‘Force Majeure’ Looms Over WGA Members as the Financial Pain of Suspended Deals Sets In

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The strike has unleashed an opportunity for studios to cut costs at writers’ expense – a “very reasonable terror,” Culture Machine’s Justin Simien tells TheWrap

(Culture Machine/Getty Images)

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Justin Simien was out celebrating his 40th birthday when he learned that Paramount was putting his TV deal on ice. He’d soon learn he was far from alone.

The creator of “Dear White People” had inked a coveted overall deal with Paramount TV Studios in 2021 through his Culture Machine production company. But in the wake of the WGA strike which prohibited writer-producers like Simien from working, Paramount cited a clause in his contract called “force majeure” to suspend the deal — a precursor to canceling it altogether.

Simien was “absolutely devastated and kind of caught by surprise,” he told TheWrap, of hearing the news in a call from his lawyer on May 7. The letter he’d been sent was just one of many.

The Writers Guild of America’s strike is entering its second month, and members like Simien are already feeling the financial pinch. “Force majeure,” a common concept in all kinds of commercial contracts, means an unexpected event outside of either party’s control. In most Hollywood contracts, studios can invoke it in the event of a union strike, Bryan Sullivan, an attorney at Early Sullivan Wright Gizer & McRae told TheWrap. That means no compensation under the often-lucrative deals.

Deals on hold

A suspension like the one Simien received puts the deal on hold, extending the term of the deal by however long the event goes on. But the clauses also often allow for outright cancellation after a certain period — something many insiders believe the studios see as a potential benefit of the strike, especially as they face pressure to cut costs and reduce their overall spending on streaming content.

Simien said he knew that a suspension was a possibility going into the strike. His company had just moved into its office after years of remote work during the pandemic. Going out for drinks to celebrate his birthday was the first time his team had gotten together in person, he said.

“The irony of that was kind of wild,” he said. “But it felt really devastating and debilitating.”

A Paramount TV Studios spokesperson declined to comment.

The timing of a force majeure clause’s use generally depends on the specific language of the agreement signed between studios and writers. The Alliance of Motion Picture and Television Producers, which is negotiating with the Writers Guild on behalf of the studios, declined to comment, as did the union. The guild’s website recommends that members consult with lawyers about specific contract language.

“Typically a force majeure clause within the context of the entertainment industry doesn’t go straight to termination. It usually is a suspension,” Shaliz Sadig Romano, co-managing partner of Romano Law, explained to TheWrap. “If it keeps going on for a really long period of time, that contract might then stipulate that the production company or studio can then terminate it.”

Romano said reasons for exercising force majeure may include “cutting the fat” for financial reasons, as well as key talent no longer being available to work on a particular show after a strike is resolved. Studios might also seek to use production companies abroad unaffected by the strike.

“Definitely the rumor on the street before the strike was that this is an opportunity for these companies to purge themselves of really expensive deals,” Simien said. “We were not a very expensive deal so we kind of took ourselves out of that category.”

Individuals with knowledge of the deals told TheWrap that the studios’ current suspension letters have primarily been sent to writers who are not currently working on projects.

Simien, though, said the wave of letters he and peers received felt more “blanket” compared to what happened at the outset of the 2007-2008 strike. In addition to Simien, “The Wire” creator David Simon revealed his deal was suspended by HBO after 25 years writing for the network. Simon found out while he was out on a picket line.

“We were literally just one week into the strike,” he said. “It just feels really cutthroat.”

He noted the financial pressures studios face from Wall Street as a likely factor that could mean suspensions becoming terminations: “I think it’s a very reasonable terror frankly that all of us are holding and just kind of bracing ourselves for.”

Simien said that he and other suspended writers are in communication with each other and watching the first of each month for updates.

“I think we’re all acting as if we’re probably all going to get terminated, so let’s just all prepare for that,” he added.

Little recourse for writers

In the event of a termination, the legal recourse for a writer is limited, experts said.

“Theoretically, a writer could sue claiming that certain producer services do not qualify as writing services and are separately compensated,” Sullivan said, noting that the “WGA has said all producer services by a member involve writing.” 

One example where a writer might be able to find legal wiggle room is if an agreement with a studio does not clearly define force majeure as a strike, Romano said.

A writer in that situation could argue that a “strike is a foreseeable event, you saw this coming and you don’t have a right to invoke this and therefore you had no right to terminate,” she said. But that depends on the particulars of contract language.

Hard decisions

Simien believes that creators of color are at a particular disadvantage in this strike, because they accepted lower pay to get their first shows made believing in the new opportunities promised by streaming.

“The minute that becomes profitable, we’re the first to get the ax,” he said. “We’re always the first to go.”

He emphasized that the strike is “extremely necessary because the things that we’re fighting for in the strike also affect people of color more.”

“It’s not the Writers Guild’s fault,” he said. “The reason the strike isn’t ending is because these companies that can afford it aren’t giving the strikers what we’re asking for.”

Simien got advice to either furlough or lay off his employees and cut every cost he could to ensure Culture Machine financially afloat. He ended up reducing his employees’ salaries instead: He couldn’t stomach the idea of layoffs.

“Something in me just said I don’t want to do it that way,” he said. “I pride myself on building teams out of communities of color and queer folks. I just felt like I would be doing everything that I made a production company to stop doing, which is kind of turning my back on young folks of color and queer folks.”

He worried that cutting off his employees’ income might force them to leave the industry altogether. “I didn’t want that to be the first resort,” he added.

Instead, he launched a fundraising campaign on GoFundMe on May 23, which has since surpassed its goal of raising $60,000 to get the company through the end of the summer. Any additional funds raised are being given to writers affected by the work stoppage.

Other creators with suspended deals are facing similar tough decisions, Simien said, but not all feel like they’re able to talk about it.

“There are folks who are in worse situations than I’m in,” he said. “And they don’t feel like they can really speak out about it because it doesn’t necessarily work with the image that ‘stars’ in Hollywood need to hold in order to keep their businesses afloat.”

While Simien’s highly anticipated “Haunted Mansion” film is set to release next month, he said he’s still in “triage mode” and already looking at contingency plans in the event of an extended strike.

“No one project, no matter how big it might seem on the outside, has ever really been that financial windfall to take care of house and start a business,” he said. “I need that movie to do well. I’ve worked really hard on it. I’m really proud of it. And at the same time, my support staff has been gutted. So how do you balance those two things at the same time? I’m not sure.”

Simien is hopeful that when the dust eventually settles, Hollywood’s business model for writers will be “fundamentally different” and changed for the better, because he has “more stories to tell.”

“I’m certainly on the lookout for the new model because the old model wasn’t great to begin with,” he said. “[Studios have] the money and the people and the entrenchment in the industry, but my will to survive is pretty strong.”

For all of TheWrap’s WGA strike coverage, click here.