"You have to first realize that before the first ticket is sold, you can have $300 million in costs to recoup," said Dan Fellman, president of domestic distribution at Warner Brothers Pictures. "It's hard to judge the health of an entire business based on one summer." [...]

"A record summer plays right into our hands, especially from a public perception standpoint," said one Writers Guild of America executive, who asked for anonymity because he had not been cleared to speak publicly on behalf of the union.

A spokesman for the guild did not respond to requests for comment, but John F. Bowman, the chairman of the union's negotiating committee, echoed the sentiment in a recent interview. "The studios are reaping windfall profits but pleading poverty to the talent community," he said.

To keep public opinion from favoring the avaricious guilds, who are unreasonably demanding to be paid when their work is selflessly released onto the faddish internets platform, the studios are going to need to step up their "Movies: A Decades-Old Business Where No One Has Ever Made Any Money" PR campaign. Expect Universal, home to apparent successes like Knocked Up and The Bourne Ultimatum (examples referenced in the Times piece) to balance those triumphs by reminding everyone about the massive losses incurred by historic flop Evan Almighty, The Most Expensive Comedy Story Ever Told, by announcing their desperate plans to auction off every piece of their theme park, from their animatronic Jaws to the sweat-stained uniforms ripped from the backs of newly laid-off tour guides, just to keep their cash-hemorrhaging feature business from collapsing.

• As Labor Talks Near, Studios Play Down Numbers [NY Times]
• Previously: Studios Already Shredding Hundred Dollar Bills For Use As "Summer Of Prosperity" Parade Confetti

"We're trying to do in six months what we usually do in 12," said Patrick Whitesell, a partner with the Endeavor agency, which represents Mr. Sandler and others caught up in the chase. [...]

In one go-round, Paul Greengrass, finished with this August's "Bourne Ultimatum," with Matt Damon, a client of Mr. Whitesell's, has been trying to round up that star to shoot "Imperial Life in the Emerald City" for Universal and Working Title Films. But Mr. Damon is also looking at "The Informant," a conspiracy thriller to be directed by Steven Soderbergh for Warner Brothers.

If Mr. Damon commits to both, and everything falls into place with the studios, that would mean a long delay for "The Fighter," a Paramount boxing film that is being lined up as a possible project for him with the director Darren Aronofsky. For that one, however, Mr. Damon would have to contend with weight fluctuations that would be difficult to control on a tight schedule.

If dwelling upon the heartbreaking possibility that the universally beloved actor's metabolism will become a pawn in the chess match between the unions and the studios isn't enough to move you, consider this: Should Damon's ability to earn become impaired by a lengthy work stoppage, he'll likely have to cease the monthly assistance payments he's been generously giving to childhood friend Ben Affleck, who hasn't worked steadily since 2004. Only the blackest of Hollywood souls can remain unaffected by the thought of a lifelong bond broken by the cruel realities of this business.

• Hollywood Scrambles as Strike Looms [NY Times]

"We met at lunch yesterday and drafted a letter to Scott and the department heads in L.A. and New York expressing that we would like our medical benefits back," a source within the agency told Daily Variety. "Also that it's unfair to say we don't need benefits because we're young (Scott had offered that among reasons to stop coverage), and it's unfair to deny us coverage flat out. We appreciated it was a tough decision for him to make, but we'd rather keep our coverage than get the small raise he mentioned."

In part, the missive stated that "non-contracted employees are not the only workers upset by this issue. Presently, several agents have offered to share salaries with their assistants to help compensate for our loss of benefits, several outside employers have solicited our services for rival companies, and most assistants are questioning their rationale for continuing to work at Innovative." [...]

Though they've seen "nothing in writing," the mood within the company "is better," the source stated. "People are happy that we won a small battle, and hopefully things will continue to get better. We know it was a big step for him to do this. And now there won't be a boycott on bagel day."

We imagine that the real wake-up call for Harris—other than confronting the possibility that he would return from his German knee-surgery holiday to find his still-smouldering effigy propped up in his office chair—was discovering that some agents were willing to kick in part of their salaries for their affected assistants; such a mutiny of generosity by the most constitutionally avaricious Hollywood caste must have been soul-chilling. As for the Innovative assistants, they can momentarily bask in the afterglow of having won a hard-fought battle, then get right back to hoarding those free bagels to supplement their unchanged subsistence-level wages.

