Viewpoint: Jeffrey Korchik

SAG and AMPTP need to stop messing with the system

Jeffrey Korchek, vp legal and business affairs at Mattel, worked for many years at Universal Pictures as executive vp business and legal affairs. He is an adjunct professor in the Peter Stark program at the USC School of Cinematic Arts.

You would think that SAG members and the studios and networks grouped in the Alliance of Motion Picture & Television Producers would have learned something from the writers strike and the lack of a directors strike. Or maybe they just learned the wrong thing, with AMPTP members finding cost savings in the strike and the actors seeing capitulation in the directors' settlement.

In either case, don't you wish both sides would just stop messing with the system before it's too late?

The equation of entertainment is really pretty simple, and it produces unique assets: motion pictures and TV shows that can be sold again and again, in movie theaters, home video, cable, airplanes, ships at sea and so on. Every so often a new delivery technology comes along -- the iPod, Internet video -- and the content owner gets to sell that same asset all over again. No other industry gets to do that, not cars, not detergents, not clothes.

Amazingly, it all starts with an idea in somebody's head. Intellectual property. It takes many people to develop, produce and distribute movies and TV shows, and the good and bad part about the business is that it's collaborative in the extreme. Actors, writers, directors, producers and studio executives -- everybody contributes. And, notwithstanding what we read, no one person is singularly responsible for success or failure.

To make the equation work, all those involved in the process just need to keep making movies and TV shows. Some will be successful, some not, but over time you build a library that generates a continuous revenue stream. And if everything works and the timing is right, little $10 million movies like "American Pie" become billion-dollar assets after sequels, direct-to-video productions and everything else.

Although it might seem that the way in which movies and shows are developed, produced and distributed is complex (we know the personalities involved are), the basic idea is not complicated. I promise you that no one is sitting around at the Jet Propulsion Laboratory saying, "Come on, it's not the movie business."

That's why it was dumb for the WGA to strike and dumb for the AMPTP to let it happen. Because really, it wasn't so much about working conditions or creative rights, it was about money. And if it's just about money, somewhere in all the posturing there's the basis for a deal.

Moreover, what greater good was achieved for the majority of members, because isn't that the point of a labor union? Instead, everybody lost to the collective total of hundreds of millions of dollars -- and for those WGA members who work, no increase in the residual formula will ever bring that back. Everybody knows that the studios and networks have the edge with their libraries, and even though we might wish it dead, reality TV keeps growing, which only further reduces jobs for writers and actors.

SAG should pay attention to the balance of power: As Indiana Jones says, "You don't bring a knife to a gunfight."

Sometimes there's a fundamental disconnect in the movie and TV biz: It's a long-term business limited by short-term thinking. What's needed now is responsible management of the economic system so that everyone can keep working. There's enough decent content being produced for a lot of people to make a really nice living and, in moderate to major success, to make a really, really nice living. But to cause or allow a work stoppage that prevents the content from being produced wreaks havoc on an already shaky economy.

Everybody says Hollywood is like high school, but it's actually like a bad day in high school. Call it Unpleasantville. And if the first law of Hollywood is "nobody knows anything," the second is "nobody really likes anyone." Perhaps the answer is that every high school needs a principal, and rules, and that's what's missing.

As a first step, so it doesn't start looking like the decline of Rome, the industry needs a sustained period of labor peace. A Pax Studiana. A three-year labor agreement is not long enough. The whole labor negotiation process has become contentious and distracting and costly. The inefficiencies of preparing for a strike are too great a strain on the business as a whole, resulting in bid-up prices for talent, rushed productions, sustained periods without production, layoffs and a devastating effect on the local economy.

In the old days, there was enough money swashing around so that the networks, studios and unions could have a fight, make up and get back to work without doing much damage. Today, nobody has that luxury.