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WGA Contract Talks Complicated by Dramatic Changes in Television Landscape

Ten years ago, the Writers Guild of America forced the major media conglomerates to address the question of how high-end content creators would be paid in the digital future. That future is now — and WGA troops are once again gathering at the border.

The economic pressures fueling strike talk among the guild’s rank and file are an indicator of broader changes in the industry, particularly in TV, that have been coming fast and furious over the past few years.

The WGA’s demands in this round of contract talks are pushing the members of Alliance of Motion Picture and Television Producers to grapple with complicated issues that affect all aspects of the business, not just writers’ paychecks. The conglomerates haven’t entirely figured out how they should adapt to the rise of binge viewing-on-demand, shorter-episode orders, the growth of limited and anthology series, and the whiplash-inducing spike in serious competition from deep-pocketed upstarts like Netflix and Amazon.

Curt Merlo for Variety

Writers can’t be blamed for pressing the issue on pay rates for entry and mid-level writers in an environment where the highest-paying traditional jobs — those on 22-episode series that yielded five-figure residuals — are dwindling. From the studios’ perspective, such demands amount to the WGA asking for a tweak of one part of the blueprint while the skyscraper is in the midst of a top-to-bottom renovation.

Herein lies the disconnect that led the WGA West and WGA East to initiate last week’s strike authorization vote. After nearly two weeks of negotiations, the guild and the AMPTP couldn’t agree on basic facts, such as who called off the talks on March 23. The exchange of letters in the press rather than ideas across the bargaining table was disheartening to many who suffered through the 100-day WGA strike in 2007-08. The sides are set to resume talks April 10, which leaves them just three weeks to hammer out a deal before the current contract expires May 1.

Of the two hottest issues on the table, one cluster falls into the category of compensation and work rules that are most burdensome to middle-class TV writers, who are generally younger. The other revolves around the need for a capital influx for the guild’s healthcare plan, which more affects all members.

On the AMPTP side, there could be a divide between the studios that are more active in producing for subscription VOD outlets and those that focus on traditional linear buyers. The compensation and work-rule issues have become more acute due to the fast rise of Netflix, and to a lesser degree Amazon and Hulu, as premium TV players that operate very differently from their network and cable predecessors.

The interests of the largest broadcast and cable networks are corporately aligned with studios that are AMPTP members. Netflix and Amazon are not in the AMPTP, although both outlets acquire most of their scripted programming from member studios. But unlike the traditional networks, these SVOD giants pay more up front to license shows, in order to compensate for the lack of syndication options down the road. Among the ranks of the WGA, sought-after showrunners (the haves) tend to see more of this up-front money, exacerbating the divide between them and mid- and low-level writers (the have-nots).

The foundation of the TV-related compensation provisions in the WGA’s 671-page Minimum Basic Agreement is the traditional September-May television season. Minimum wages and script fees have been calculated for decades on the basis of a successful series running 22 or 24 episodes per season on a predictable timetable. But this is no longer the norm, particularly for shows produced for pay cable, basic cable, and SVOD.

Low- and mid-level writers are often paid by the episode for shows that run anywhere from six to 13 installments. There can often be a lag of six months or more between the time that the writing is finished on a series and the time a decision is made on whether to renew. In some cases, writers can be kept off the market during that time by exclusivity holds built into contracts. Or the studio has an option on the writer’s services for another season, making it harder for the writer to secure a full-time job on another show.

Writers who work on shorter-episode shows typically try to line up two or more series, or land a movie-script commission or rewrite gig, in order to maintain a steady income. Juggling work schedules and availability windows can be tricky.

Even in this time of Peak TV, with more work for writers than ever before, average income for all but the top-echelon WGA members has fallen — by 23% in the past two years, per the guild. Diminishing residual payments accounts for a good chunk of that decline. The broadcast networks no longer program reruns of most shows, a nod to the fact that viewers have many more options to catch shows later, via on-demand platforms.

Broadcast network residual fees (the richest kind) have sunk 21.6% from 2010-2015 to a total of $19.4 million in 2016, according to the WGA’s annual report. Residuals from TV reruns made available on digital platforms were up 896% over the same period, but they still amounted to only $25.4 million in 2015, and that covers exponentially more airings.

In this economic climate, the studios had to know that the WGA would press hard on certain writer-specific issues it feels could ease the pinch on the vast middle of its membership. The issues of options and exclusivity were addressed in a cursory way in the last master film and TV contract, reached in 2014. But demand for original content — and writers — has been on steroids since then.

The guild is seeking higher minimums and script fees for writers who work on shorter-episode series. It wants stricter limits on the length of time a studio can keep them under holds and options. The proposal from the WGA has some top talent reps concerned that it will encourage studios to squeeze out lower-rung writing posts. “It’s money,” one veteran TV agent said. “It’s got to come from somewhere.”

The question of whether the guild’s most influential members — highly paid showrunners and screenwriters — will rally behind a strike threat on behalf of younger writers will be answered by the turnout for the authorization vote later this month. WGA member sources on both coasts say the spirit of solidarity is starting to run high, encouraged by the general fiery mood of resistance spurred by widespread opposition to the Trump administration.

The fight for an increase in AMPTP funding for the WGA’s over-taxed healthcare plan could well be another uniting force for the guild — and a deal-breaker for the studios.

All of these issues will make for a highly combustible atmosphere when the studios and guild negotiators meet next at AMPTP headquarters in Encino, Calif. The first round of bargaining last month amounted to a bit of “Kabuki theater” for both sides, one WGA vet admitted. The pressure is on both sides to get to the heart of the drama, or the industry will surely suffer the consequences.

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