We’re writers, so we feel common bond with those who earn their living stringing words together. We’re also free-marketers, so we defend creators’ right to get a fair price for what they create.
That’s why we empathize with the Writers Guild of America, whose members create programs for television, radio and movies that increasingly are re-sold or leased for less money than writers would like, reducing their residual earnings.
But we also defend ownership rights. So, we find it offensive that the Writers Guild would try to use the government’s heavy hand to get what couldn’t be secured through fair contract negotiations and a 100-day strike.
California State Sen. Sheila Kuehl, long ago an actress on the 1960s television series “The Many Loves of Dobie Gillis,” introduced a bill to force studios and other entities who own rights to motion pictures, television and radio programs to pay writers and other creative talent residuals based on a “fair market value” when the programs are sold or leased for further distribution.
Unfortunately, determining “fair market value” is problematic with the entertainment industry’s increasing vertical consolidation.
Once upon a time a studio may have sold movie rights to an unrelated distributor and the fair market value was determined by their mutually agreed to price without outside coercion. Consolidation is creating second-tier companies, such as DVD distributors, increasingly owned by studios.
The Writers’ Guild complains distribution agreements now result in sale and lease prices below what the market would set. We imagine a parent company may lease or sell at a reduced price to a subsidiary to reduce the subsidiary’s cost, increasing its profit.
But for an outside party to impose an arbitrary price is unreasonable and unfair. When the outside party uses the government’s power, it coerces far worse than any alleged self-dealing between two businesses, which practically speaking are the same company.
There may be no short-term, tidy solution to equitably balancing the rights of media conglomerates, who own the created material, with the rights of writers, actors and others, who are paid to create the material.
But government intrusion will only worsen what’s already complicated by a still-free market undergoing dramatic structural changes.
The Motion Picture Association of America opposes Kuehl’s bill and accuses writers of making an end-run around contract terms they agreed to, which ended their strike. We find that persuasive.
“… (T)he Writers Guild leadership apparently turned immediately to Sacramento in an effort to renege on their side of (the) bargain,” says the MPAA. “… (I)t is in extraordinarily bad faith to sign a collective bargaining agreement, rise from the negotiating table and run to the Legislature.”
The Writers Guild contends the imposed “fair market” value is necessary to ensure residual payments, and doesn’t infringe on owners’ rights.
Many industries are undergoing wrenching changes brought on by technological advances, corporate consolidations and transforming markets. We know this from first-hand experience, as does the Writers’ Guild.
But the solution isn’t government’s clumsy, arbitrary, inherently market-perverting intrusion. The solution ultimately lies in the market, in freely negotiated agreements, such as the contract the Writers’ Guild agreed to and now should live up to.