H’wood to labor: The check isn’t in the mail

Oh boy. The Hollywood Reporter‘s labor guy, Jesse Hiestand, grabbed an interview with Nick Counter today, and it’s implications for the creative guilds are terrifying to behold.

Who’s Nick Counter, you ask?

Nick is the chief negotiator for the AMPTP – or the Alliance of Motion Picture Television Producers. You,of course, know them better as “the producers” – the movie studios and TV networks.

In it, he makes some pretty startling remarks about how far the studios want to go when it comes to contract negotiations.


THR: You said the position on download-to-own residuals is not set in stone, but does this suggest that the guilds should be looking to improve the home video formula, as opposed to crafting an entirely new one?

Counter: Changing the formula is a two-way street. We think the formula is out of date and the residual formulas in the contracts do not reflect the fact that in the primary markets we do not break even. We cannot survive on the revenue from the initial marketplace where you’re talking about television programming, theatrical motion picture, made-for-DVD, made-for-cable. We, as an industry, do not recoup our costs in the first market, so we end up paying residuals on losses. These residual formulas also force the companies to pay taxes on losses. If the guilds want to examine the entire residual structure, come to the table. We will have our own proposals to deal with the very facts I just outlined. We should not pay residuals until we have profits.

THR: So you’d like to readjust the formula to share the wealth only after you reach break-even?

Counter: Yes. A break-even formula for all markets, all residuals. If they want to open it up, we’re not just going to talk about iPods. We’re going to talk about the entire residual landscape.

This is tantamount to a declaration of war. No one is better than hiding profits than the studios. For Counter to say that the producers will only consider changing their position on new media – like iPod downloads of “Lost” or “Desperate Housewives” – only if everything else that’s been nailed down in the last fifty years is up for grabs?

The unions are going to go bat guano.