Collusion

In one of my previous posts I wrote about the wages of vfx artists employed at various facilities in the US and found it peculiar that companies like ILM and Pixar, which most of us consider to be the most prestigious, were some of the lowest paying companies in the industry.

It shouldn’t be a surprise then that today the US Department of Justice announced a settlement with Lucasfilm in an investigation that alleged that the companies essentially engaged in collusion:

Lucasfilm and Pixar agreed not to cold call each other’s employees; agreed to notify each other when making an offer to an employee of the other company; and agreed, when offering a position to the other company’s employee, not to counteroffer with compensation above the initial offer.

The agreement between Lucasfilm and Pixar restrained competition for digital animators without any procompetitive justification and distorted the competitive process

The settlement was laughable as the punishment for the crime wasn’t even a slap on the wrist. The companies basically had to agree not to break the law for the next 5 years!

For VFX artists the settlement provides more questions than answers.

What happens after 5 years?

Can they just go back to colluding again?

What about those up north that have been screwed out of opportunity costs for better wages?

What about other companies like Sony, Digital Domain, R+H, DreamWorks, Disney etc?

How do we find out if they have secret agreements like ILM and Pixar?

Do artists even care about the answer to those questions? It seems for many artists it’s not about money, it’s about making cool movies.

For others I’m reminded of their incredible benevolence for the facilities as they plead libertarianism by saying “if you don’t like the company you work for then leave!”

Well how are you supposed to do that when the other company in town is colluding with your current employer?

Then we’re told to pity our fellow facility owners because of their small profit margins and try to help them out or they will go overseas.

Perhaps we could help them avoid paying taxes by misclassifying ourselves as independent contractors or give up overtime like Hydraulx proudly proclaims?

Perhaps we should allow them to agree not to underbid each other when bidding for work?

The irony here is that given the incredibly good deal ILM was getting by colluding with Pixar for lower wages, they STILL shipped jobs away to places like Singapore.

The truth is shady practices are nothing new in business. VFX Supervisor Scott Squires wrote a post about US health insurance company tactics.

If you think collusion is something new to the industry, think again. In Montreal, such agreements were very common in the games business and some VFX artists have claimed to know about similar situations in Vancouver.

I can personally tell you of a situation at a company I worked at that was in need of artists with a specific skillset. I recommended to a manager that they hire from another company and was surprisingly told that they had an agreement not to “cold-call” those employees.

Is that fair? Hell no but I’m always reminded of what TAG rep Steve Hulett has said about fairness. In business there is no fair or unfair, no right or wrong. There is just leverage.

So what do we have to do to get leverage?

VFX Law has a post on his idea about how to change the vfx business model. He essentially advocates for a trade organization that will represent not just facilities, but the artists also. You can see with today’s news why such an idea could backfire. While it would be great to organize facilities together to use leverage against studios, in the ILM/Pixar case, they used their leverage to collude against artists. Even with today’s news, I still advocate for a separate trade organization for facilities and a labor organization for artists.

The Screen Actors Guild was formed in 1933 with very litte fanfare and many actors were reluctant to join. In 1937, SAG membership exploded from 80 to 4000 members. What triggered such widespread support? The revelation that producers were secretly colluding against competitive bidding for actors.

Unions aren’t perfect and it’s hard to crackdown on secret agreements between companies. When reports first came out about the recent collusion between Lucasfilm and Pixar months ago, The Animation Guild went through it’s legal network to connect artists to Max Blecher, one of the top anti-trust attorneys in Southern California.

I suspect that managers who engage in collusion would be a little more reluctant to do so if there is a union that has access to some very good anti-trust lawyers that it can refer artists to. I know many of you are reluctant to join a union but doing nothing is not an option. It’s relatively easy to join compared to VFX Law’s proposal.

Many of us are in this industry for one thing: respect. What we were taught is that if you want respect you have to earn it. After today’s events, I say this time we demand it.

