The Fair Market Value Bill

Reposted (with permission) from Ken Levine's blog:

"Thanks to the Writers Guild for organizing a recent MASH writers reunion. It was great to see everyone, I’m honored to be in their company, and I still have notes on all of their drafts.

The purpose of the reunion was that the WGA is trying to get a “Fair Market Value” bill passed through the California legislature (Bill #1765 if you're scoring). Here’s why:

A studio like 20th Century Fox produces a big hit like MASH. Some of the members of the creative staff (in this case Alan Alda and Larry Gelbart) have an ownership piece of the series. 20th offers the show for syndication. There’s a bidding war. They take the best offer – a huge windfall. Alan and Larry share in the largesse. And since residual rates depend on the deal – actors, writers, and directors receive nice royalties. Everyone wins.

But now these studios are all swallowed up by mega conglomerates. And agendas change.

20th becomes the property of News Corp. News Corp. wants to start a cable network (FX). They need programming. MASH would be perfect. So instead of renewing a rich syndication deal, they sell it essentially to themselves for nothing. Now the profit participants get nothing. News Corp. receives all advertising revenue from MASH and uses the show to lure viewers and build their cable network. Ultimately, the cable network will be more profitable to the conglomerate than the syndication sale. Residuals are smaller and the creators get screwed.

That’s what News Corp. did with MASH and X-FILES, and Universal did with WILL & GRACE. In all three cases the profit participants sued and each received a giant settlement. The congloms have done this with other series and have gotten away with it because the cost of litigation is so high.

So the Guild is trying to prevent this practice in the future. And this bill would go a long way towards that end. Over the next couple of months we MASH writers will be going to Sacramento to plead our case to state legislatures. We might even get to see the Governor if we promise to say we didn't hate AROUND THE WORLD IN 80 DAYS.

What does it say when we have to get an actual law passed because “everyone wins” just isn’t good enough for them?

Note: A number of readers have asked how they can help. Bless you. We need people to send letters to state senator Sheila Kuehl in support. I've provided a sample letter in the comments section. Thanks."

Here is a copy of that letter plus the good Senator's email address:

senator.kuehl@sen.ca.gov

State Senator Sheila Kuehl
Attn: Tam Ma
State Capitol, Room 5108
Sacramento, CA 95814

Dear Senator Kuehl,

I am writing in total support of Senate Bill 1765 – the Fair Market Value bill.

It is not secret that the media companies in the United States have concentrated their control over the airwaves by consolidating and vertically integrating. Whereas two decades ago there were several companies producing content for television and the big screen, today there are only a mere handful.

With this consolidation has come certain affects that the State of California must mitigate. Among them is the ‘self dealing’ which now happens in our industry. Because the large media companies now have density in both broadcast and cable markets, they are able to license television shows to a subsidiary company that is owned by the same parent company. For example, 20th Century Fox may air a show for its first run on the Fox broadcast network. They then may sell the license to the show to the FX cable network. Sometimes, when such self-dealing occurs, the companies do not pay the fair market value price for the content.

Over the last several years several profit participants have sued the studios or the production companies for ‘self dealing’ and for failing to pay the fair market value for the content. Creators and other profit participants from such hit shows as M*A*S*H, Will & Grace, NYPD Blue, The X-Files, among others, have filed suits to recoup money they should have been paid had the studio encouraged a competitive bidding process and secured the best possible deal for the show. These cases take several years and tremendous resources to wage.

For the actors and directors and writers on television shows, we have a stake in the sale price of a show, because the formula used to calculate our residuals for reruns is directly related to the license transfer fee. Residuals are critical to creative talent and help insure that writers, actors, directors and others are compensated for the work they do, and are able to sustain themselves and their families from the rigors of the often unpredictable job market of the entertainment industry. When television shows are sold for less than the fair market value, all of the creative talent are adversely affected.

Furthermore, when the studios practice ‘self dealing,’ the below-the-line crews such as truck drivers, grips, and others are adversely effected. In some cases, members of the below-the-line unions rely on the value of the transfer price to determine contributions to their health and pension funds. With health care costs constantly rising, the health funds desperately need to insure that the fund is compensated fairly.

For all of these reasons, I humbly ask for the California Legislature to support Senate Bill 1765. This bill is necessary to protect the creative talent and the below-the-line crews that work in the entertainment industry.

Sincerely,
(Your Name Here)

DO. IT. NOW.