Deals, Lies & Backchannelling: Why This Is A Bigger Mess Now Than Ever Before

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For days, only sources within the Hollywood moguls camp, but not the Writers Guild of America, have discussed what really went on during 11th hour negotiations with the Alliance of Motion Picture & Television Producers at the Sofitel Hotel Sunday. And the movie studios and TV networks were especially savvy in getting their story out first and foremost about how the writers were to blame for the bargaining talks breakdown. And they’re still telling that story. (Just read the producers-slanted coverage by Variety and The Hollywood Reporter and even the major newspapers which all depend on studio and network advertising, while I stay smack in the middle.) But now the WGA leadership is breaking their silence.

Top guild sources tell me they were “deliberately duped” by the moguls in a backchannel deal to bring the guild back to the bargaining table Sunday. They say the lure was a promise by two Big Media CEOs — Peter Chernin and Les Moonves — that, if the writers gave up their DVD residual demands, then the producers would respond by improving the formula on the central sticking issue of Internet downloads for movies and television. My producer sources confirmed to me such a deal was indeed made. In other words, it could have been possible that a settlement might be only days or a week away, with enough progress to induce the writers side to suspend the Monday start of the strike.

The writers say they kept up their end by dropping their DVD demands – a huge concession which later puzzled the WGA membership because it seemed to come out of nowhere and had to be explained by WGA president Patric Verrone without revealing the whole backstory. Why didn’t he? Because the WGA says it was abiding by the “mutual pledge of confidentiality” with AMPTP that, for the first time in all the negotiations, applied to Sunday’s session. Today, sources there decided to spill to me because the writers’ side of the 11th hour talks story has gone untold. The WGA accuses the producers of not delivering on the all-important electronic sell-through issue all day Sunday. And the producers confirm to me that, no, their negotiators did not offer anything on “EST”. So, according to guild sources, that’s the real reason the 12:01 AM strike wasn’t averted, and their dropped DVDs demands put back on the table.

As a spitting mad WGA leader put it to me today: “All I can say is, if someone calls me and says, “You do X, and I do Y” and that someone doesn’t do it, then I’ve been lied to and I’ve been played. It’s a complete betrayal. I just don’t know what the studios’ game is.”

So why is this news important? Because now both sides in this writers vs producers fight are further apart than they have ever been, and that’s saying a lot. Both sides believe they have fresh and ample reasons not to go back into negotiations anytime soon. And by soon a worst case scenario of months and months and months. Both sides believe that, after Sunday’s betrayals, they can’t trust the other side enough to even talk about scheduling new AMPTP/WGA negotiations much less try backchannelling. Ironically, as I was being told the WGA’s complaints today, moguls were being briefed on what went down Sunday inside the negotiating room. But are they being told the whole story? About the backchannel deal? Not that I can tell. About the promise that’d been made? Not that I can tell. About not keeping it? Not that I can tell. Instead, I received a warning from inside that camp today not to report the WGA accusations, or name the two moguls, or repeat what went on inside the talks Sunday. But, to stay smack in the middle, I can’t do that — just as I can’t favor the other side when reporting about this strike and its issues.

Let me start at the beginning of last weekend: Yes, a Barry Meyer-John Wells-John Bowman backchannelling avenue was being explored. And any and all other backchannelling avenues were being cultivated as well. As I’ve reported previously, among the moguls Chernin, the No. 2 at News Corp/Fox, is the biggest hawk, and Moonves, the CBS CEO, one of the biggest moderates. The two got in touch with WGA negotiating leaders and made this pledge: that, if the writers got back to the bargaining table over the weekend and once there gave up their DVD residual demands, then the producers would respond by improving the formula on the central sticking issue of Internet downloads for movies and television. It was quite a surprise to the writers side because it was such a big departure since, as recently as last week, AMPTP had been telling the WGA that it wouldn’t move off the DVD formula on digital downloads.

As the Sunday negotiation was being scheduled for the Sofitel, the producers announced to the media Friday night that both sides had been “ordered” back to the table by the federal mediator. “The companies used the federal mediator to give them cover so they didn’t look like they’d caved and made the first call,” a WGA leader told me.

“We arrived at the meeting at 10 AM and it started a few minutes later with some discussions about procedure. We made it very clear we were ready to negotiate without stopping, as long as 2 to 3 days if necessary. But we said that, without a deal by midnight, or unless we were really really close, we were not going to suspend the strike. We said that, as things stood, the strike was going ahead at 9:01 PM in the East. And they said they understood. And we got going. And, as a gesture of good faith, we took the DVDs issue off the table. And they said they would get together and talk and get back to us with a response. In the meantime, we all said we’d work on one of the other proposals.”

That other proposal was the funding of the Showrunner Training Program, which is exactly what it says. The WGA side claims it waited, and waited, for the producers to keep the “DVDs-for-ESTs” promise and get back with a response. They claim the AMPTP negotiators kept “stalling and returning again and again to the bullshit side issue of Showrunner Training Programs for hours.” [The producers told me it “only took 15 minutes and was handled.”]

Both sides agree that two more producers proposals were discussed: a new economic model for streaming TV shows online, and a new jurisdictional model for made-for- New Media content. But the WGA described them as “fuzzy unfocused proposals”. (A WGA leader told me, “they’d say, ‘we have to figure out the numbers later’. But it’s all in the numbers.” The producers I talked to agreed their proposals needed more “fleshing out”.

Around early evening the two sides left the talks and went out to dinner instead of ordering in.

Finally, a little before 9 PM Pacific time just before the strike was to start at 12:01 AM Eastern time, “the producers came back to us with an answer to our DVD. It was all very calculated,” a WGA leader told me. “They said, ‘We are not going to make any concessions on the Internet. We stand by our former position that you will get the DVD formula on digital downloads. And we would like to ask if you guys would suspend the strike starting at midnight in the East. Are the pickets starting?’ [The producers confirmed to me they didn’t move off their electronic sell-through position to answer the WGA’s taking DVDs off the tables Sunday. “There wasn’t enough time!” one of their insiders claimed to me.]

“We told them what we’d said right at the beginning of the day’s discussion — that we had to see progress for the strike not to start. They said, ‘Well, that’s it, we’re walking out. Goodbye and good luck.’ Our guys shouldn’t have been shocked but they were shocked. They weren’t ready for the game that was being played. We had made every effort, thinking that if the other side sees you’re serious… and we were shaken that the promise to us had been broken.

“But they’d obviously planned. They knew we were completely unprepared and in the haze of believing our mutual pledge of confidentiality. Their story was that they saw on the Internet that the strike had started – but they just happened to have a news release ready. By the time we realized what was going on, we’d missed the news cycle. They clearly orchestrated this, and we got caught with our pants down.”

[I can confirm that the WGA’s statement came out hours after AMPTP’s immediate one and noted “the AMPTP proposed that today’s meeting be ‘off the record,’ meaning no press statements, but they have reneged on that.”]

Again, the producers’ side has been told by me and other media. But, again, this is the first time the WGA’s side of the story is being told. Each believes that their version of events is truthful. Which is why this is akin to a crowd observing a crime and later few can agree on the facts of what really happened.

I’m dismayed and discouraged by all of it.

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