After weeks of negotiations with the Alliance of Motion Picture and Television Producers, talks have broken down over a multitude of topics, including the proliferation of small high-intensity writers’ rooms called “mini-rooms,†the industry’s approach to AI, and the Minimum Basic Agreement for writers’ salaries, according to proposals from the WGA running down its requests and the AMPTP’s offers. This is the first writers strike since the 2007–8 TV season, which lasted 100 days, cost the L.A. economy $2.1 billion, and wrought Dr. Horrible’s Sing-Along Blog upon us. We talked to Jonathan Handel, a former entertainment lawyer turned journalist who wrote a book about the prior strike and has been chronicling this one through its potentiality, inevitability, and, now, existence.
How long have people in Hollywood been talking about a strike?
People have been talking about this for at least six months and probably to some degree longer. Production slowed significantly in anticipation of a likely strike. You don’t want to be in production and have your production interrupted in the middle of things by a walkout.
What leverage does the WGA have in negotiations with the AMPTP?
If a strike drags on, and there’s reason to believe it’ll be at least two months, they gain leverage because they will gain the ability to destroy the fall season on broadcast. Broadcast is still a significant source of revenue for the traditional media companies. Even though no one under the age of 40 watches just about anything on broadcast television, and even on catch-up digital platforms, there is still an audience there. The broadcast business has had double-digit declines for the last five, eight years. It’s just been a dreadful business. But those were declines from very lofty heights, and there’s still a lot of money there.
The other thing is that it’s not clear how much backlog content the streamers have. They worked to create a backlog, but exactly how many months each streamer could go without new content is an interesting question. It’s one I don’t have much visibility into and one it won’t be easy to get visibility into because it’s a very strategic question for the streamers.
The production of motion pictures is another leverage point, but that’s a longer-term thing because of the longer timeline for planning, pre-producing, and producing a movie.
But the companies nonetheless look ahead, and the studios don’t want a bare spot a year from now in the motion-picture release schedule. It’s especially distressing for them because of the decline in theatergoing. Box office is still down around 25 percent or perhaps a little more from where it was in 2019, pre-pandemic. Anyone who’s honest will acknowledge that there will never be a complete recovery in cinemagoing.
Hollywood is a union town. The percentage of unionized jobs in the general economy is about 6 percent. It’s tiny, especially outside of public employment. Hollywood is very different. If you want a good script, it is going to come from a Writers Guild member. They just have that level of coverage of the business.
Can studios still produce films they have a full script for? Are there TV shows that have just finished writing and will still be produced?Â
If they’ve bought the script or have an option on it, they can exercise that. They can produce the script, but there won’t be a writer standing by to do production rewrites. When the star says, “Not only are these lines not working, this whole scene isn’t working. We need to rewrite,†and the director says, “Get the writer,†and the producer says, “I think you forgot the writer’s busy picketing in front of Disney today,†that’s not a good look. That doesn’t work. Maybe some people will take that risk, and it would depend in part on just how satisfied they are. Are they 110 percent satisfied with the script as it stands? But a lot of production won’t happen for the duration of the strike.
What is the order of shows going dark?Â
Late-night has already said it’s going dark. Next would be SNL and Bill Maher and so on.
Next would be network, then streaming?
Before network shows, it would be soap operas. The strike 15 years ago was in the middle of the season, but this is the end of the network season, so we won’t see network shows going dark immediately. But if the strike lasts long enough, it’ll delay the start of the fall season. Normally, network writers’ rooms for September would begin staffing now and would be fully staffed in June or July because it is a September-to-May business.
By the way, it’s no coincidence that HBO Max and Discovery Plus are merging to form Max three weeks from now. Look at what Warner Bros. Discovery gets to say to its streaming subscribers: “There may be a strike on, but you didn’t lose content. You gained content with no increase in your subscription price.†Of course, that content is reality, and the Discovery/Max subscribers may be more open to reality than the HBO diehards, but it at least gives them a narrative.
What other factors will contribute to the duration of this strike?Â
The companies have an incentive to allow this strike to go on for at least eight weeks unless it gets settled in a few days, which I don’t see happening. The reason for that relates to another set of contracts, which are the contracts between studios and the top showrunners on the other so-called overall deals. The overall deals were made during a period of enormous, irrational exuberance and spending at any cost. You’ve got overall deals that range from the millions of dollars to the tens of millions to the hundreds of millions of dollars. Look at Shonda Rhimes and Greg Berlanti. And some of those deals have inevitably been unprofitable. Others may be on the bubble as to whether they’re profitable or not.
