Hollywood’s Latest Cliffhanger: As Contract Talks Begin Between Writers and Studios, Can A Strike Be Averted?

Screenwriters are pretty good at creating feel-good Hollywood endings. The question now is whether they can do the same in their current contract talks.

On Monday, negotiators from the Writers Guild of America sat down with the Alliance of Motion Picture and Television Producers to try to craft a new collective bargaining agreement.

The current WGA pact expires in May, and if a deal can’t be reached by then, the guild’s members very likely could go on strike. While a screenwriters work stoppage wouldn’t have the same instant impact as a strike by actors or directors, film and TV production would quickly wind down if the WGA walked.

What’s at stake

Writers and studio executives not directly involved in the contract talks have told me the two sides will need to find common ground on two issues on which they are likely far apart: basic compensation, and additional residual payments that have been upended by the surge in streaming.

WGA executives argue that most of the union's members are making less than they once did. The union says that after factoring in inflation, WGA pay has dropped 14% over the last five years. Part of the problem is that while legacy TV networks — ABC, CBS and NBC — would order about two dozen episodes of a series, streamers often commission fewer than half as many episodes.

Ten years ago, the WGA says, about one-third of its members were earning the bare minimum wages stipulated by its contract with the AMPTP. Today, that percentage has grown to about half, according to the union.

Studio cuts

Some AMPTP members also aren’t flourishing as they once did. Warner Bros. Discovery is slashing jobs, movies and series as it deals with $50 billion in debt, and the Walt Disney Co. is cutting more than $5 billion in spending, including firing some 7,000 employees.

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“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 AMPTP said in a statement. "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.”

Broadcast vs streaming

Yet the makeup of the AMPTP itself could be one of the biggest obstacles to reaching an agreement.

Member companies like Netflix, Apple and Amazon care little about broadcast television residuals or theatrical movie wages. A network like CBS or a studio like Sony (which has no streaming platform), on the other hand, don’t care that much when the negotiations turn to ancillary streaming payments.

To complicate matters further, some AMPTP members, like Disney, have a stake in so many businesses — theatrical, broadcast television, streaming, cable and pay TV — that they could be slow to concede on any deal point.

The WGA is also worried about the rise of artificial intelligence writing tools that could threaten the livelihoods of human storytellers. But the way things stand, it might take a robot to create a contract that satisfies everyone.

What the union is asking for:

• • Increase minimum compensation significantly to address the devaluation of writing in all areas of television, new media and features
    
    
  • Standardize compensation and residual terms for features whether released theatrically or on streaming
    
    
  • Address the abuses of mini-rooms
    
    
  • Ensure appropriate television series writing compensation throughout entire process of pre-production, production and post-production
    
    
  • Expand span protections to cover all television writers
    
    
  • Apply MBA minimums to comedy-variety programs made for new media
    
    
  • Increase residuals for under-compensated reuse markets
    
    
  • Restrict uncompensated use of excerpts
    
    
  • Increase contributions to Pension Plan and Health Fund
    
    
  • For feature contracts in which compensation falls below a specified threshold, require weekly payment of compensation and a minimum of two steps
    
    
  • Strengthen regulation of options and exclusivity in television writer employment contracts
    
    
  • Regulate use of material produced using artificial intelligence or similar technologies
    
    
  • Enact measures to combat discrimination and harassment and to promote pay equity
    
    
  • Revise and expand all arbitrator lists