How Production Shutdown Shifts Leverage in WGA vs. AMPTP War

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Cheyne Gateley/Variety Intelligence Platform

Coronavirus has seen movies delayed, sports cancelled and TV series end early, but it won’t be getting in the way of negotiations between the Alliance of Motion Picture and Television Producers (AMPTP) and Writers Guild of America (WGA) over the renewal of their Minimum Basic Agreement.

The AMPTP informed the WGA on April 8th that the talks, which had been put on ice owing to the outbreak, must begin by April 20. The existing MBA is set to expire on May 1, but the AMPTP has offered to extend the terms to June 30. The WGA is reportedly seeking a longer extension as members navigate the pandemic. 

All well and good. But with talk of negotiations starting up as content production has effectively been furloughed, one side finds itself with more leverage.

Prior to the coronavirus epidemic, there had been strong fears that a militant WGA, still waging a war against the major talent agencies that has now lasted a year, would present terms and strike rather than compromise. 

Networks, SVODs and studios who rely on scripted content in their lineups were said to be rushing production on some shows in order to beat the May 1st deadline, although production shutdowns due to Covid-19 will have rendered these moves moot. Studios were also said to be stockpiling scripts that could be filmed should a strike be called, with a particular focus on mini-series or standalone series that could become anthologies. Some also stocked up on unscripted fare, such as celebrity-hosted gameshows, in an effort to mitigate holes in the schedule.

On the WGA side, 91% of members voted in February to approve the pattern of demands to present to the AMPTP. In other words, the majority were at least weighing the possibility of a strike. For some writers though, the period of no pay has come earlier given production shutdowns and premature season endings sees some out of work sooner than anticipated.

The production shutdown also removes a potential ace up the sleeves that the WGA had ready. Netflix and other SVODs not affiliated with traditional networks and studios are not signatories to the WGA’s MBA, save for Apple, but merely adhere to them. With Netflix agreeing their own deal with SAG in 2019, this meant the possibility in a pre-Covid world that the WGA could say they would cut their own deal with Netflix, who would be able to staff new seasons of existing shows and film them amidst a strike. 

This could have given the WGA considerable leverage, able to threaten new subscription services from Disney, WarnerMedia and NBCUniversal with the potential of a content slowdown whilst supplying streaming rivals with fresh content. Instead, the slowdown specter emerged earlier and impacted everyone, wiping this from the WGA’s arsenal for the time being.

Nevertheless, it is AMPTP that could blink first. Given the WGA has turned toward a more assertive air when advocating member interests, it’s hard to foresee a world where they back down in the talks. Even though the WGA has lost their Netflix trump card, they’ve gained another. The halt in production of new content means any shows stockpiled for a strike will be burned through to keep new content on the air before summer, leaving the cupboards of networks bare. 

And with the AMPTP already hurting with the production slowdown impacting not just existing shows but TV pilot season, the onus will surely be upon its members to avert an even lengthier period without scripted shows and do what’s possible to avert a strike later in the summer. 

Should neither side blink in this contest, the potential for an extended period of time, lasting until fall, with few comedies or dramas on air will heighten dramatically. Arguably this would impact the networks more, already hurting from a loss of ad revenue and looking to avoid future revenue hits. 

This is also the time where the WGA’s Netflix trump card could come back into play. Once show production is able to resume, having the WGA call a strike to once again shut the industry down will put the ball in their court. Already content starved, and faced with the WGA allowing rivals like Netflix to get a head start on new making new shows while AMPTP members wait, will be giving up a considerable advantage. This will be particularly problematic for owners of new services such as HBO Max and Peacock looking to establish themselves in their debut year, as they will lag behind Netflix in public perception.

This is likely why the WGA is bidding for an extension to the current agreement. They are waiting for the optimal time to strengthen their hand, by running down the production shutdown clock until studios are able to open again, and then hitting the networks with a double whammy of “not for you!”

With AMPTP members likely desperate to have new content for their TV networks and streaming services, and make back some of the missing ad revenues, assuming they keep their nerve, the balance of power in this year’s negotiations will be with the WGA. With a long history of not having their demands met, 2020 could be the year where the WGA finally gets what it wants.