Negotiations are back on between the Writers Guild of America and the Alliance of Motion Picture and Television Producers, but the two sides are running awfully close against an upcoming deadline.
The two groups have until May 1 to come to a new contract agreement, but the WGA has already announced it will conduct a strike authorization vote this Friday. So even as the two sides resume their negotiations, it's unclear if there's enough time to find an agreement that appeals to both the WGA and the studios.
Joining John Horn to unpack this complicated issue is Jonathan Handel. He's an entertainment and technology lawyer at TroyGould, as well as a contributing editor at The Hollywood Reporter.
What's the latest for the WGA and the studio alliance?
They are sitting down for five days this week, and afterwards there's going to be a strike authorization vote, so things are moving potentially in that direction. My research has determined that the writers are asking for demands that are three times as much as what the studios are likely to agree with.
So where are the Writers Guild and the Alliance of Motion Picture and Television Producers farthest apart, and where are they maybe closest together?
They're closest together in that the Writers Guild wants the same basic wage increases — three percent a year, essentially — that the Directors Guild got in their deal several months ago. And they want enhancements in the new media residuals — Netflix and Hulu and things like that — that again the Directors Guild got.
Those are probably on the table from the studios at this point, but the trouble is that the Writers Guild wants a lot more. Let's make sure that their side of the story is out here: their feeling is that the studios have made an operating profit of $51 billion across a handful of companies, so what they want — $180 million a year for each of the next three years — is less than a third of one percent of that.
They have reasons why they want the things they want, given what's happening with incomes and health plans and so forth. But the trouble is that the studios are most likely at a number that's around $180 million over the next three years, not $180 million per year for three years.
The current WGA contract expires at the beginning of May, so less than a month from now. What is the Guild saying about what might happen if there's no deal by then? Could writers keep working without a contract as negotiations continue, or is that a drop-dead date?
They could legally, but the WGA leaders are saying that it'll be a drop-dead date. If there's no contract in place May 1, they'll be on strike on May 2.
This is a hypothetical, but if there is a strike, what are the TV networks, streaming sites and movie studios doing now to prepare for that? What are the first places that would feel the effects of a strike?
Well, it's not clear exactly what they're doing to prepare. Unlike 10 years ago, the Writers Guild didn't telegraph terribly far in advance that this move was potentially coming. In terms of who would see it first, probably the same order as that strike 10 years ago — the late-night shows, which are written on a day-to-day basis, then the soap operas and sitcoms.
What you start to get to is the question of whether the fall season will be impaired or delayed or otherwise affected, because the writing and development for the fall broadcast season starts in relatively early summer.
So if a strike goes past roughly mid-June or so, you start to look at the possibility of affecting that season, and that takes money out of the mouths of show-runners — the writer-producers who head up these shows. Those show-runners are the ones who ended the 1988 strike, and my understanding from sources is that they played a key role in ending the strike 10 years ago as well.
As is often the case in any labor negotiation, there's a lot of threats of walking out or walking away from the bargaining table. But given where the Guild and the Alliance are now, would you say you're more optimistic or more pessimistic than you were maybe a week or so ago about the possibility of a strike?
It really felt a little bit like election night, quite frankly — my needle was on one side of the equation a few weeks ago, and it's sort of jiggered its way over to the other side. I mean, you're talking about a $350 million gap between the two sides, so I don't think they're going to bridge that gap this week.
And next week you'll see a strike authorization vote and so forth, and that vote ends on the 24th, just a week or less before May 1. That's enough time for a few more days of negotiation, but I think that will probably produce a last-offer from the studios that the writers will turn their backs on. I think we're probably looking at a strike.