Billion-Dollar Kiss

by Jeffrey Stepakoff

  Like so much of Southern Cal, Valencia was exploding around 2001 and beautiful new homes were being built. We found one on a near traffic-free cul-de-sac. It was a Taylor Woodrow, Woodlands community, Presidio subdivision, Phase Seven, Plan Four, on Lot Twenty-five. The Plan Fours were the most desirable of the five models, I felt, because of the kitchen that opened to the massive family room. Ours had Richard-Marshall maple flooring in four-inch planks, which stretched generously all the way into the foyer. The hardware throughout was oil-rubbed Baldwin, the appliances all stainless Viking, except of course for the requisite forty-eight-inch Sub-Zero. The cavernous master bath was covered in hand-cut mosaic tile, and the master closet was about the same size as my first apartment in West Hollywood. Along with the kitchen, morning room, and family room, the house had a library overlooking the dining room, a living room, six bedrooms, and five and a half baths. The Old Santa Barbara–style structure was built around an outdoor courtyard to which many of the numerous French doors opened. It was, quite simply, the most beautiful house I had ever seen in my life, even more beautiful than the house of the writer who took that huge development deal back in 1990. It was my dream home, and just like my life, it was perfect. Or so I thought.

  You see, despite the new house, the new baby, and the new promotion, things were much more tenuous than it all appeared—or more to the point, more than I really understood at the time.

  For starters, the reason we signed the papers for the house on May 5, 2001, is because the day before, on May 4, the WGA signed another collective bargaining agreement. These agreements are signed every three years or so and guarantee labor peace. And since 1988, there had been labor peace—up until about 1999. That was when, in September, John Wells was elected president of the WGA on a “get tough” platform. In his campaign statement he demanded “respect for the writer as author and as the central force” in entertainment, and basically promised that if the union’s upcoming demands were not met, “we will be on strike.”

  By the spring of 2001, what looked like the biggest strike in Hollywood history—one that would have made 1988 look like a walk in the park—was just barely averted. And although it was averted, the repercussions of the almost-strike of 2001 ripped through the coming TV seasons. In fact, we still feel the effects today. Here’s what happened.

  Back up about two years. On August 16, 1999, a month before Wells was elected, a few months before episode #312 was filmed, during the worst year yet for network television ratings, in the summer, a time when very few people watch TV, and right at the same time Dawson’s Creek was struggling to reinvent itself and Sony and every other studio in town was spending record sums on development and production, a funny thing happened. A new show aired. A game show. It was in prime time on ABC. And not only did people watch it, a lot of people watched it, about ten million of them. In fact, it was the highest-rated program of the week not only in total viewers but also in the 18 to 49 demographic. It was called Who Wants to Be a Millionaire?

  But you see, I was too busy in the craziness of the Dawson’s Creek story room to pay attention, and my friends in Hollywood that did figured the show was obviously just an aberration. But in fact it wasn’t. ABC stripped Millionaire, meaning they stuck it into four different nights on its schedule that summer, and every single night it worked in a big way. The week following its premiere, the show’s audience grew 60 percent. On Sunday night, it built on its lead-in, The Wonderful World of Disney, by 100 percent. Suffice to say, it was quite present in ABC’s 1999 to 2000 fall schedule. Millionaire led ABC to first place among the broadcast networks for the first time since 1994. And the truly amazing thing about it, particularly in the climate of bidding wars and eight-figure development deals, it cost nothing to make, barely half a million bucks an episode. A lot of the reason it was so cheap to make was because there were no union writers involved.

