WGA – Striking A Balance

The Hollywood strikes got real this week, although it’s unclear how the latest machinations between the Writers Guild of America and the AMPTP will ultimately affect what still seems like an intractable gulf.

On the positive front, Tuesday brought a much needed sit-down between WGA negotiators and AMPTP President Carol Lombardini, who showed up with a C-Suite Strike Force including Disney CEO Bob Iger, Warner Bros. Discovery CEO David Zaslav, Netflix co-CEO Ted Sarandos, and NBCUniversal Chief Content Officer Donna Langley. The studios released its latest proposal to the public 20 minutes after the meeting ended, with the WGA issuing a long statement on Thursday painting it as “neither nothing, nor nearly enough.” In the current climate, that passes for comity, although the WGA said many of the deal points still rehash the Director’s Guild of America deal struck in early June and which both the WGA and SAG-AFTRA patently rejected as a template before going on strike. On one hand, this week represents progress in that at least the writers and studios sat down at the table. On the other hand, it’s the same ol’, same ol’ situation (cue Motley Crue).

Everyone offers up simplicity for mass consumption, suggesting that the other side is either unreasonable or greedy. But this is more complicated than dueling statements and proposals would suggest. While the studios have moved slightly toward writers’ demands, the WGA describes their concessions as “half measures” that don’t fully address a supposedly existential threat and are “still in the typical AMPTP mode of seeming to give while limiting the actual gains.” Said Lombardo: “We have come to the table with an offer that meets the priority concerns the writers have expressed.” The truth probably lies somewhere in the middle. For example, the WGA released a chart showing how much their proposals would annually impact studio revenue, with roughly $330 million in costs spread across Amazon, Apple, Disney, NBCU, Netflix, Paramount Global, Sony, and Warner Bros. Discovery, whose combined 2023 revenue is expected to top $1.4 trillion. Yes, trillion. That means if the studios completely caved to all of WGA’s demands, their increased costs would amount to about a quarter of one percent of their combined revenue. But the WGA has yet to acknowledge that most of the studios are still bleeding red on direct-to-consumer streaming, which is the center of the fight over residuals, the size of writers’ rooms, and a host of other issues. Focusing on all that top-line revenue rather than studios’ bottom-line streaming losses makes for a better narrative. But then again, creating narratives is exactly what writers do.

Interestingly, the lingering strikes seem to have pressured the studios to make some concessions to the WGA, many of which would form a basis for future negotiations with actors if WGA signed a deal first. According to AMPTP’s statement this week, the studios have agreed to an AVOD residual payment of 2% of accountable receipts for continued use beyond 26 weeks on an AVOD platform. Right now, writers get nothing, so that’s a big benefit they don’t have now and effectively the same deal as basic cable. In addition, studios agreed to “unprecedented data transparency” to address a huge point of contention among writers who complain that they get no visibility on the success of streaming shows. (Actors have the same gripe.) In essence, SVODs would provide quarterly reports to WGA including aggregate number of minutes a show was viewed, along with total running time. But WGA said that just means its staff can study trends for the next three years “so we can return in 2026 to ask once again for a viewership-based residual.” AMPTP also acknowledged that generative artificial intelligence “is not a person” and won’t affect any script credits or compensation – but WGA countered that while it has “seen movement” from studios on AI protections, “we are not yet where we need to be. As one example, they continue to refuse to regulate the use of our work to train AI to write new content for a motion picture.”

Of course, the AMPTP has proposed some substantial raises for writers, including a 43.8% raise for writers in “development rooms” to $14,214 per week, with a 10-week minimum. In addition, those writers will now get separate payment for any episode they write to the tune of $43,000 for a one-hour script. That means a staff writer who writes a couple scripts on a 13-episode season could clear well over $200,000 for two and half months’ work (that may also be the only work they get for a couple years). Raises for regular writing rooms are more down to Earth (13% over three years). AMPTP hasn’t agreed to WGA’s demands for writer minimums in these rooms, only so far agreeing that “the Showrunner may select at least two writers to be employed (together with the Showrunner) for a period of at least 20 consecutive weeks.” The word “may” is important, suggesting that someone like A-List showrunner Taylor Sheridan, who generally writes his own shows solo, isn’t required to hire additional writers. In addition, all of AMPTP’s pay and residual raises noted above affect only “high budget” streaming shows that spend at least $1 million per 20-35 minute episode; $1.7 million per 36-65 minute episode, and $3 million for an episode of 66 minutes or more. While many scripted shows easily meet these thresholds, writers worry that studios could tinker with budgets and show lengths in ways that would produce endless loopholes. And without any guarantee of the number of writers in a room, many see the raises as unlikely to rain down on any but the most established (and lucky) writers.

Next? Gone are the days of 20-plus-episode scripted TV seasons (with a few exceptions) that could keep writers fed all year long. But if six- and eight-episode seasons are now the norm, with mini-rooms employing three writers (or even just one) rather than eight to 10, it’s no wonder that the WGA sees an existential threat to the profession of writing. The fear is that studios—egged on by Wall Street—will turn content creation into an AI-driven, algorithmic, soulless pursuit in which most writing and acting is treated like a side hustle, with no expectation that anyone should be able to make a full-time living at it. That’s obviously not sitting well with the creators, whose residual checks are comically low while media company CEOs make millions. But in the end, both sides need each other. It’s just a matter of how much pain each will continue to endure on the path to an eventual deal.

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