On September 24, the Writers Guild of America members received a remarkable email: “Dear Members. We have received a tentative agreement on a new 2023 MBA, which is to say an agreement in principle on all deal points, subject to drafting final contract language.†After 146 days on strike, a tentative agreement with the AMPTP has been reached. The details of a new contract have not yet been released, and even after they are, it still will need to be ratified. Still, it’s the first time in almost six months that the members of the WGA have had a chance to truly celebrate. To get a better understanding of what the contract means and what comes next, for the WGA and for the Screen Actors Guild, who are still on strike, we talked to journalist and entertainment lawyer Jonathan Handel and asked him all our burning questions.
Why did the WGA deal get done now?
The fact that this deal didn’t get done until the CEOs were in person and in the room is no surprise to any of us. Frankly, it’s a disgrace that they weren’t in the room 150 days ago. We did not need to go through what are now two devastating strikes and the human cost of that — the economic cost was estimated a couple months ago at $5 billion.
What do we know so far about the agreement?
Basic wages was an easy one. They were asking for 6, the studios were offering 5, which is what they gave the Directors Guild of America. Presumably they compromised.
Second: staffing in mini rooms. Our understanding is that the Writers Guild got something on that, which is a major win because it’s a very difficult issue when you’ve got shorter seasons, because fewer writers are needed. How do you preserve the sustainability of the profession with fewer jobs available? Now there is some staffing-level protection. They initially wanted eight writers for a ten-episode series, which is kind of preposterous, but you always ask for more than you expect to get. It appears to have proved the right strategy to make a very high ask and end up somewhere else.
With streaming residuals, our understanding is that they got increases for the top shows. Exactly how many of the hits and how that’s measured is not known. Is it the top ten? Is it the top 10 percent? Is it the top 15 percent on a platform? But for some definition of the top shows, our understanding is that you get paid an extra percentage of the existing residual. If your existing residual was going to be $15,000 for a writer in the first year, even the writer of a flop will get that. The writer of an episode on a hit, it would appear, will get the base residual that everyone gets, plus an additional percentage, but we don’t know the details.
Is that why so many streaming services have announced that they will be publicly sharing what their “top shows†are?
The causality is a little deeper than that. The unions and talent representatives representing high-end talent have been pressuring the platforms consistently over the last several years to be more transparent. The introduction and growth of advertising tiers has required some additional transparency because advertisers require some sense of what they’re buying against.
Now a big question is whether this mechanism that the Writers Guild apparently got would be satisfactory to the SAG-AFTRA. The SAG-AFTRA wanted to move past the producer’s revenues to go to the platform level, and they wanted a pool. They were asking for 2 percent of the revenue of the gross product. They’re obviously not going to get 2 percent, but they would compromise on something less. It’s connected to the platform’s robustness, not connected to the residual. That is basically an arbitrary amount in the contract, although platforms with more viewers pay a higher amount. The tough question for SAG-AFTRA is going to be: How much leverage do we have left to push our desired mechanism that gets us closer to the source of the money? And is the dollar amount large enough?
On AI, our understanding is that they got a variety of guardrails, but that one key issue was left ultimately unaddressed. Each party reserved its position with the issue of using writer scripts as training materials for large language models (LLM). A LLM that writes screenplays is going to want to be trained on both the general corpus of whatever it can get its little grubby hands on, as well as specifics like the stylistic conventions, the turns of phrase, the way people write stage direction, and the way different dialogue works for different characters. It is our understanding that the issue of consent and/or compensation for having a writer’s screenplay as part of the training set is something that they were not able to reach agreement on.
Is that the same for SAG?
AI affects them differently. There are two kinds of replicas of actors. One is a replica of an actual actor. The other is a completely synthetic thespian replacing what otherwise would’ve been a hired actor.
The other big issue is the issue of basic wage increases. The writers wanted six percent, but the studios were offering five last we knew. SAG wanted 15, and they’ve gone down to 11. Two months ago, the studios were offering five. The basic wage increases may end up being a big stumbling block because SAG is not going to do a deal at 6 percent. SAG has planted a flag in the ground, but the writers did not push for a catch up based on that inflation and neither did the directors. Even at 5 percent, the basic wage increase is 85 percent of the cost of the offer, and 11 percent is as much as 90 to 91 percent of the cost of the offer. The studios said that their last offer to SAG was worth a billion dollars.
What were the major points of concession by the union?
It’s limited information, but it appears that both sides gave on the staffing issue. It seems that the union strategically did not push for an inflationary basic wage adjustment on residuals. On AI, it sounds like the studios conceded more than the union did. There’s a real fear that nonunion competitors will do whatever they want, and that’s something that the state legislature to some extent. Congress is attempting to get its arms around. You see multiple actors in the regulatory landscape, and unions have to be thought of as nongovernmental regulatory agencies.
