Writers Guild Talks Going Down to the Wire as Hollywood Wonders Why

WGA Placeholder Contract Negotiations
Images: Shutterstock; Illustration: Variety

Indications are strong that industry negotiators will need be working down to the wire during the next five days to avoid a writers strike.

Sources tell Variety that there have been mixed results from the past two days of contract negotiations Tuesday and Wednesday. There were no public comments from either side at the headquarters of the Alliance of Motion Picture and Television Producers as both camps are observing a media blackout.

On Tuesday, sources said the AMPTP made some adjustments to the previous offer extended to the WGA on April 13. The studio side was awaiting a detailed response from WGA on Wednesday. One person noted that on Tuesday WGA negotiators came into the room toting papers with “96.3%” printed out in large type — a reference to the record percentage of eligible guild members who supported the strike authorization vote.

Sources characterized the mood in the room at AMPTP headquarters in Sherman Oaks, California, as not hostile, but not exactly friendly. There is frustration on the studio side that the WGA has yet to respond in detail to the studio’s biggest offer, a response to the WGA’s proposal to adjust compensation formulas and more strictly define the time frame for a season for writers who work on short-order TV series, a proposal known by the shorthand of “span.”

Industry sources on both sides continue to hold out hope that sides will be able to bridge the gaps that are not so wide as to be insurmountable, in the view of those close to the situation. But there is little doubt that the talks will go down to the wire this weekend and probably on Monday.

With a strike possible as early as 12:01 a.m. PT on May 2, one of the big questions among those in Hollywood this week is why the negotiating did not take place much earlier — particularly when there’s plenty of precedent for doing so.

In 2014, the WGA and AMPTP reached a tentative deal on April 2, a month before the expiration date. And in 2011, the two sides finalized an agreement on March 20, a full six weeks out. The drama-free 2011 pact came three years after the acrimonious 2007-2008 strike.

There’s also the new deal for a three-year master contract made by the Directors Guild of America just before Christmas, more than six months before the June 30 expiration. The DGA typically makes its agreements at least half a year before its contracts expire, contending that doing so will give directors the best possible deal in exchange for avoiding labor unrest.

The WGA approach has often been rooted in the strategy that there is leverage as the clock is ticking and that the strike threat needs to be tangible to persuade employers to give in on key issues. Negotiations this time around started March 13, a month and half before the expiration. The number of days in negotiations so far is 18.

Several transactional attorneys said Wednesday that the current WGA-AMPTP impasse should not be a surprise — given the level of complexity of the current landscape, coupled with the WGA’s need for revising compensation terms for short-order series and loosening the exclusivity limits on writers during a show’s run. WGA members have been seeing lost income and long production timetables for many cable and streaming shows, which produce fewer episodes than the traditional 22- or 24-episode seasons for broadcast network shows.

“It’s hard to make a deal these days,” said Richard Marks, a partner at The Point Media. “Both sides obviously think they have more leverage as they get closer to expiration. And it’s not surprising that they don’t have a deal yet, given how divided the whole world is right now. Compensation terms for shorter series work has clearly ripened into an issue for writers because its’ an area of increasing production.”

Jerry Glover of Leavens Strand & Glover said the emergence of streaming giants such as Netflix and Amazon has forced the WGA leaders to adjust to a profoundly altered landscape for its members.

“It’s not unusual that this is going down to the wire,” Glover said. “It’s a negotiating tactic that both sides can use. Some of it is theatrical, given that we’re in the entertainment business.”

Glover pointed out that Hollywood unions felt shortchanged in previous decades for agreeing to initial home video and DVD compensation formulas that were never adjusted upward as the format grew more successful. “So unions are very wary of getting left behind by technological change,” he added.

David M. Smith, an associate professor of economics at the Pepperdine Graziadio School of Business and Management, contends that — even at this late date — both sides may be reluctant to disclose their bottom line for making a deal.

“Their leaders are trying to establish the guidelines in new areas to cover the long-term prosperity of their members, and they may be willing to go on strike to do that,” he added.

A strike would require most of the WGA’s roughly 12,000 members to stop work on projects for the major studios, although it would not effect members who work under separate news and digital contacts. It would cause a near immediate blackout of late-night television programming and daytime soaps. If the work stoppage dragged on into June, it would surely disrupt the production of programs for the 2017-18 TV season and scripted summer shows currently in production.

Smith told Variety he’s optimistic that the two sides can make a deal before May 2.

“I think there’s room for an agreement,” Smith noted. “The WGA demands are not unreasonable in light of the changes to the industry.”

Marks agreed, adding, “There’s enough money to go around for a deal.”

The WGA announced Monday that it had obtained a 96% positive vote from members for a strike authorization. A total of 6,310 ballots were cast and 67.5% of eligible WGA members voted. The level of support for the strike authorization was well above the 90% level achieved in 2007. WGA leaders made the case that while they are hoping to avoid a strike, they needed a show of unity from members in order to negotiate the best deal.