The ongoing Writers Guild of America (WGA) strike is the number one Hollywood talking point, more than blockbuster season box office or executives’ holiday plans. And while there have been significant developments involving sister guilds and their rounds of contract renewal talks, there’s been no real sign of a resolution between the writers’ negotiators or their counterparts at the Alliance of Motion Picture and Television Producers (AMPTP).
In the first week of June, the national board of the Directors Guild of America (DGA) approved a tentative agreement with AMPTP which does seem to have put to bed the notion of a three-guild strike that consumed attendees at Cannes Film Festival. Members are now voting to ratify the tentative agreement (the polls are open until June 23), which introduces the Guild’s first 5% annual wage increase, a new residual structure based on greater studio transparency, and twice-yearly meetings with studios about AI.
Yet, the prospect of a strike by SAG-AFTRA remains very real and is spooking the Hollywood community. Coupled with the WGA industrial action that started on May 2 and has already shut down most US scripted television and is bleeding into the feature film production schedule, this would essentially bring Hollywood and US production around the world to a grinding halt.
SAG-AFTRA members just voted overwhelmingly to authorise a strike should the actors’ negotiators fail to reach terms with AMPTP when their Minimum Basic Agreement expires on June 30. Contract renewal talks have just got underway.
What happens from here is anyone’s guess. When DGA announced its tentative deal with AMPTP, WGA promptly sent its congratulations, although it felt like a shrug of the shoulders. Leadership at the writers’ guild made it clear they were not about to cave and allow Hollywood’s studios and streamers, for whom AMPTP negotiates in these contract talks, to “divide and conquer” the guilds one by one.
The fact is, WGA — by far the most hard-nosed of all the guilds — and AMPTP remain far apart on a number of things. This despite a recent offer by AMPTP that WGA said still left a lot of distance between what the studios and streamers are willing to give and what WGA wants by way of minimum payments and benefits, residuals, staffing of smaller writers rooms known as ‘mini-rooms’ (that often take up a lot of a writer’s time without a show even being picked up), and safeguards preventing the use of artificial intelligence (AI) from creating scripts.
Most disputes in Hollywood are about money and tend to be resolved. However, as Gail Berman — the Elvis producer and chairman and CEO of The Jackal Group who previously led Paramount Pictures and was president of entertainment at Fox Broadcasting — said in a recent interview, this is much more profound. WGA’s overall demands are about the future of creatives in the industry and how the next generation of writers can build sustainable careers and find success as their predecessors have done.
The streaming age seems to have made that prospect less attainable.
Changed times
The last WGA strike, which ran for 100 days in 2007-08, cost the California economy $2.1bn according to the Milken Institute economic think tank. Netflix had just launched its streaming service; today it commands a global subscriber base of more than 230 million and sits atop a sea of platforms. These companies’ fortunes and growth paths may differ, yet there is no denying that streaming has transformed Hollywood economics.
Superior buying power and the need for a constant flow of content to hold onto subscribers has created a scarcity of available talent and crews, with the most coveted names working for high up-front fees. For the bulk of writers and actors, however, long hours do not result in high pay and they struggle to build career momentum. (Many independent producers are in the same boat, but that’s another story.)
That said, the Hollywood companies are in the midst of a severe bout of belt-tightening, laying off staff — 7,000 in the case of Disney under recently returned CEO Bob Iger — removing content from platforms to save on tech costs, streamlining the production process and cutting back on the content buying sprees of yesteryear.
All this, the Hollywood companies argue, makes it harder for them to meet the guilds’ demands for better terms. That is a hard pill for the guilds to swallow given the well-publicised compensation packages enjoyed by the likes of Netflix co-CEO Ted Sarandos and executive chairman Reed Hastings, and by David Zaslav, CEO of Warner Bros Discovery who, like other heads of media conglomerates, oversees a legacy theatrical business alongside an ambitious streaming operation.
Nonetheless, the studios and streamers have pleaded financial constraints and seem less likely to come to the table to thrash out a quick deal. Sarandos told analysts on a recent earnings call that Netflix was well positioned to ride out a strike, with plenty of content in the can and a vibrant global production schedule.
While it may not be quite so comfortable for TV networks to play a waiting game in the hope WGA will make concessions — especially heading into the fall TV season when advertisers will want to see new shows — the calculation, at least until recently, was that the companies would let the strike run into August or September.
By then, the length of the work stoppage may trigger force majeure clauses and allow companies to terminate the least productive, expensive overall deals with writers. The thinking goes that once that happens, the companies may be more amenable to meeting WGA’s compensation (including benefits) demands, which the guild has said will cost the industry around $429m a year.
WGA says the studio and streamers have offered what amounts to $86m a year and believes the companies are simply being greedy, given the billions they reap annually in profits.
There is the sense among industry workers who spoke to Screen International that, far more than back in 2007-08, what is at stake today is more profound — the entertainment industry’s pay discrepancies mirror global socio-economic disparity. It has become dispiritingly hard, they say, for all but household names to earn a decent living.
On top of this, creators are fretting about AI and the prospect that it might replace their role in the creative process — let alone pose an existential threat to humanity, as several AI creators have been warning of late.
DGA and AMPTP have agreed that generative AI cannot replace the duties performed by directors, but writers and actors remain extremely cautious about the technology’s implications in their fields.
The WGA strike has affected television deeply. The more than 11,000 striking WGA members were prohibited from working as soon as the strike took effect on May 2, which immediately shut down the late-night talk shows — a TV staple in the US. Scripted narrative TV is grinding to a halt as writers rooms on upcoming seasons of hit shows such as Netflix’s Stranger Things, Max’s Hacks and ABC’s Abbott Elementary have closed, among a number of others.
Besides news and sports shows, only documentaries and reality TV are allowed to continue production, and sources believe reality TV will undergo some sort of resurgence as it did in 2007-08.
International shoots of US shows and films are being affected too. For now, it has been reported that Prime Video’s The Lord Of The Rings: The Rings Of Power is continuing with non-writing producers on set. But production on features such as Marvel Studios’ Blade and The Island, which was shooting in Spain and stars Joaquin Phoenix and Rooney Mara, as well as Amazon Studios series Blade Runner 2099 in Belfast, are just a few projects that have been put on hold until the strike climate resolves.
Doomsday scenario
As Screen has been reporting for over a month, the impact on many independent films has been considerable — in most cases they have been unable to get bonded unless production is completed by June 30.
Were the actors to go on strike for the first time since 1980, it would trigger a Hollywood doomsday scenario: all US productions and any international projects involving US guild members would grind to a halt.
The strike has already impacted Primetime Emmys campaigns. Pure writers are not allowed to talk about their work, while WGA is understood to have instructed showrunners — the multi-hyphenate creators who fulfil at least two functions out of writing, producing and directing — not to talk to press in support of their shows unless they discuss the strike.
Most have chosen not to campaign in solidarity with the picketing writers. Interviews that have appeared in the press tend to be those that were completed prior to the expiration of the WGA contract on May 1.
Similarly, For Your Consideration promotional events have been very light on showrunners who, for obvious reasons, typically play a key role in such things. Campaign strategists have shifted the focus to highlight more actors and crafts teams.
Given the nature of scripted live TV, were the WGA strike to extend into September it would place the Emmys show itself in jeopardy: the September 18 event in New York could not go ahead in its usual format without writers to script lines for hosts and presenters.
While it remains unclear how the strike will play out, what seems certain is that the 2024 schedule will be compromised and Hollywood can look forward to a production logjam once the parties settle their disputes.
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