  On Friday, April 14, 2000, I was driving home from the new Dawson’s Creek writers’ offices on Sunset Boulevard, happy that they would be a closer drive for me, happy about my sweeping view of the city, and happy that my option had been picked up for the next entire season. So I paid little attention to the news of the day, which was that the stock market had fallen off a cliff. The Dow Jones Industrial Average dropped 618 points that day, its biggest point decline in history. And the NASDAQ dropped 355 points, losing 10 percent of its value. Those who had ridden the markets up for so long with no regard for the fundamentals panicked. The studios and networks, all now under the umbrella of publicly traded corporations, immediately felt the pain. In the preceding two-week trading period, Disney lost 6 percent of its value, Viacom lost 7 percent, GE lost 7 percent, Seagram (parent of Universal) lost 9 percent, TimeWarner lost 19 percent, and News Corp. lost more than 20 percent.

  At about the same time, oblivious to the carnage on Wall Street, a ragtag group of contestants were hanging out on an island in Borneo, competing against each other for a million dollars. Inspired by the success of the unscripted Millionaire, CBS programmed Survivor a few weeks later on May 31, 2000, and it was an instant smash. Sixteen million people watched, but best of all for graying CBS, the show garnered a 20-share with 18-to 49-year-olds. This was the official beginning of a new era for the Columbia Broadcasting System.

  Survivor not only proved that successful content could be made without writers, it was the first series to demonstrate the true power of making television in a vertically integrated conglomerate. Viacom, CBS’s parent company, filled its radio stations and TV networks with spots for the new series. From MTV and VH1 through several Infinity-owned radio stations, Viacom went after younger viewers that CBS never could have attracted if it had been on its own. Along with the WB’s model, this prompted a new age in entertainment promotion and programming.

  On July 5, 2000, CBS aired another reality show, Big Brother, a show which stuck a group of people in a house in Studio City lined with hidden cameras. It was another instant hit and solidified CBS’s new place as a leader with young audiences. So powerful were these new unscripted shows that this was the first season since 1994 that did not have network audience erosion.

  While studios like Sony all over town were throwing money at anyone who knew how to use scriptwriting software, unscripted TV shows soared to the top of the ratings. Millionaire was earning 38-shares, meaning that two out of every five people watching television were watching a show that did not use TV writers.

  Actually, it’s important to clarify here: It’s not that these shows didn’t use writers, it’s that they didn’t use WGA writers. You see, “reality” was a bit of a misnomer for these programs. While early antecedents of the genre were entirely unscripted, like Allen Funt’s 1948 Candid Camera, which filmed pranks played on ordinary people, many of these new shows were carefully conceived, staged, and edited. They were, in fact, very much scripted. The people who did these tasks—these storytelling tasks—were called editors or associate producers, but they were essentially doing the exact same things that my colleagues and I were doing. They put in long hours in a story room, brainstormed story ideas, arced out long-term character progression, cast “actors” based on specific story needs, and created a cohesive and compelling dramatic narrative by extensive editing in postproduction. Although the “editors” on Survivor did not write the actual dialogue, they conceived and scripted scenes or scenarios. Although The Real World “associate producers” did not give the characters fully fleshed-out scripts, by the time they finished in the editing bay, they might as well have. The reality was that reality TV was about as “real” as professional wrestling.

  And the studios, of course, loved it, because not only was it popular and cheap, but the studios took no lip from labor about how they wanted to make it. According to the WGA, one reality writer worked between twelve and twenty hours a day at least six days a week. Another worked nine A.M. to two A.M. seven days a week with no overtime. Another worked eighty-four-hour weeks for $7.41 an hour. With no minimum salaries and no req
uirement to pay health and pension benefits, conditions on reality TV productions were very much like those from the thirties and forties, or worse. Many productions were basically writer sweatshops.

  Still, as cheap as reality shows were to make, they had some fundamental problems. First, they had no back-end value in syndication. Their DVD and aftermarket value was also limited. And many advertisers were apprehensive of being associated with some of them. In addition, as popular as they were, broadcast audiences didn’t last very long. Unlike traditional scripted shows that often grew in audience share, the novelty of many of these early reality shows quickly faded. By 2001, Millionaire was not only fading, it was also rapidly graying, losing its young audience to other networks like the WB and leaving ABC with very few backup options.

