whether it is a strike issue or not for the WGA, only David Young and David Goodman know,” the lawyer added, referring to the guild’s current top negotiator and the incumbent WGA West president, respectively.
Already having accused the current leadership of “electioneering, pure and simple” in the court moves, Goodman challenger Nagy noted today that the growth of streaming services look to upend the traditional, licensing fee-based residuals model. In remarks during his 11th yearly address to the bar association’s Entertainment Law division, Ziffren predicted that such low residuals, and a lack of a metric to firmly determine who is owed what on expanding platforms, simply won’t generate enough cash for the WGA’s increasingly skint health and pension plans.
“The battle in the guild right now is those who believe that packing deals are evil, illegal and even subject to RICO provisions,” Ziffren said of the 4-month-old clash between the WGA and WME, CAA, UTA and ICM Partners. “That was the case they were about to lose in state court — we’ll see how that does in federal court,” he quipped of the guild’s recent shift in jurisdiction and what he sees as the Davids’ hopes to outrun the upcoming election clock. The effort to have a pivotal dismissal hearing moved from September 5 to beyond the mid-month WGA West election ballot counts was rebuffed in Los Angeles Superior Court, a move Ziffren believes prompted the closing down of the state case by the WGA this week.
“This matter will now roll past the election, so whatever embarrassment the guild might have suffered for a ruling to dismiss with or without prejudice is negated now,” the lawyer claimed of the shift to federal court and that venue’s often snail’s pace.
As loaded for bear Disney+, AppleTV+, HBO Max and more prepare to enter the digital fray against Netflix and Amazon, Ziffren said opportunity may be found in how the scribes vote.
“Step one in figuring this all out will depend on who gets elected by the WGA membership,” the always-circumspect lawyer told the crowd of peers and eager law students. “If the incumbents are elected and voted in, we can expect a continuation of the lawsuit. If the insurgents, so to speak, are victorious in whole or in part, we may see a reopening of discussion between the agencies, the ATA and the guild.”
Promising to cover “a lot of minutiae” and three or four big topics, Ziffren began his hourlong remarks with a low-key deep-dive listing the industry shifts of the past 12 months, such as the solidifying of AT&T taking over Time Warner and the reunification of CBS and Viacom. Warming up for what was to come, the powerhouse attorney quipped that while the latter re-merger is moving ahead, the mutually Redstone-owned parties haven’t “consummated the marriage” yet with official approval (though Ziffren said the deal will “probably go through”).
Sinclair Broadcasting and Bryon Allen’s proposed purchase of the regional sports assets that the Walt Disney Co. was required to sell off as a part of its multibillion-dollar Fox acquisition, the arrival of 5G, Sprint and T-Mobile’s stifled union, Dish Network disruption, participation accounting and the Bones case, and EU regulations were also discussed in overview by Ziffren.
With expected emphasis on the numbers, the small-screen wealth of the vast libraries at the likes of Disney, Warners, NBCUniversal, “maybe CBS/Viacom” was another topic upon which the lawyer touched, spotlighting a planned profit participation scheme the House of Mouse has proposed — or a “bonus” plan, as Ziffren called it to laughs.
“What’s happening the real world today is that every law firm that is transactional film and TV are going over this form, talking to agents, and then we’ll attack – and see what happens,” Ziffren taunted in what could be Hollywood 2019 in a nutshell.