Twice this week, Carol Lombardini, the lead labor negotiator for the Hollywood studios and streamers, quietly met not with the striking Writers Guild but with Russell Hollander, the national executive director of the Directors Guild. In advance of next week’s formal talks and a June 30 deadline for a new DGA contract, a face-to-face like this—I picture Russ and Carol in long trench coats and spy hats on a shadowy bridge, but alas it was business attire in a Sherman Oaks office building—is pretty normal. It’s table-settling between the studios and the most studio-friendly talent guild—a guild that has gone on strike only once, 40 years ago, and for just a few hours. But this week’s meetings were not typical.
Usually with the DGA, initial proposal documents are traded, so each side has at least a basic framework of what the other wants. And that usually happens six months before the contract expires. Yesterday, no such documents changed hands, I’m told by two sources familiar with the meeting. Instead, amid the ongoing and nastier-by-the-second WGA strike, Lombardini and Hollander talked only in generalities, and it was atypically chilly, per the sources. (The DGA and AMPTP declined to comment.)
No, that’s not good news for those of us who, perhaps naively, hoped the directors’ negotiation would go more smoothly than the writers’, and that a DGA deal—as well as one for SAG-AFTRA, the actors union that also has a June 30 deadline—could help nudge the writers and studios toward a resolution. “It is a very dark sign,” Jonathan Handel, the entertainment lawyer and guild expert who contributes to Puck, told me when I relayed that news. Of course, if the directors and/or actors also strike, and everything scripted except the Universal Studios tram tour shuts down, we all go sun ourselves on the beach for the summer—and probably longer.
What’s not a surprise is Lombardini’s focus on the DGA, given the studios and writers seem to be occupying different planets. No talks are scheduled between the AMPTP and the WGA team led by Ellen Stutzman, and the typical backchanneling isn’t happening, either. Even today’s public response to the writers, which made decent points in addressing the chasms on issues like streaming residuals and A.I., failed to even mention film residuals, or the data transparency issue… or the revenue from ad-supported streaming services… or… the list goes on. They seemed like pointed omissions—or maybe the studios lacked a writers room to finish the document.
It’s now pretty clear that the AMPTP strategy is to let the writers stomp their feet on the sidewalks and on social media for a couple months, throw some tantalizing concessions at the DGA and SAG-AFTRA, and then use those deals as a cudgel to beat the writers into submission sometime in July. The problem, of course, is that Hollander and his SAG-AFTRA counterpart Duncan Crabtree-Ireland know this is the strategy—in part because picking off the DGA is exactly what the studios did 15 years ago. So the directors are already playing hardball in private and talking publicly about aggressive residual increases and the T-word—transparency in streaming data—that Netflix’s Ted Sarandos and the other C.E.O.s hate so much. As was evidenced by the DGA presence at the bicoastal WGA rallies last night, the directors are at least posturing that they won’t roll over, even if they won’t stop work now in solidarity, citing the no-strike clause in their studio deal.
The Social Media Era Strike
All week, I haven’t talked to a single person on either side who believes there will be a resolution with the writers before the other guilds decide what to do. Have you? The incentives just aren’t there. And the WGA is winning in the public square.
It’s interesting: this is the first Hollywood strike of the social media era, and the writers are behaving exactly as might be expected. Namely, they won’t shut up about it. All the anger and exasperation that was conveyed during the 2007-08 strike through the traditional media (and via Nikki Finke) has now been directed to Twitter, Instagram, and TikTok, then amplified by the traditional media and anyone online who will listen.
It’s been effective. My feeds are clogged with picket lines, and outside the algorithm bubble, both the local and national TV media seem very interested in the story. WGA negotiating committee member Adam Conover went viral and leveraged his tweets to get himself on CNN, where he trashed David Zaslav, the C.E.O. of CNN’s own parent company, arguing that Zaz’s $250 million pay package was “about the same level as what 10,000 writers are asking him to pay.” A dagger.
That stuff’s not gonna stop, and it will likely get way worse as the realities of a strike take hold. I’m told Apple suspended about a dozen showrunners today who aren’t actively working on in-production shows. Sony and Universal stopped paying as well, per Bloomberg, and others will follow. At the same time, writer-producers are being told to continue to perform producing duties despite the strike. Today I saw a super-aggressive letter from Disney’s 20th Television to an active writer-producer, warning that “you are not excused from performing your duties as a showrunner…,” and that’s “even if the WGA attempts to fine you for performing such services during the strike.”
Just wait until WGA members start posting their delinquent mortgage statements online. Juxtapose that with the pics we’ll see of Zaslav smiling at the Hotel du Cap in the South of France at the party he’s about to throw for himself—sorry, for the 100th anniversary of Warner Bros.—during the Cannes Film Festival. Appearances like that, and like Disney C.E.O. Bob Iger’s red carpet stroll at the Met Gala in sparkly Donald Duck sneakers, feel extra cringy now. And Writer Twitter might break altogether if any of the moguls dares appear courtside at the NBA Finals or on David Geffen’s yacht. Beware.