  But despite all this, despite the fact that reality shows did not look like they would ever be as lucrative as those billion-dollar syndicated blockbusters, the networks kept mindlessly cranking out more of them. You see, reality TV, in many ways, was more than just cheap programming. It was a threat to writers.

  Now, throughout 2000, some part of my brain was aware that my union was pissed off and fighting with the studios. In September of 2000, I got a letter from Wells urging me to join him “in refusing to write extra scripts for stockpiling during a possible WGA strike.” Evidently, remembering 1988, many of the studios around town had been trying to get extra scripts written for their series in case of a walkout by writers. But we weren’t doing this on Dawson’s. We were barely able to write what we needed for our current production, so I didn’t give this much thought at the time.

  But on December 12, 2000, Michael Mahern, the WGA’s treasurer, took the staff of Dawson’s Creek to lunch to discuss the guild’s concerns. That was the first time I realized just how serious my union was about going out on strike when our contract expired on May 1, 2001. In short, the WGA was demanding an end to the vanity credits on movies—those “a film by” credits that are given to directors that completely overshadow a writer’s contribution—as well as full fees for scripts from Fox, and a bigger piece of foreign TV sales, Internet downloads, and video-on-demand services. And the real sticking point was the demand for more residuals from the mushrooming DVD market.

  In order to understand why writers, who were making money hand over fist, wanted more, you once again have to appreciate the mind-set of the Hollywood writer. This was not so much about amounts of money, or working conditions, as much as it was about treating the writer equitably, in this case with the overall revenue stream generated by what he or she created. Once again, it was about respect. However, management was resolute in their position that there just wasn’t any more money to give, and writers were equally resolved. Essentially, it was 1988 all over again, only this one would be worse—way worse.

  For one thing, the threat of a shutdown could not have come at a worse time. The day we had that lunch meeting, the NASDAQ had lost more than half its value in nine months. My studio’s stock, Sony, lost over half its value as well.

  According to a report commissioned by L.A. mayor Richard Riordan, a walkout by writers (and actors whose contracts were also up) would take at least $500 million a week from the L.A. economy. If the damage was anything like 1988, a strike would cost L.A. more than $7 billion. And this did not even begin to address what a strike at this time would do to television.

  But no one I worked with really seemed all that concerned. Although we knew the studios did not necessarily have our best interests in mind, we felt they couldn’t get by without us. Despite what a bunch of well-fed guys in suits were threatening in the trades, we saw the look in the executives’ eyes when we pitched, and we heard the glee in our agents’ voices when they fought over us. They built their empires on us. Sure they were making a quick buck with this reality goof, but that was bound to go away soon. You couldn’t syndicate that stuff. They were, after all, television networks, and if they wanted to make TV, real TV, they needed us. So we weren’t about to give in to their demands, no matter how many reality shows they threatened to stockpile.

  Very few writers I worked with really knew much about 1988. The vast majority of the people in TV at this time had joined the industry in the last decade. The studios, on the other hand, had long memories. They recalled 1988 all too well, and they were not wasting any time getting ready for a coming war. Indeed, they had planned for such an eventuality, and it was here. To paraphrase Dick Wolf, the bottled water had been bought, the plywood stockpiled.

  Reality TV departments now sprung up all over town. No longer were there simply drama and comedy divisions. Entire staffs were now devoted to developing and programming reality shows at the networks and studios. “Vice Presidents of Alternative Series Development” took pitches from game-show creators. Mark Burnett (creator of Survivor, The Apprentice, The Contender) and guys like him became very hot commodities. It wasn’t long before William Morris was representing the creators of Who Wants to Be a Millionaire?, Big Brother, and Survivor. Soon all the major agencies opened entire reality TV departments. Eventually, even the small literary boutiques followed suit. Even Broder-Webb-Chervin-Silbermann opened a reality department.

