Hollywood Studio Creative Accounting: a Solution

Still no progress in the strike talks, with both sides slinging mud and acting like unwanted children. And these are supposed professionals we're talking about.

While I have no proposed to solution to this deadlock, I do believe I have a solution to one of the problems that has haunted Hollywood's talent for decades: the studios' propensity for "creative accounting."

What do I mean by "creative accounting," you might ask? Well, I'll tell you.

In Hollywood, several actors, directors, writers, and the like often sign deals for a percentage of a film's gross, or a percentage of a film's net. As a percentage of a film's gross is a rather unfair deal to the studios, some of the talent in Hollywood agreed to work for a percentage of the film's net, thereby allowing the hand that feeds them to make a nice profit, before handing the talent any extra income. However, the studios began to employ "creative accounting," in that they would fudge figures, budgets, revenues, and all sorts of numbers to show that a particular film, despite its box office take, never netted a penny.

As you can well see, taking a percentage of the net, a set up designed to be fair to both the studios and the talent, began a system entirely unfair to the talent. So, the talent went back to "percentage of gross" deals, and the studios went back to fuming.

This problem, unlike the current strike, is easily solved. Simply set a specific box office revenue target, then grant the talent a percentage of the gross beyond that target dollar amount.

Example: Film A costs $60 million to make. Writer B (or Actor B, or Director B) agrees to the "gross beyond specific box office revenue target," which is set at the film's budget amount of $60 million.

The film is released and goes on to gross $260 million at the box office. Since the set level was agreed at $60 million (the budget), the studio recoups its production costs, and Writer B makes 5% of the $200 million earned above that level.

As box office figures are compiled independent of the studios themselves, there are no figures to fudge.

And hence, no more "creative accounting."

Vote Eastwood, who is likely to support my idea.

The WGA Strike: an Exercise in Greed, Power, and Stupidity

I'm sure everyone is aware of the Hollywood strike perpetuated by the Writer's Guild of America. It's all over the news, you're starting to notice your favorite TV shows disappear gradually, and everyone's about to get sick of reality programming.

This strike, in and of itself, is ridiculous, and will do Hollywood as an institution a Hell of lot more harm than it will "empower the writers to continue to produce commercial concent." And here's why:

Although there are several issues on the table at the negotiations between the AMPTP and the WGA, the one experiencing the hottest contention is the debate over how much money writers should be paid for web and new media content (such as webisodes of popular television shows, web-only shows, and direct downloads of shows and films). On the AMPTP side, they're claiming that the financial model for such a system isn't quite yet hammered out, and they're not sure how exactly they should distribute fees and residuals to the writers. The WGA is claiming that's a load of bullshit, and wants its money.

Now, according to several reports, the AMPTP has offered the WGA the same setup used to determine DVD and home video residuals. There's a bit more to it, but that's it in essence. To this, the writers resoundingly said "no."

Let me back up a bit... I wholeheartedly agree with the writers in that they should be paid for their work. However, I vehemently disagree that they should be paid for their work "in perpetuity." This is partially because I believe product should, ultimately, enter the public domain after a set number of years (and not a lengthy set, either), but that's almost another matter entirely, and I do not currently have the time to go over it.

Long story short: the WGA is wrong for instigating the strike when they did. Next year, the SAG and the DGA unions are going to approach the AMPTP to restructure their contracts, as well. Why couldn't the WGA have waited until then? Simply sign a one-year extension and have all three of the "power guilds" negotiate at the same time? By then, the AMPTP's argument about "not knowing how to pay for webisodes and downloads" would have been moot, having been given a year to figure it out.

But, no, Hollywood writers are, by nature, a greedy lot, and having already been slighted over "proper due credit" in film and television (an issue I agree with the WGA on), they aren't about to give up their so-called "pennies on the dollar."

If you find yourself siding with the writers on this, I ask you to go to the WGA website and look up their schedule of fees. These writers are extremely well-compensated for their work, most making more for a single script or a teleplay than many Americans make in an entire year. And, yet, they're claiming they don't make enough money.

There is more to this story, and, yes, I do feel that the WGA should ultimately win out on this issue, but they (along with SAG and the DGA) need to realize that they can only bite the hand that feeds them so many times. When an institution gets too top-heavy, it simply collapses, and then everyone is shit out of luck.

All that being said, my overall problem with the WGA is that they (again, along with SAG and the DGA) have not just the ability to force their own work-stoppages, they have the ability to shut down the entire American movie-making business. When these unions strike, it's not just them that feels the heat, but the hundreds and thousands of "below-the-line" workers who find themselves suddenly out of jobs. And most of the people who comprise IATSE (the largest Hollywood union, and the one which holds most of the technical and worker-bee personnel) don't make 25% of what the people in the WGA, SAG, and the DGA make.

Seriously... the next time you strike, make damn certain the "facts" you bring to the table are ironclad. And quit forcing me to find other jobs.

So, to the writers, despite the fact that I wish to eventually join the WGA, go fuck yourselves.