Soldier On.

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13 Responses to Collusion

  1. n says:

    I’ll tell you what: knowing that studios collude to keep our wages down, I sure don’t have any problem sharing my salary with others. Sites like glassdoor.com are an invaluable window into information that studios already share with each other: the range of salaries associated with each job title.

  2. annon says:

    WE all get to know the gals in HR. How can they live with themselves doing this to people.

    A union would not be able to stop that. but there would be a legal team available to hammer them down when they did.

    I really think that we need to remember this as a key point with unionization. AS companies become increasingly pathological in there dealing with people, a bottom up answer is the only way to deal with it. the legal system has been so chiseled away. Labour laws are a joke.

    The answer is a good old fashion UNIon

  3. Jimmy Goodman says:

    employees of ILM and Pixar are cordially invited to contact the IATSE at VFX@IATSE-Intl.com; we are ready, willing and able to protect you from precisely this type of collusion. Together, we can combat this form of exploitation. Jimmy

  4. [...] is an implied contractual acceptance of the pitfalls that come with it. The broken labor laws, the collusion, the misrepresentation as an Independent Contractor, the exorbitant costs of unionizing, all of [...]

  5. 100K++ says:

    the more subtle story is that the separation of ‘high-end’ and ‘good enough’ is a time honored story that the vfx industry is facing like any other.

    the visual sophistication gap between my 30-minutes-with-shit-hot-craked-raytracer and your just-discovered-10-years-to-late-physically-based-pipeline is what has this whole industry on it’s head.

    basically, if you provide a unique skill, you’re rewarded for it – the victors go to the spoils. however, if your job is repeatable by the masses, well, automation is going to win. (you try making one dollars worth of pennies from raw materials for 1 dollar).

    being a modern vfx artist isn’t about gluing a over b or rendering a picture. it’s about solving visual problems. you can’t farm out problem solving, yet.

    we farmed out hand drawn roto to robots years ago that could tween for us. (look ma, no more photo chemicals!) don’t fret the easy stuff. the real value in today’s money making vfx artist is the skill of doing impossible things.

    the artists themselves should should start colluding and not selling themselves short. know this, whatever you’re billing them, they are billing the client double.

    having said that, i know a many places in town that have always paid top dollar to the real core skill of our industry – solving hard visual problems.

    i hope that comes off as inspiration more than damnation of the robots. after all this is theater – we should expect to play along as such.

    • vfxsoldier says:

      I agree, what this reveals is the argument that vfx is a commodity that can be done anywhere by anyone is just not true. Pixar and ILM know that. Why else would they enter in such an agreement if they know someone in India can do the job for pennies on the dollar? Talent matters. Quality matters.

      Here’s the problem, Pixar and ILM SHOULD be the places where the most talented work and many talented people work there already.

      What this reveals is that the 2 companies had to engage in collusion to suppress the wages of these talented people and prevent bidding wars for their services.

      • 100K++ says:

        well, i don’t think ILM & Pixar are special in this.

        I know for certain many producers informally meet and obtusely say something along the lines of, “we’re not gonna pay 100 bux an hour for inferno guys to cut mattes”. and that is fair. and that is collusion.

        also, i know artists have good-ol-boy network and make sure they’re pals don’t get sold short either. of course, being an artist before a business man (usually) they’re not as savy at the game. woe is the ‘artist’.

        when i was an intern the best advice about money i got was this – paraphrased. “if you’re unhappy about money do something about it, or STFU.”

        now, everyone is in a position where the middle ground is eroding, clients included. my only true hope is the line from the money, and the content creators is shortened, hopefully stuffing more cash into innovative people and places. market efficiency at work.

        mother nature is cruel, this is an interesting time in our young industry and i’m pleased too see ya’ll thinking about what it means and where it’s going. unfortunatley shazbot happens along the way. luckily artists are only in this for the cgeez and the ladies, money is a side effect.

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