• Innovative benefits return [Variety]
• Previously: Benefit-Reducing Innovative Artists Faces Possible Uninsured Assistant Mutiny [Defamer]

"We're getting $100 less than anyone in town, we get no over time and we have to pay for parking which is down the street," said one source, who admitted that staff did get free bagels every Wednesday.

"Now we have no health insurance. At the Christmas party, Harris was boasting about profits and growth. No one knew there were money issues. Maybe we're young and naïve, but we like to think that the bottom line isn't just money."

After the jump is the text of an all-staff e-mail sent out this morning by company president Scott Harris (forward to us a little while ago, and also featured in the Var story), in which he clumsily attempts to forestall a mutiny by claiming he's in the process of trying to give assistants raises and appealing to their sense of irony about the ensuing benefits-related clusterfuck:

From: Scott Harris Date: Mon, 18 Jun 2007 10:39:47 -0700 To: All LA & NY Conversation: Medical Plan Policy Change Subject: Medical Plan Policy Change

I know that my change of policy is a big issue for many of you as it is for me as well. I have been quite unhappy for a long time with the annual rate hikes that Innovative has experienced year after year after year. Finally this year as it was time to go through this annual procedure I did what our clients sometimes do.....I switched to a bigger insurance agency that appeared to have more power and connections.

After this change things got off to an annoyingly rocky start. After far too much time had passed, I finally got bids from the various health care providers very late in the game. When my new agent presented the choices available to us I was left with a very short window (of time) to evaluate the menu of possible options all of which included substantial rate increases. Among the various unattractive options presented the best two were:

A) To switch to an inferior insurance company that I know would make everyone on the plan unhappy (because they make the claims process a nightmare even though they had the lowest bid by far).

or

B) Figure out how to deal with another huge rate hike without changing companies AND the growing demand I also felt compelled to address this year which is the need to better compensate our assistant team.

I chose to go with option "B" for numerous reasons. One of the key reasons that motivated me to opt in this direction is my desire to have and be able to attract top assistants by better compensating this group. There is not a way for me to both keep the assistants on our current plan and take care of their need to receive higher wages. The amount of the increases is yet to
be quantified but when I do make the determination, I will pay the increase to the assistants retroactively (as of the date that Innovative no longer provided medical coverage). Although this was always my plan I did not want to connect the two issues because I still need to figure out the new compensation schedule for our assistants.

This was an agonizing decision for me. I arrived at my determination after seeing many spread sheets of numbers and options and ways to go. I did not involve anyone else in this decision so there is no one else to blame. If I had the luxury of more time I'm sure I could have presented this to everyone in a better way but what is done is done. I apologize to any of you that felt blindsided by this but I did need to deliver in writing this change of policy.

The odd moral to this story is that my changing to an agent at a bigger and more powerful company did not produce the result one would hope for....I hope at least some of you can see the ironic humor in this.

Oddly I hardly received any phone calls from any of you (one of you to be exact) and the Emails I received could be counted on one hand. I did however receive phone calls and an Email from Mike Fleming at Daily Variety who was informed about the Innovative business decision. I enclose below his Email to me and my reply because I see no need for any secrets. There is more that I would write you but much of it is contained in my reply to Mike Fleming at DV. Mike's Email to me is on the bottom and my reply is above it.

I'd like to conclude by saying that if any of you would like to interact with me directly about this, either individually or as a group, I would never shy away from being open minded and listening. I make no representations that I will change my mind but my door is open much wider for your feedback than it would be at other agencies. If any of you want to write me or discuss this send me an Email and I will get in touch next week on the phone or by return Email.

Scott

We don't yet know the results of the lunchtime strategy session, but since Harris has played the "ironic humor" card, he'll have no choice but to laugh and shrug his shoulders should he show up tomorrow morning and be met by a mob of striking assistants pelting him with last Wednesday's free bagels, a symbolic rejection of their last remaining company benefit.

UPDATE: Credit Harris for refraining from repeating this screamer in his all-company e-mail, which he offered as justification for the cuts to Var in an earlier story, and which probably would have resulted in a protest a little more violent than a bagel-stoning:

Harris estimated via email that 50 were affected by the move, which he made after evaluating health care costs. "Most Innovative assistants are very young and do not have medical issues (and hence do not get much value from the coverage)," he wrote.

• Innovative deals with angry staffers [Var]