At the Television Critics Assn. gathering in Pasadena last weekend, NBC Entertainment Chairman Paul Telegdy reflected on a subject many of his peers wished to avoid: the prospect of reliving another writers’ strike.
“So far we’ve been told that we should be cautious, as always, but that a strike is something we will always be prepared for,” Telegdy told journalists at the Langham Huntingon hotel. “It’s a different world...I just need to make sure there are things people want to watch and we’ve got plans that could sustain us.”
More than a decade after writers shut down Hollywood, studios and networks are once again preparing for another potential walkout that could disrupt Southern California’s highest profile industry. But the circumstances have radically changed since the last strike, which began in fall of 2007 and lasted 100 days.
Then, Hollywood was just entering a digital revolution that would upend old distribution models, with Netflix just starting its pivot from DVD to the internet and Hulu going live as the strike ended. Today, the streaming revolution has accelerated to a degree few could have imagined then, creating a new golden era in TV production.
Much more is at stake for both the studios, which are in the throes of launching new direct-to-consumer services such as NBC’s Peacock and AT&T’s HBO Max., and the writers, who could miss out on a production surge. HBO Max is due to launch the same month the Writers Guild of America contract ends with the studios expires May 1. NBC plans to roll out Peacock nationally by July 15.
“The bottom line is, we are in a really different context than we were in 2007 and 2008,” said Ivy Kagan Bierman, an L.A.-based entertainment lawyer who has represented production companies on labor issues. “The emergence of Netflix and similar platforms has really changed the landscape.”
Studios, production companies and guild members are all eager to avoid a sequel to the last major disruption that cost the state an estimated 37,700 jobs and $2.1 billion in lost output from late 2007 through the end of 2008, according to a 2008 Milken Institute report.
Even L.A. Mayor Eric Garcetti is worried about the potential effect of a work stoppage on the city.
“It’s troubling because this doesn’t just hurt the industry, it hurts main street,” Garcetti said in an interview to promote a new initiative to increase Latino employment in Hollywood. “It hurts the dry cleaner and the bakery and those dollars that are recycled here. I hope that as models change, that people can also figure out a way to keep that production here because fighting for something better, the last thing we want to see is for that production to leave altogether.”
The continued spread of filming to Georgia, New York and other film hubs could lessen the economic hit of a strike on L.A., but the “impact on individuals could be just as bad, especially if there is a protracted strike, because of the higher cost of living,” said Kevin Klowden, executive director of the Milken Institute’s Center for Regional Economics and California Center.
At TCA last week, FX Networks Chairman John Landgraf described the landscape as a “mad race to keep the massive conveyor belt of content going.” The industry’s networks and streaming services together produced 532 scripted dramas, comedies and limited series in 2019, doubling the number of scripted shows produced a decade ago.
The problem is, the content bumper crop hasn’t benefited writers the way it should, according to the WGA. Employment for film writers has reached levels not seen for 20 years, with about 1,000 screenwriters reporting more than $100 million in earnings each quarter (up from about 700 writers in prior years) and nearly 5,000 members working in TV for the last five years. Nonetheless, “too many members” are working at, or close to, minimum, the WGA told members in December.
As streaming takes over the traditional broadcast network TV model, studios are commissioning shorter seasons and writers also are losing out on revenue from what would have been syndication or reselling of their shows.
“We are in a completely new world of how people consume entertainment,” WGA West President David Goodman said in an interview. “There is intense competition between the companies to launch their streaming services and hold on to their libraries. The question for the Writers Guild is, how are our members being compensated? Are we keeping up with this enormous growth and how do we make sure to protect our members in this new business model?”
But Goodman said the whirlwind of speculation about a strike was “part of a game to try to put us on our heels.”
He dismissed the widespread perception that the union’s months-long fight with major talent agencies over industry practices foreshadows a bigger labor fight. He noted that the union voted to strike only once out of the last four rounds of bargaining.
“We will identify the issues. ... The members will decide how hard they want to fight for it,” Goodman said. Union leaders have conveyed that message in a series of routine meetings in writers’ rooms across Hollywood.
At the end of January, the WGA leadership will disclose to members a so-called “pattern of demands,” the key issues that will frame upcoming negotiations with the Alliance of Motion Picture and Television Producers, which represents major studios such as Walt Disney and Warner Bros. but also Amazon and Apple. The AMPTP declined to comment.
The uncertain outcome has many writers on edge.
“Everybody is very stressed about it,” said Dan Fogelman, creator of the hit NBC show “This Is Us,” at the Pasadena conference. “People are still making money, so there’s a lot to figure out between guilds and studios [about] how that money is going to be spread fairly around.”
Even the industry’s insider newsletter, The Ankler, launched an index called “Strike-O-Meter 2020,” though for now it had the probability of a strike at just 20%.
Several industry executives declined to publicly discuss strike plans but privately said they were taking contingency measures, including ordering extra episodes of existing shows or potentially holding back programs for later in the year.
One executive described creating a schedule, akin to a football playbook, with various alternative programming plans depending on the length of a strike, whether it be one week or several weeks.
“There are companies that are doing their strike contingency plans and looking at what they have in development and production,” said Kagan Bierman. “They’re appropriately and strategically analyzing their slates so that a strike doesn’t cripple the entertainment business. It is not simply about stockpiling scripts, which often has a negative connotation. It is also about whether to move forward with projects in development and what type of programming to focus on developing and producing.”
The streaming revolution has brought new tech giants into the Hollywood market, such as Amazon and Apple. They are hungry for new content but don’t have a history of dealing with unions.
Then there’s Netflix, which is not a member of the producers alliance. The Los Gatos company has already started forging its own labor deals, including a landmark contract with SAG-AFTRA this summer, that could give it a competitive advantage in the event of a work stoppage
The ability to negotiate a separate deal with Netflix also gives WGA and other talent unions some leverage with the studios. Contracts for SAG-AFTRA and the Directors Guild of America expire June 30.
Another change over the past decade is the consolidation among legacy media companies, with the formation of AT&T-Warner Media, Viacom-CBS, Disney-Fox and Comcast-NBC. These corporate behemoths may take a harder line with unions and have more resources to fight the WGA and other guilds. At the same time, they need talent more than ever to feed their new streaming pipelines in order to compete with Netflix.
“They both need each other in the end, but when there is some consolidation it can lead to a little more leverage,” said David Smith, a professor of economics at the Pepperdine Graziadio Business School. “There is almost a frenzy in terms of production and the need for writers during these times, so that dynamic is at play.”
Said Fogelman: “My hope is that very smart people who don’t want a strike can get together and come up with an arrangement that makes everybody happy.”