We’ve previously discussed how the WGA has been left out to dry on technological change — unable to change the contracts that were written before the technology was developed. Are they protected in regards to AI?
There’s no way to know without seeing the language. It does sound like they had to partially concede on training of LLMs. Both sides apparently gave into language that says, our position is X, your position is Y. We each reserve our positions. Whether that horse can be kept tethered as time goes on? Who knows? It’s important to recognize that copyright law doesn’t solve that problem. First of all, we don’t know if using other people’s copyrighted property to train an LLM is a violation of copyright or not. Those cases are in early stages in the courts, and may be decided by the Supreme Court. But, regardless of the decision, it’s unlikely that would solve the problem, because the studios own the copyrights of the scripts that they buy. There’ll be a lot of pressure not to come to the conclusion that using someone else’s material is a copyright violation.
For every movie that the studios have released, there are 10 or 20 or 100 that they own that never got shot, but were good enough to purchase before they decided not to make the movie. And that makes them good enough to train on. The major companies have enormous reservoirs. Amazon bought MGM, so MGM probably has a lot of scripts in its library. Apple and Netflix may have less access to material, but Disney has both Disney and Fox materials.
Do you get a sense that there is currently a preparation being made by the industry for when they can get back to normalcy?
SAG has said that it’s already willing and able to negotiate. The studios were talking to the writers first, and even after things went a bit south in the middle of August, they kept their focus on the writers rather than pivoting. But now they’re going to pivot. I expect that this week there will be an announcement that the studios and actors will be talking next week. It could take two to three weeks under best circumstances to negotiate a SAG-AFTRA deal. That takes you to the third week of October, plus another month before the deal gets ratified will take you to Thanksgiving.
The Writers Guild has said that although writers normally wouldn’t be able to go back to work until their deal is ratified, they are going to seek to lift the strike so that writers can get writing immediately. There’ll be pressure on SAG to do that as well once they reach a deal by the end of October. People already are starting to talk about scheduling and availability, but you just can’t do that with any certitude until you know that there’s a deal.
Imagine 1,500 productions suddenly given the okay and all competing for overlapping resources at the same time. It becomes chaos. We will see production by February or March 2024, but it’s going to be a lot of catfighting over access.
Award-season press is not as difficult to coordinate as full production on a film, but do you think award season will be affected by the strike?
Yeah. The Emmys are in January and some of the contending movies didn’t have their stars available to promote them, so you’ll have a lot of competing junkets. There’ll be a lot of competition for the publicists, who will have TV and movie clients at the same time.
When will we find out more details about the contract? Given that there’s a lot we don’t know yet about, when will we find that information?
Over the next few days there will probably be continued leaks of details. After the Board of the Writers West and the Council of the Writers East vote on Tuesday, they will prepare. The members then have several weeks to vote.
Do you think this set a tone for future labor discussion in Hollywood?
We’re only looking eight months ahead. There are three big contracts coming up, with IATSE, the Teamsters, and the SAG-AFTRA Network Television Code (Net Code), which covers talk and reality. The big ticket issues are going to be basic wage increases and AI. With basic wage increases, whatever SAG gets, that’s going to set pattern for what will be demanded not only by SAG Net Code next year, but also by IATSE and the teamsters. The studios are going to be very resistant to giving SAG the sort of numbers that it wants, because of the pattern bargaining effect. You’re talking about four contracts. They’re going to be influenced by it. And then for SAG, you’re talking two other contracts, because you get cross sector signaling. If SAG accepts 9 percent from the studios, then they’re not going to get more than 9 percent from the video-game companies.
AI affects the SAG Net Code in the same way that it affects the current SAG agreement — the production designers, the editors, the sound editors, the DPs, and probably even costume design, are all affected by generative AI. Teamsters are not at all affected by generative AI, but they’re affected by a different form of AI, which is autonomous vehicles. They don’t want self-driving trucks to put the Teamsters out of work.
Then, probably this week, we are going to see SAG go out against the video-game companies. Those companies are even more afraid of agreeing to restrictions on AI because they’re much more technological even than the studios and streamers, and you can easily imagine a nonunion video-game company using AI to make synthetic avatars and rising up as a potent competitor to one of the incumbent ten companies that SAG is negotiating with. You’ve got this perfect storm of contract after contract with all these intertwined issues of inflation and technological displacement.
This interview has been edited and condensed for clarity.
More on the 2023 writers strike
- Oopsy! Deadpool Might Have Scabbed.
- The 2023 Hollywood Strike for Dummies
- WGA Ratifies New Contract With AMPTP