All these deals, speaking generally, at least contain a force majeure clause. These clauses say that if a massive event such as an earthquake, civil unrest, or a labor strike shuts down the business for at least six to eight weeks, depending upon what duration was negotiated, then the studio or streamer can terminate the overall deal altogether. You’re going to see a lot of deals terminated. You’ll probably see other deals renegotiated under threat of termination. They might soften the blow by saying, “We’ll extend the deal, and if you do come up with shows that we like and produce hits, we’ll pay you even more than we were going to under the existing deal.†But in return, the guaranteed amount in the overall deal would be reduced. Between clean renegotiations and terminations, the companies would have a new narrative for Wall Street, which is how much money they saved. And during the duration of the strike, when they’re not producing, they save money as well. In the short term, they have a quarter that’s going to look good because of the strike.
I’m curious about how concerns around AI are affecting negotiations. According to the WGA, the AMPTP rejected its proposal to regulate AI use on projects, instead suggesting they meet annually to “discuss advancements in technology.†How does prospective technology fit into this puzzle?
It’s not the biggest issue, but it is figuring into the conversation more than one might think. When home video was introduced, the studios successfully argued for a formula for residuals that was very disadvantageous to writers, actors, and directors. The argument they made was that it was a nascent technology, saying, “It’s just emerging. We don’t know what the economics are going to look like, and it’s very expensive to make these videotapes.†The cost structure was high, but as manufacturing costs declined with videotape and then dropped precipitously with the introduction of disc technology, the formulas were never adjusted.
The writers feel that when it comes to new technology, Fool me once, shame on you; fool me twice, shame on me. That was part of the ethos in 2007 when the studios at one point proposed a three-year study of new media rather than any actual contractual provisions. And now the AMPTP is proposing the same sort of study approach to AI. Well, it’s true we don’t know. We don’t know when and in what iteration ChatGPT will actually be able to do useful screenwriting work. I haven’t heard reports in this business, but people are getting use of it in the political business, marketing, and fundraising. But the Writers Guild was burned very severely by the studio approach to an emerging technology back in the ’80s. They don’t want to make the same mistake twice.
How does the increasingly globalized nature of the entertainment industry affect the strike?
Scripts can be easily emailed. Footage can be easily transmitted. If you want to produce overseas, you have to move people and sometimes equipment, but the end product is something that is transmissible electronically. That makes the industry even more susceptible to globalization than other industries. Now, cross-cutting against that is the fact that a lot of people look for their content to be local and reflect American assumptions and habits and slang. We’re not going to see Netflix willingly say, “All our new content is going to be produced overseas now.†But overseas content is definitely a part of the mix, and if the strike lasts long enough, it will drive an increase in foreign content. And when the strike ends, the numbers won’t settle back to what they were beforehand. They’ll be somewhere in between. Once you’ve trained a company and its employees and audiences on how to do something differently and on how to have different viewing habits, those habits don’t disappear once the strike ends. An existing trend toward globalization of content will probably be accelerated.
It means more competition for the writers. It means that they’re in competition internationally and that the bonds the Writers Guild has built with foreign writers’ guilds through an organization called the International Affiliation of Writers Guilds are absolutely critical because you want to have as many foreign writers as possible supporting the strike. Not just with words of affirmation but also by walking away from potential jobs. That’s a difficult ask, particularly because in other countries it’s an even harder career and a smaller cohort of people who are able to do it professionally than what we have in this country.
There’s a popular idea that the 2007–8 writers strike really helped out reality TV, and I’m wondering what kind of shows you think could prosper this time?
The 1988 and 2007–8 strikes fueled the rise of reality television: ’88 was what brought that genre initially to prominence with shows like Cops; the 2007–8 strike put reality on overdrive. As with previous strikes, during this one we will see reality, news, and sports stepping up to fill any holes in the schedule or any lack of new content, even on streamers.
We also will see a somewhat newer player, which is foreign-produced content. Netflix in particular has pioneered something that people in the past thought would never happen, which is getting Americans other than people who watch PBS or go to art-house movies to watch foreign content. Foreign content was a niche business once upon a time, but not since Squid Game and Berlin Babylon. Now, the Writers’ Guild of Great Britain just issued an advisory to its members not to work on scripts for the American companies that are the subject of the strike. It’s not clear whether that’s binding or not, but there certainly will be a lot of pressure within Great Britain to stand in solidarity with the American writers. This is an internationalized and increasingly global business, not just in terms of distribution but also in terms of the creation of products.
How will the financial status of streamers — which, according to most industry insiders, is trending downward — affect negotiations?
That’s a very key factor. Up until March of last year, Wall Street was content to look for subscriber growth in streaming platforms and to reward companies handsomely in terms of share price for meeting growth targets. But when Netflix lost 1.3 million subscribers, that was a shock to the system. It scared Wall Street, and the tune has changed. Wall Street is looking for assurance that there are or will soon be profits, which is a very hard thing when you’re spending billions of dollars building out these platforms. So you see the media companies engaging in layoffs, you see them engaging in cost cutting, although at the same time, many of them are paying their top executives, their CEOs, enormous salaries. The Writers Guild’s response to all this is: If you’re going to spend billions of dollars building out global platforms based on content we create, we need to get our fair share of that, and we need to ensure that writing is a sustainable career.
