Amid a Wall Street squeeze on studios, guilds are forming a united front on demanding major changes to pay scales for digital releases
Studios began negotiating with the entertainment industry’s labor guilds Monday, marking the start of a critical period for Hollywood’s future.
While the specific needs of the WGA, DGA and SAG-AFTRA vary, the three guilds are on the same page in demanding significant changes to how their members are paid for TV shows and films released on streaming, which since the last industrywide strike in 2008 has become the foremost medium through which Hollywood’s work is viewed worldwide.
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“The struggles that writers are facing are across the board,” he said. “Earnings for writers in every sector of our business aren’t just not being properly compensated, they’re leaving writers struggling to make a living.”
“Let’s go give ’em hell”
While the Directors Guild and SAG-AFTRA are still in the process of meeting with members to form their pattern of demands — the DGA will begin talks on May 10 pending the results of the WGA talks — insiders at both guilds have said that talks so far have shown that, as with the WGA, streaming compensation is the top priority among their members.
While all three guilds have worked to build labor militancy ahead of these talks, the WGA’s members have been the most outspoken in demanding change. This could be seen during the Writers Guild Awards earlier this month, where many of the award winners took time in their acceptance speeches to call on guild members to get off the sidelines.
Foremost among them was newly-minted Oscar winner Daniel Kwan, co-writer-director of “Everything Everywhere All at Once,” who thanked his strike captain in his WGA award speech and urged members not to take the gains negotiated by the guild in past years for granted.
“If you don’t have a captain yet, go find one,” he urged writers. “Let’s go give ’em hell.”
Goodman and his successor, WGA West president Meredith Stiehm, said this is the result of years of organizing, going back to 2019 when, under Goodman’s leadership, the guild rallied members together for a mass walkout from talent agencies to push them to eliminate packaging fees. The campaign was successful, with agencies completely eliminating the fees last summer.
In the meantime, as IATSE held its own contract talks and kept labor at the top of Hollywood’s mind in 2021 and 2022, the WGA continued to hold meetings with members to keep them engaged after the packaging fee campaign. Members told them of their struggles in the industry, providing personal accounts used in crafting the pattern of demands.
“It’s not accidental that we have this solidarity… we put a survey out to our members and we got 7,000 responses,” Stiehm said. “And it was because their stories were considered when we made these proposals that they were like, ‘Yeah, that’s my problem,’ and they recognize that the union is speaking with their voice.”
A changing Hollywood landscape
With all this momentum, the Guild now enters talks with the studios’ representative, the Alliance of Motion Picture and Television Producers, against an industry landscape that has significantly changed from 2020 when streaming services like Disney+, HBO Max and Peacock were launching under the shadow of the COVID-19 pandemic. Studios became locked in an arms race for streaming dominance, sparing no expense to fill their services with as much exclusive original programming as possible.
Now, with media stocks dropping and studios announcing layoffs and content writedowns, that money faucet is no longer flowing as freely. The WGA argues that studios’ resources haven’t diminished to the point that studios should use it to dodge paying their members for the value they bring to streamers.
“Even during this downturn on Wall Street, these studios are still set to pour tens of billions into production this year,” Goodman said. “Every time we negotiate, we do so in a industry that is still fundamentally strong and immensely profitable, and our members must share in that profit.”
When reached for comment, the AMPTP said in a statement that it and its member studios “approach this negotiation and the ones to follow with the long-term health and stability of the industry as our priority.”
“We are all partners in charting the future of our business together and fully committed to reaching a mutually beneficial deal with each of our bargaining partners. The goal is to keep production active so that all of us can continue working and continue to deliver to consumers the best entertainment product available in the world,” the studio labor representative said.
Behind the scenes, some on the management side haven’t been pleased by the WGA’s public statements. One studio executive who spoke to TheWrap anonymously bristled at one of the WGA’s blog posts that dismissed reports of studio layoffs and financial struggles as “standard refrains during union contract negotiations.”
“Studios do not report negative cash flow and announce layoffs that cost thousands of people their jobs as a labor negotiation tactic,” the executive said. “These posts just feel like bad faith framing to put us on the back foot before the talks even started.”
