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Leslie Moonves: Studios ‘Very Sympathetic’ to Writers in Strike Negotiations

CBS Corp. CEO Leslie Moonves opened up at the Milken Conference on Wednesday about what it was like for him to deal with the negotiations with the WGA that averted a strike earlier this week.

“I think the companies were all together,” he said of the studios represented by the AMPTP. “We had a united front and guess what–we were very sympathetic to what the writers were asking for. This wasn’t ‘oh my god, they were crazy.’ The span issues of doing eight episodes over 12 months was absolutely valid. Health and pension were valid issues.”

Moonves spoke of how “dreadful” the 100-day strike that rocked the industry in 2007-08 and how it impacted his outlook heading into the negotiations, particularly that the studios got involved earlier to head off another disaster.

“I’m very happy it was over,” Moonves said of the negotiations. “It was a lot of build up, it ended very quickly, which I was glad. i think we’re all relieved. It took a little longer than we would have liked.”

Moonves also looked to the future negotiations with SAG-AFTRA and sounded an optimistic note. “There are things that would be special to the actors that i truly believe we’ll be sympathetic to and we’ll get a deal there,”  he said.

Moonves was on a panel with Fox Networks Group CEO Peter Rice, UTA CEO Jeremy Zimmer, Netflix chief content officer Ted Sarandos and actress/producer Reese Witherspoon. The others did not address the strike in an otherwise wide-ranging conversation on industry issues moderated by CNBC correspondent Julia Boorstin.

Moonves also weighed in on the ongoing debate regarding day-and-date theatrical releases, which he saw as necessary as the traditional exhibition business gets more challenged. “I think the theatrical business is going to have to change their model,” he cautioned.

Sarandos, whose Netflix is steadfast in bringing an increasing supply of first-run movies to the streaming service without being in second position to theaters, chimed in as well, noting that the success of Universal Pictures’ horror film “Get Out” has been misinterpreted as a validation of the traditional release model. “I think the opposite,” he said. “I think it was an enormous opportunity. If that was around day and date, it could have done five to 10 times the business it did in 25 days.”

Witherspoon noted that there is a generational shift playing out among artists who once revered the theatrical experience but want to maximize their audience. “Things change. I don’t know an actor who wouldn’t want more people to see their material,” she observed, adding that her recent HBO miniseries “Big Little Lies” ultimately attracted more eyeballs than most of her movies ever did.

Rice confirmed reports that 21st Century Fox is exploring a bid for Tribune Media’s TV-station business with Blackstone Group, citing the importance of scale in a fast-changing business. “With the UHF discount, we have the opportunity to control more distribution,” he said. “As we face up to four main (pay-TV) distributors in this country, having control of distribution on a broader footprint is more important.”

But Zimmer cautioned that attaining scale can also harm media businesses if it impedes their ability to act nimbly and capitalize on opportunity the way Netflix was already able to achieve. “They were so busy protecting their incumbent business, they couldn’t see the innovation coming and couldn’t adapt,” he warned.

The panel closed on an interesting note when Boorstin brought up the dueling lawsuits Fox and Netflix have filed against each other regarding allegations that Netflix was inducing Fox employees to break their contracts to join the streaming company. While Sarandos initially begged off from addressing legal matters, Rice dived in and explained that their battle may be necessary to get clarity from the state of California as to whether personal-services contracts need to be respected.

“Ultimately, we want to understand what the rules are,” said Rice. “If the California court decides no one is allowed to have a personal services contract, we’ll live with that and go on.”

Sarandos countered that Netflix is a “non-contract culture” that simply seeks to get the best personnel possible at the best price. “We’ll let the courts settle whether things things are enforceable or not,” he said.

 

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