The WGA released a document outlining its proposals and the AMPTP’s counterproposals. In that, it seemed as if the AMPTP was rejecting proposals involving mini-rooms. What is the importance of the mini-room to studios, and are they seeing the WGA’s proposals as negotiable?
First, there’s the caveat that the document is generated by one side of the table. We don’t have confirmation from the AMPTP. Taking that as accurate for the sake of discussion, mini-rooms have become the de facto new normal for streamers in the way a hefty percentage of streaming shows are being developed and written. It’s a development of the last five years or so. We almost saw a strike in 2017, and mini-rooms were not really in play then. We would’ve seen a strike in 2020 were it not for the fact that just as the writers were starting negotiations, COVID emerged, and you can’t walk out of jobs that are shutting down. A lot of what’s going on now is viewed by Writers Guild leadership as taking care of unfinished business from three years ago.
The Guild wants to reverse the trend toward mini-rooms, and the objection is severalfold. One is that fewer writers are staffed. The second is that those writers don’t work for as long as writers do in more conventional writing rooms. The third is that the pay structure tends to be lower. The fourth is that many mini-rooms close before the series even begins production. The problem with that from the writers’ perspective is that it means younger staff writers don’t get the experience of doing production rewrites and being involved in postproduction and editing. That hampers their ability to climb the career ladder because those skill sets are required for higher levels of seniority in the TV writing business and, ultimately, to become your own showrunner.
How can TV and film studios pay for these WGA proposals? Could the budget come from something like CEO salaries?
There’d be a lot of pressure to not affect CEO salaries. We live in a winner-take-all kind of capitalism where CEOs have a very intimate and collegial relationship with their boards and expect to be paid huge sums of money. It’s hard to see that changing. We’re not going to see an anti-capitalist revolution. The answer is that it comes out of the profits. And the question is how will Wall Street react? Again, it’s not all or nothing. Can they afford a dollar more? Sure. Can they afford a hundred dollars more? No.
The famous figure is that the 2007–8 strike cost $2.1 billion.
It was a 100-day strike, which was about $200 million a day. That’s the cost of the Los Angeles economy. Adjusted for inflation, that would be $285 million a day now. However, a certain amount of production has moved from L.A. to Atlanta. So some of the pain will be shared with our southern friends, and of course they’ll be paying in New York as well because it was and is a production center. But the L.A. economy will take a significant hit.
Does the reorganization of the TV economy via streaming change anything about that figure?
That figure doesn’t really have anything to do with the different ways of doing business. It has to do with the fact that writers, actors, directors, crews, and suppliers, like prop houses, are furloughing employees. The first thing the furloughed employees do when they’re not working is apply for unemployment. The second thing is to reduce discretionary spending as much as possible. Those are the effects we’re talking about. So the fact that the business model of the companies is different I don’t think changes the fact that people are going to be unemployed.
So you think we could be looking at a similar-size loss?
Given the fact that some L.A. production moved to Atlanta, we have three production centers versus two production centers — L.A. and New York — 15 years ago. But if we’re talking nationally, I do think that’s right.
Given that we have that list of the WGA’s proposals and the AMPTP’s counteroffers, where do you see potential spaces of compromise between the two groups?Â
Eventually, there will be a deal. So by definition, there will be compromises and negotiations, not a shopping spree. You don’t get everything you want or even everything you feel you deserve. Some of the issues involve numbers, like how many writers would be staffed at a minimum in a room depending on the number of episodes the season is going to contain. So if the studios and streamers are suggesting one number, then the writers are suggesting another number. There’s potentially a compromise in between those two numbers.
But right now, the numbers seem pretty far apart.
Yeah, they do. What the strike reminds us is that negotiations are ultimately an exercise in raw power. The most powerful tool labor has is to withhold its labor. The difficulty is that unlike a hammer with a cushion grip, this is more like a knife you have to hold by the blade. It hurts the workers as much as, or perhaps even more than, it hurts the studios. But they feel that they have been pushed to the wall and that they don’t have any alternative.
When do talks resume?
There are no talks scheduled. The AMPTP broke off talks, stating that the Guild was being unreasonable and unyielding. The Guild says the companies are being unreasonable. That’s not a formula for talks resuming. The talks won’t resume until both parties are willing to talk again. There will be back-channel attempts to resume talks if they aren’t already going on. At some point, a federal mediator will be deployed. That has never proved to be effective in the Hollywood strikes, at least in recent years. Right now, the writers are in fight mode, not talk mode.
This interview has been edited and condensed for clarity.
More on the 2023 writers strike
- The Emmys Aren’t Going Anywhere
- How to Watch the 2023 Emmys in 2024
- All the Shows Returning After the Joint Hollywood Strike