Will the WGA’s push for change and the studios’ current Wall Street squeeze create a negotiating divide too big to bridge? Some fear it might, but for now few on either side believe it’s inevitable that a strike will ensue.
“We can’t control what the whole industry thinks, but we’ve made it clear to our members that anything they’ve heard about a strike being guaranteed does not come from us,” Goodman said. “And in fact, I think that assumption is just a reflection of the guild’s history of fighting and succeeding for its members, whether the WGA did strike or not.”
It is customary for studios to make strike contingency plans during a contract negotiation year, regardless of the context. This includes opening writers rooms early to stockpile scripts and accelerating productions that are already shooting to be finished before the WGA contract is set to expire on May 1.
A studio insider with knowledge of the industry’s management sentiment told TheWrap that “a strike should not be a foregone conclusion” at this point.
As for whether current financial strains may make the studios inflexible, the insider pointed to the fact that the companies have, in the past, made significant concessions to the guilds. As an example, the WGA has seen increases in residuals thanks to gains negotiated in the 2020 contract. WGA West reported an all-time high in residuals of $493.6 million for 2021, with 45% of those residuals coming from streaming as opposed to 36% the year prior.
Unease in the writers rooms
But for the Guild, these residual gains are being eaten into by the lower wages writers receive due to the recent trend of studios ordering shorter seasons, meaning fewer episodes that writers get paid for, and the use of mini-rooms, which are writers rooms with a smaller staff that are set up before a project begins production or is even greenlit and in which writers are paid at minimum rates.
Studio insiders say the duration and purpose of mini-rooms can vary from project to project, and that the longest-lasting ones tend to be for lore-heavy shows like “Westworld” where world-building must be established before episode scripts can be written. But regardless of their purpose, the Guild believes such mini-rooms are being abused because studios are compensating writers less for the work.
“A writers room is a writers room,” said WGA chief negotiator Ellen Stutzman. “You can’t just say that the work writers do in a mini-room has less value than what they do in a regular writers room after the show is greenlit.” The guild is seeking “guardrails” on the practice, she said.
Stutzman also says that shorter orders and mini-rooms can also lead to hurdles that affect Hollywood’s diversity efforts. With 98% of staff writers being paid at minimum during the 2021-22 TV season, and on average working 20 weeks per year on a streaming project as opposed to 29 on a network project, writers are not as easily able to establish financial security or build the experience to get hired in more senior positions in future projects. This can inhibit writers of color who don’t enter Hollywood with a financial safety net from getting a foothold in the industry.
“This kind of dynamic of people feeling like they can’t make a living is new and indicative of how broken the system has become for writers,” she said. “It used to be that a writing job was enough to save and be covered even if another job wasn’t lined up. And the way things have gone is that newer writers, and that often means writers of color, get jobs that last six to eight weeks at minimum rates and then don’t have something else lined up, and the minimums keep repeating instead of them going up steadily, which is the way it should be.”
“Abbott Elementary” executive story editor Brittani Nichols echoed Stutzman’s argument in a Twitter thread this past week, saying that she has been fortunate enough to find work on an ABC 22-episode network sitcom that allowed her to get promoted to her current position for the show’s second season, which brings with it script fees on top of regular wages.
But prior to that Nichols said that she has found herself receiving staff writer job offers despite having experience as a story editor. She said this is a trend that is being faced by thousands of writers, many of whom are people of color, as they struggle to work their way up the writer room ladder despite having years of experience as a story editor or writer-producer.
“Before ‘Abbott,’ I was able to survive this industry by piecing together jobs on six- and 8-episode shows and working ‘unscripted’ shows that should be union but aren’t. But not everyone is as lucky as I am. Largely, the state of the industry is keeping people like me out,” Nichols tweeted.
The specifics of how the WGA wishes to resolve this issue remain confidential, included in the initial proposals that it and the AMPTP exchanged this past week. The first few days of negotiations will be based around the common ground and differences between these proposals.
