A bad sense of déjà vu is settling over the industry as the year winds down.
Hollywood is in the throes of transition, and an economic downturn is on the horizon. The business is full of Under New Management signs after an M&A spree. Big Media earnings and stock prices are in the tank because of all the uncertainty. And Hollywood’s scribe tribe is restless.
The outlook for the next six months is starting to look a lot like it did in the summer and fall of 2007, the last time the entertainment industry’s biggest employers faced a work stoppage with the Writers Guild of America.
There is no doubt that the guild is bracing for a battle. The studios are hastily starting to get there as well. The dreaded S-word — stockpiling — is happening, the industry equivalent of troops gathering at a border.
The guild and the Alliance of Motion Picture and Television Producers, the bargaining agent for Hollywood’s major studios, networks and streamers, face a May 1 deadline for setting a new Minimum Basic Agreement to succeed the current pact that governs most mainstream scripted TV and film production. SAG-AFTRA and the Directors Guild of America, meanwhile, have contracts that expire on June 30.
The process of getting all three unions to the negotiating table took a step forward this week when the WGA unveiled the 24 members of the negotiating committee that will lead the talks with the majors. The group is co-chaired by two former WGA West presidents, showrunners David Goodman and Chris Keyser, who led the guild’s surprisingly successful campaign against Hollywood’s largest talent agencies from 2019-21.
Other members include many of those who were active in the drive to ban the decades old practice of talent agencies receiving packaging fees for helping to assemble TV series and movies.
“Everything changed after Labor Day,” one longtime network executive says. “Everybody’s calling around trying to find anyone with a desk-drawer project that has a few scripts done.”
Industry insiders say there’s been a noticeable scramble among creative executives at top shops to get scripts completed and to set schedules that accelerate writing time to be finished well before the May 1 deadline. Production timetables are also changing for existing series. There are anecdotal reports of networks pushing shows to shuffle planned winter hiatus weeks in order to bank as many episodes as possible.
The hurry-up comes at a fraught moment, when Hollywood is already feeling the effects of belt-tightening and strategy shifts among the largest streamers. Netflix, Amazon and Apple have pumped billions of dollars of new capital into the content business over the past decade. Now, as Netflix reaches the promised land of profitability, its appetite for spending to drive subscriber growth is changing.
The presence of streamers with global scope — a list that includes Disney+ and HBO Max — is the X factor in this round of negotiations. More than ever, Holywood’s largest employers have options for creating or acquiring content from outside the U.S.
“What if Netflix decides it doesn’t need a new show every week? What if Amazon decides to drop to only a few big shows a year? If they don’t lose Prime customers, are they going to care?” asks a senior talent agency executive who is nervously eyeing the marketplace. “Every writer I know that makes more than $1 million a year is freaking out about a strike.”
The biggest issue in the talks, as always, will be over economic terms. Writer-centric social media channels are replete with stories of scribes receiving residual payments for streaming reruns that wouldn’t cover dinner for two at The Cheesecake Factory. The WGA, as well as the DGA and SAG-AFTRA, are surely poised to push the majors for gains in streaming residuals and royalties. As more and
more viewing of TV and movies migrates to online and on-demand platforms, precious few WGA members receive the boon of a $15,000-$25,000 residual check for a linear on-air rerun of an episode or a movie they penned.
But there are other issues on the table that may prove even tougher to sort out than increases for basic minimums.
Negotiators will have to come to grips with fundamental structural change, particularly in the expanding arena of television series. Mid- and upper-level TV series writers who used to bank $500,000 working on a 22-episode drama or comedy series now make half that amount working on an eight- to 10-episode series. Moreover, while the number of scripted series has expanded exponentially, the volume of writers and producers working on each series has significantly declined.
A typical network TV comedy series had 20 to 25 writers and producers on the staff 15 years ago. Today, even big-budget series are produced with a handful of writers who finish off scripts well in advance of filming. That means there are far fewer opportunities for writers to learn the ropes of showrunning and post-production by shadowing those leaders during the rush of physical production.
As was the case in 2007, labor and management will come to the table with different perspectives on what changes are needed most. Sorting out the money part will be hard enough, but the growing list of “existential issues” is what has the town on edge as fall turns to winter.
A bitter and prolonged strike “should be avoided at all costs,” one top literary and talent manager says, speaking on the condition of anonymity.
“We need to turn the temperature down now.”