The Netflix Angle
But here’s the harsh truth: None of this public stuff actually matters. Not really, anyway. Not long term, not big picture. If the WGA thinks it’s gonna Twitter-shame the studios and streamers into emptying their pockets and opening their data black boxes, they’re forgetting that these companies are used to playing the bad guy and getting beat up online (google “star wars sucks now subreddit”), and they employ sophisticated negotiators trained to ignore the noise. Plus, by nearly all objective measures besides media, the writers have less leverage today than they did during the 2007-08 strike.
I’m not just talking about the streamer advantage, though we’ve all seen the reports about the stockpiling of shows, especially at Netflix. It’s a bit ironic: Netflix, the company that upended the television model and led Hollywood down the path that arguably resulted in this WGA strike, is now the one with such a big global tranche of content that it will be better insulated from the results of the labor chaos that it begat. Someone smart made a compelling argument to me yesterday that Netflix is actually not as well-prepared as many believe—that, because the service has trained its members to expect the firehose of new scripted originals every week, those Netflix customers will notice even a small strike slowdown more quickly than subscribers to other services, and they will cancel. By comparison, HBO Max subscribers don’t expect much more than a couple top-tier shows a quarter, which, given the stockpiling, all that new unscripted fare from Discovery+, and the pipeline of fresh Warner Bros. theatrical films, Max can keep delivering for a while. But not Netflix.
Maybe, but at least in the short term, Netflix and the other streamers will likely be able to satisfy their customers, bring in new ones, and sell ads—the burgeoning #cancelnetflix movement notwithstanding. At the same time, the traditional linear TV companies aren’t nearly as vulnerable as before. The audience for late-night shows and soaps is just so much smaller than it was 15 years ago, and the viewer backlash to a delayed or scrapped fall broadcast schedule, while not insignificant, likely won’t cause companies to hit the panic button for at least a few months.
Used to be you’d turn on NCIS at 9 p.m. and if there wasn’t a new episode in October, you’d freak out. Now, if you’re part of the 85 percent of U.S. consumers who subscribes to a streamer, you simply check out what’s available there, and the algo serves up something to replace the show you would have watched if not for the strike. Sure, there will be some impact, but not an actual crap-your-pants moment like if NFL players went on strike.
It’s also a much bigger media ecosystem now for certain talent. There’s unscripted shows and digital video outside WGA coverage, of course, but podcasts have in many ways replaced late-night TV as the venue for celebrities to promote their wares and make news headlines. (Yes, I’m looking at you, Gwyneth, and your Ben Affleck “technically excellent” sex comment on Call Her Daddy.) Podcasts aren’t covered by these WGA rules, allowing members like Marc Maron, Conan O’Brien, and Will Arnett (Smartless) to make tons of money working for media companies while technically striking against media companies.
And, let’s face it, the studios are kinda incentivized to wait this out awhile. Zaslav has basically said as much, and his C.F.O. Gunnar Wiedenfels must be salivating at the prospect of deleting pricey talent deals from his treasured spreadsheets and canceling already-greenlit shows. Paramount Global’s stock tanked nearly 30 percent today not because the Blue Bloods writers are on strike but because its streaming losses jumped to $511 million this quarter while its TV networks are sinking in quicksand. Paramount now wants to spend less, and is looking for any way to cut costs, including fewer shows and talent deals.
Hence C.E.O. Bob Bakish saying the impact of the strike on cash flow will be positive. Yes, positive. “The sorry news for writers is that, in declaring a strike, they may in fact be helping the streaming giants and their parent companies,” the analyst firm Moffett Nathanson wrote in a note this week to clients. Sad but true.
They’re not on social media, and they would never say this publicly, but many writer-friendly executives, agents, and even some veteran writers themselves acknowledge that the television business has fundamentally changed, and no guild strike can bring the old ways back. The broadcast network model is nearly gone; streaming means a higher volume of shows, a lower volume of episodes of those shows, and a necessarily changed approach to compensation. “The strike will end eventually, but regardless of whether it ends quickly or drags out, we believe the age of Peak TV is over and is not coming back,” Moffett Nathanson added in its note. “The economics of writing for television have likely permanently changed.”
This doesn’t mean the WGA shouldn’t fight to keep what it can, and, more importantly, to change the model to better value the work of writers. They’ve got great points, and in many ways streaming has pulled the financial rug out from under them. But now that both sides are dug in, the studios don’t yet have a reason to acquiesce, and there isn’t really a statesman who can step in to resolve it with credibility on both sides. Maybe CAA’s Bryan Lourd, who has great studio relationships. Or Jay Sures at UTA, who now reps WGA president Meredith Stiehm. Or Bob Iger, or Ken Ziffren. The reality is, it’s probably way too early for those guys to get involved—meaning this situation will need to get a lot worse before it gets better.