  On March 1, 2001, about $100 million apart, talks between writers and the studios collapsed. Wells proposed meeting halfway, but DreamWorks’ Jeffrey Katzenberg said that that would “bankrupt” the studios. On April 27, the WGA started asking us about our availability for picketing. It really looked like this was gonna happen. In fact, at this point, most people I knew thought a strike was inevitable.

  However, through determination, outside intervention, and mainly, I think, fear, a strike was finally averted in the eleventh hour. On May 4, 2001, three days after the deadline, a new contract was put into place, with both parties making concessions.

  But a tipping point had been reached, and there was no going back. Reality TV was now not only an accepted genre in viewers’ minds, it was deeply entrenched in the network-studio system.

  Because of all the reality shows the networks and studios put into development as a potential backup to the strike, the 2001–2002 fall season was flooded with them. Not that I really noticed, because I was way too busy making TV to watch much of it. There was a small television in the Santa Fe suite at the Inn at St. Thomas on which I watched some new quality HBO fare during my occasional spare time in the 2000–2001 season. But during the 2001–2002 season, I had no spare time, because along with my writing and producing responsibilities, I was writing a pilot for Fox as part of a development deal I had made with 20th Century.

  To give you a snapshot of what this entailed, in October 2001, during production of Dawson’s episode #511, when the cast and crew broke for lunch, instead of eating I took a cell-phone call to discuss the pilot, with ten other people on the line: two executives from the studio; three executives from Fox, the sister network; one executive from the book company in New York that had a deal with the studio’s parent company and was involved in the project; two executives from the L.A. branch of the book company; one executive from the coproduction company that had brought in the initial writer on the project; and the initial writer on the project, whose overall deal the studio and the coproduction company shared. “Synergy” was the word I constantly heard used to describe this new way of making television. I heard other words for it as well. Suffice to say, I was busy.

  And I wasn’t the only one. On the other side of the continent, my wife was walking around, her footsteps echoing off those wood floors in the partially furnished gigantic house, managing teams of contractors while trying to provide loving care to a toddler and a breast-feeding infant. Even when I was physically home from location, I was of little use to anyone but those who were employing me. It wasn’t long before my wife and I employed great quantities of help. Nearly overnight, along with Shelly the Chef, who cooked for us, and our regular cleaning help and lawn and household maintenance, we also hired Isidra, Mayra, and Diana, three nannies who worked various shifts throug
hout the week. Suddenly, we were living in this home—well, my wife was; if I was there I was in the attached “casita,” which was my separate office—where the residents were significantly outnumbered by those keeping the place going. We knew there was something crazy about it all. But in the pace of working, and living, in television, it put a plug in the dam.

  Right about that time, however, the dam that was keeping the television business afloat burst wide open. As my wife and I were both hard at work, the TV business went through what I can only concisely describe as an upheaval.

  Throughout the gold-rush years of the nineties, much of the TV industry had been run on rising advertising revenues. This was coming from all the freewheeling money generated by the rising stock values of companies that were buying ads for themselves. Well, when the stocks of those companies suddenly dropped, their available resources dropped. And, as always, one of the first items that gets cut when corporations tighten their belts is advertising. Suddenly, companies took a good hard look at their promotional budgets and started questioning the rationale of paying more and more for television ads that fewer and fewer people were watching. Media buyers started playing hardball.

  Up-front ad sales for the 2001–2002 season were basically a fire sale. When the smoke cleared and all the spots finally sold off, advertising revenues had dropped for the first time in eight seasons, down 16 percent from the previous year, a loss of more than a billion dollars.

  When the advertising spigot got turned down, all of the expenses of producing scripted television almost instantly became as clear as daylight. From 1998 through 2001, programming costs alone rose over 20 percent. So the networks and the studios, now accountable to shareholders, did what all the other publicly traded corporations were doing in America at this time: They looked for ways to cut costs.