Strike Watch: Would WGA Build Coalition With DGA & SAG-AFTRA In Upcoming Contract Negotiations?

On the party circuit during Emmy weekend, one topic inevitably found its way into every conversation, the possibility of a writers strike. Even back in September, the consensus was that there likely will be a strike.

The sentiment has been only growing stronger in the months since, amid deteriorating economic environment marked by high inflation and a looming recession. The WGA elected board members on platforms focused on the upcoming contract talks and appointed a negotiating committee, which includes several members of the committee that led the guild campaign against the talent agencies over packaging to its successful end.

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Given how difficult and deeply rooted the issues at stake for writers are, including increasing minimum pay, span protection and streaming residuals and curbing of mini-rooms, a strike does appear likely when the current contract expires May 1, 2023. That outcome seems especially probable in light of the fact that the WGA has traditionally been the Hollywood union most willing to go to the picket lines in order to get what they want. There have been six writers strikes to date.

“I think that there is a high probability that there’s going to be significant pressure applied to head towards a strike,” one industry veteran said.

Excluding commercial actors, there have been three film and TV actors work stoppages, the last one in 1980. Directors went on strike only once, in 1987, and it lasted only three hours.

However, despite DGA’s penchant for going in early and making a deal quickly and SAG-AFTRA being relatively quiet so far on its upcoming contract negotiations, there probably has never been a bigger confluence of factors for forging cooperation among the Hollywood unions.

“Interestingly, in this cycle, the DGA issues, the Writers Guild issues and the Screen Actors Guild issues are much more aligned because they’re basically on minimum compensations and on residuals, and there aren’t as many separate issues that are specific to just the Writers Guild,” one observer said. “There are always some, and the mini-rooms, while it seems like it might be a separate issue, it is really a weekly compensation issue.”

There has been chatter over the last several weeks about informal outreach by the WGA to the DGA and SAG-AFTRA, whose current contracts with the studios expire June 30, and a potential alignment, particularly the DGA.

“I think that the leadership of the DGA right now is much more aware that the negotiating power that the Writers Guild has, that they need the Writers Guild to push forward the issues that are important for their members, like residuals, because they’re the same issues that the Writers Guild has. People are just not making as much money as they used to,” an industry source told Deadline in early November. “They have a new executive director since the last [pre-pandemic contract negotiation], I think he and the current president of the DGA are much more aware of the need for some unified messaging.”

Indeed, in an email to their members last week, DGA Negotiations Chair Jon Avnet and National Executive Director Russell Hollander put “increasing streaming residuals” and “winning strong wage increases” at the top of their list of “big issues” at stake. They also sent out a strong message, echoing WGA’s willingness to strike.

“We have been preparing for more than a year to execute our Guild’s highest purpose: to protect your economic and creative rights,” they wrote. “We are ready for negotiations and, if necessary, we are prepared for a fight.”

We hear there is an effort by the studios to start negotiations with DGA before the end of the year and reach a deal that would be used as a template for the other unions. Even if that happens, it likely won’t be like previous times when the directors would go in on their own and force the WGA’s hand by setting up a contract framework.

“Who will make the deal first? Probably the DGA, they usually do,” one industry insider said. “But I don’t think they will do it without significant communication with the Writers Guild and Screen Actors Guild.”

The prospect of a writers strike had been on studio and network executives’ radar for months but has not been top of mind; they are expected to start focusing on the potential strife after the start of the year. There is not much that can be done in terms of preparation besides some stockpiling of scripts. (There is chatter that studios may be looking at their overall deal rosters with an eye toward terminating some in case of a strike like they did in January 2008 when some 40 pacts were axed using the “force majeure” provision.)

Unlike the Nov. 2007-Feb. 08 writers strike, the timing of a potential work stoppage falls during the annual broadcast hiatus before writers typically convene to work on the new season.

And ironically, the proliferation of the so-called mini-rooms that have become a main issue for the WGA in the upcoming negotiations would blunt the impact of a strike.

That is because those writers rooms are generally put together to work on new or returning shows before the network or streamer has made a decision on a series pickup or renewal. Increasingly, outside of broadcast, shows have their full seasons written before they proceed with production, which means that streamers and cable networks would be able to film fresh series installments with no interruption from a potential writers strike.

The issues surrounding mini-rooms include low pay, span protection (as stretching the time writers work on a season order for set per-episode producing fee brings down their weekly pay). Another point of contention is writers bouncing from one mini-room to another without a chance to accumulate the production experience that is crucial to becoming a successful showrunner. (I hear a couple of studios, including Netflix and UCP, have switched from per-episode to weekly compensation for writers.) The current model has greenlight decisions and filming coming weeks or even months after the mini-room has wrapped — and that’s extra time for which the studios and streamers are not willing to pay writers. That means that a generation of writers is coming up the ranks to supervising producer or co-executive producers without ever setting foot on a set.

“I think the companies are being very shortsighted about paying for the training to prepare the next generation of people that they need to run shows — it’s a real problem,” an industry source said.

The declining economic environment is likely to play a role in the upcoming negotiations. Writers’ incomes have been hit by inflation, giving the push for pay raises extra urgency.

Meanwhile, media stocks have had a tough time as investors’ priorities have started to shift from streaming growth to profitability. There is also the real threat of a recession, which could also weigh in on the talks. Some speculate that, like was the case with the previous negotiations during the difficult first months of the pandemic, writers would be less willing to strike during an economic downturn.

However, as SVOD and AVOD become the predominant medium for viewing existing series while streaming residuals lag woefully behind linear ones, writers may have no choice if the major studios don’t agree to a major hike.

Using the emerging technology terminology from the 2001 negotiation, companies have so far resisted pressure from the WGA for a drastic increase in streaming residuals.

“Even though the business may have grown 500%, nobody’s interested in raising the negotiated minimum 500%, it’s like, how about 3-5%?,” one person said.

As for the companies possibly using the argument that they are losing billions of dollars as they ramp up their streamers, “that’s because they’ve made a choice to compete for market share of viewership,” the person added. “The writers, directors and actors shouldn’t be suffering based on their choices for grabbing market share.”

Dominic Patten contributed to this report.

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