Stutzman did tell TheWrap that the WGA will be looking to possibly increase minimum rates beyond the usual 3% that is the baseline in most Hollywood labor contracts, citing the need to do so due to rapid inflation over the past two years and the growing share of WGA members working at minimum rates.
The guild is also expected to push for minimum requirements for the number of writers in a show’s writers’ room and minimum time employed, which could curb the trend of writers on streaming shows working for less time in standard rooms and clamping down on mini-rooms.
“We heard regularly in our meetings with members that writers feel like the work they put in has been disconnected from the compensation they get, and that the process of working their way up in the industry has been broken,” Stutzman said. “We are looking at every method possible to break that cycle in this next contract.”
There are some methods that may be a non-starter for the AMPTP. One of the goals listed in the WGA’s pattern of demands is to “expand span protections to cover all television writers.” Span protections were added to the WGA contract in 2017 to protect overscale pay for writer-producers. If a writer-producer earning below a certain limit is working longer than 2.4 weeks per episode on a series, span protections ensure that additional compensation is required.
Ivy Kagan Bierman, chair of the Entertainment Labor Group at Loeb & Loeb, and who has negotiated labor contracts on behalf of individual entertainment companies, believes that studios may strongly push back if the WGA pushes for span protections to be expanded to staff writers and story editors.
“Currently, there are several requirements for writer-producers to qualify for span protections,” Bierman said. “If the WGA is looking to expand that to all writers I would expect a lot of studio resistance as that would significantly increase TV budgets if the additional compensation that comes with span protections is multiplied across entire writers rooms in every production.”
It’s for similar reasons that Bierman believes the AMPTP could also push back against minimum staffing requirements in the MBA, as it “has always been management’s right” to control staffing hires on a production. But the biggest tension point may be over viewership data, which can be key to increasing compensation for writers on hit shows, but which have been fiercely guarded by Netflix and other streamers.
“It’s understandable that the guilds want to have streaming data for purposes of determining residuals formulas,” Bierman said. “But Netflix and other streamers have resisted this pressure for years and almost assuredly they will try to do so again in these negotiations.”
Hollywood’s voice
AMPTP’s negotiating team, led by president Carol Lombardini, will be tasked with gathering the interests of many different studios into one united voice. The staunch protection of data by the streaming-only studios has not only irked Hollywood labor but also some within the legacy studios. When Netflix joined the Motion Picture Association in 2019, there were grumblings among movie theater owners and some fellow studio execs that they had done so without assurances that Netflix would adhere to the industry standard of reporting box office numbers for their theatrical releases, something it has never done to this day.
Similarly, Bierman said it’s possible that sharing streaming data may be an issue that streamers may object to but other studios may not. Such is the nature of Hollywood labor negotiations, where studios with various financial situations and interests don’t always end up on the same page.
“The AMPTP has to get feedback from the studios and other constituents at the bargaining table regarding the WGA’s proposals and positions, and then present counterproposals that take all of that feedback into account,” she said. “It’s a lengthy process made even longer by the changing nature of Hollywood with streaming, so this is likely to take weeks to play out. I remain cautiously optimistic that the parties will reach a deal and avert a strike.”
And even if that weeks-long, perhaps months-long, process yields a tentative agreement, that doesn’t necessarily mean WGA members will vote to ratify it. It has been less than two years since the various locals representing tech crew or below-the-line workers approved IATSE’s Hollywood Basic Agreement with the AMPTP by the narrowest of margins, the ratification only going through due to the delegate voting system used by the crew union.
As in all labor talks, compromises will have to be made between the AMPTP and the WGA, not to mention the DGA and SAG-AFTRA this coming summer. The question will be whether after those compromises the agreement is still enough to satisfy creative talent in Hollywood who feel they aren’t being paid fairly for what they bring to a multibillion dollar industry.
“Largely, the state of the industry is keeping people like me out or creating a situation where we have to leave because we can’t make ends meet,” Nichols tweeted. “We should not be forced to give up on our dreams after we’ve already done the near impossible task of landing a union writing job because of corporate greed.”
Jeremy Fuster
Box Office Reporter • jeremy.fuster@thewrap.com • Twitter: @jeremyfuster