It's Day 10 of the Writers Guild of America strike, and we’re starting to get a better picture of why TV and film studios and streamers don’t want to make what they would consider an overly generous contract to screenwriters.
The Alliance of Motion Picture and Television Producers, the negotiating entity for studios and streamers, have said from the beginning of the WGA talks that its members have spent billions on new platforms and they consequently need to preserve a return on that investment. The Walt Disney Co., in its quarterly earnings report on Wednesday, illustrated that starkly:
The WGA strike was launched after Disney’s fiscal quarter closed, so its potential impact on earnings is unclear.
“We haven't really quantified what that would be because we don't know how long it's going to last,” Christine McCarthy, Disney’s chief financial officer, told Wall Street analysts.
But in the week and a half after the strike was called, Disney’s Marvel Entertainment unit had to shut down pre-production on a Blade movie, and stopped production on the series Daredevil: Born Again.
Members of the WGA, which says average WGA pay has actually dropped 14% over the last five years, were not immediately moved by Disney’s finances. Thanks to its theme parks, Disney remains hugely profitable, and reported net quarterly income of $1.49 billion.
Hollywood producers released a statement on May 4 that addressed specific points of the WGA's concerns. Among the issues addressed by the Alliance of Motion Picture and Television Producers were:
In a statement released the night before the strike, the WGA said:
"Over the course of the negotiation, we explained how the companies' business practices have slashed our compensation and residuals and undermined our working conditions. Our chief negotiator, as well as writers on the committee, made clear to the studios’ labor representatives that we are determined to achieve a new contract with fair pay that reflects the value of our contribution to company success and includes protections to ensure that writing survives as a sustainable profession."
The WGA says that most of its nearly 12,000 members are making less than they once did, and that after factoring for inflation, average WGA pay has actually dropped 14% over the last five years.
The union says about half of WGA members are earning scale — the bare minimum wages stipulated by the contract with the AMPTP. Ten years ago, it was only a third.
Executives at studios and streamers maintain that they are still recovering from pandemic losses and have spent billions of dollars creating and buying content for new streaming platforms, some of which are far from profitable.
For Hollywood executives, the stakes are high: if the AMPTP deal for writers increases pay and residual payments, their profit margins could shrink. Furthermore, other Hollywood unions would likely use any WGA gains as the template for their demands; contracts for the Screen Actors Guild and the Directors Guild of America both expire in the coming weeks.
John Horn, who covers arts and entertainment, has been following negotiations closely. Josie Huang talked to picketers and local businesses affected by the strike. In addition, our AirTalk team has featured the strike in on-air discussions on LAist 89.3 and LAist coverage.
Our podcasts HTLA and Retake have also talked to writers and others affected by the strike.
This is a developing story. We fact check everything and rely only on information from credible sources (think fire, police, government officials and reporters on the ground). Sometimes, however, we make mistakes and/or initial reports turn out to be wrong. In all cases, we strive to bring you the most accurate information in real time and will update this story as new information becomes available.
