Hollywood’s Path of Mutually Assured Destruction

David Young
Writers Guild of America West Executive Director David Young during a 2008 press conference. Photo: Toby Canham/Getty Images
Matthew Belloni
November 10, 2022

As usual, everyone in town seems to know definitively whether there will be a disastrous Writers Guild strike on May 1. Good for you, but I’d argue that’s a bit silly and premature; the Directors Guild hasn’t even started negotiating, as is expected soon, and those talks typically set the tone for SAG-AFTRA and the W.G.A. It’s a nuanced process.  

Still… if the chatter around town and the private emails forwarded to me lately are any indication, there’s worsening anger and resentment in the writer community over the shifting economics of streaming—shifts that I detailed back in June and that, by and large, have led to most Hollywood writers making less money for more work. There’s also a feeling that, despite all the posturing and public tantrums, the W.G.A. has ended up settling in previous standoffs for modestly increased minimums and perks like paid family leave, rather than targeting the fundamental evolution in how content producers generate money. In short: Writers are pissed, and frustrated, they feel left behind, and they seem hellbent on creating chaos if necessary to get what they want. “This is the war of our lifetime, and our children’s lifetime,” one W.G.A. member email to another writer reads. 

At the same time, those studio water towers aren’t exactly overflowing with champagne these days. The employers are facing increasingly perilous financials, with the C-suites presiding over companies that are, for the most part, about half as valuable as they were just a year ago. I know, it’s hard to play a violin for a corporation, but the bottom is falling out of cable television, streaming is very expensive and not very profitable, every studio has announced layoffs or cost-cutting, and executives are being asked to scrounge for dimes and nickels in their casting couches. The last thing they want to do is pay more for writers when all the signs are flashing pay less.

The result, predict many: a path toward a mutually assured destruction event next May 1, one greater than even the 100-day work stoppage of 2007-08, which cost the L.A. economy an estimated $2.5 billion. One top TV executive told me yesterday that he’s already booked the Four Seasons Maui for the second week of May, typically the pre-upfronts frenzy. He’s that sure.

Given the news this week, I don’t blame him. Did you see the W.G.A. negotiating committee they just announced? It’s a who’s who of studio antagonists. Taking the lead is David Young, the longtime W.G.A. West executive director, who was alleged in a court filing to have threatened to “kill” WME’s Rick Rosen during the guild’s recent war against the talent agencies that ended TV packaging and limited content ownership. (Young denied the death threat but admitted he said he “should kick his ass.”) Former W.G.A. West presidents David A. Goodman and Chris Keyser are co-chairs. Ashley Gable, a named plaintiff in the agency lawsuit, is on the 24-member committee, as is agitator Adam Conover and David Simon, The Wire creator and a literal and verbal flamethrower (pro tip: don’t cross him on Twitter). They even thawed out Patric Verrone, president of the guild during the last strike—the benefits of which are still pretty elusive to many writers—to serve on the committee.

Several other new members promised aggressive tactics in their campaign statements. Angelina Burnett won a seat on the board after advocating to go beyond bigger minimums to demand incentives for higher over-scale ceilings. “Will it take a strike? Yes. Should we consider striking for this? Yes,” she wrote. Burnett also—correctly, in my view—targeted the lack of transparency in streaming consumption data and the disappearance of traditional profit-participation backends. “At some point, the companies must be forced to open the black box and share data with unions and profit participants,” she wrote. “Will it take a strike? Almost Certainly.” It’s no surprise that, according to two sources who have dealt recently with its leadership, the W.G.A. is already talking about demanding concessions that go well beyond prior negotiations, and they are said to be refusing to even discuss coordination with the other guilds. (A W.G.A. rep declined to comment.)  

If only the guild were fighting this battle in early 2020, when the studio spending on streaming was considered a value-add and certainly wasn’t dragging down their entire companies. The pandemic killed that effort, of course, taking away the strike threat and causing a quick settlement for modest gains. Now, nearly three years later, it’s a much more dangerous battlefield. In just the past two weeks, Disney C.E.O. Bob Chapek announced a $1.5 billion loss in streaming this quarter, which contributed to a 13 percent stock drop the next day. The same narrative has spooked investors at Paramount Global, Warner Bros. Discovery, and NBCUniversal’s owner, Comcast, where cable subscribers are down 10 percent in a year. It’s unfortunate timing because streaming, where minimums and residuals are lower than in pay or free TV, is the area where writer wages most need to come up.  

The other red flag this time around is inflation, which threatens to upend all the guild negotiations. Think about it: In 2020, the W.G.A. got 3 percent gains in most minimums, among other concessions. But what does that even mean in an environment with 6 to 8 percent inflation year-over-year? The guild would be losing ground on that deal today, if separate cost-of-living increases don’t make up the difference. On the studio side, does lead negotiator Carol Lombardini need to double her offer just to keep pace with inflation? Is that the studios’ responsibility?

You see where this is headed. At times like now, the industry could use a leader to step in and mediate. Someone with power and credibility on both sides of the labor debate. But who would that be these days? The leadership at the top level of these studios doesn’t really have a profile with the talent like a Bob Iger, formerly of Disney, or Peter Chernin, formerly of Fox, once did. Chapek is definitely not that guy. And Warner Bros. Discovery’s David Zaslav comes from the unscripted TV world. Shari Redstone? Jeff Shell at NBCUniversal? Tony Vinciquerra at Sony? CAA’s Bryan Lourd or Endeavor’s Ari Emanuel are fresh from their legal war with their own clients, and animosities remain between writers and agents. With all the other problems facing these companies, who’s gonna make labor peace a priority?   

Maybe they should. One hopeful insider I talked to this week thought that if the Directors Guild moves soon, there might be a window in January or February for a macro deal that could work for the directors and actors, and then the entire industry would lean on the writers, basically begging them to ask for a ton but be prepared to accept less to not shut the whole business down. Some of the higher-wage writer-producers could even threaten to leave the guild, lest their rich overall deals become collateral damage in a strike. I doubt that would happen, but the stakes are definitely high. 

I know what a big part of the town thinks of the Writers Guild. They’re nutjobs, many of their own allies often say, activists who shoot themselves in the foot and wage the wrong wars at the wrong time. After all, what did that last strike actually achieve? Certainly not a blueprint for writers to reap huge windfalls from the Streaming Wars. Sure, the battle with the agencies aligned their financial interests, but it also raised their out-of-pocket expenses by requiring commission payments on most jobs instead of package fees. Now they want to shut down Hollywood? This could all be misguided, or maybe it’s simply noise.  

But I doubt it. Not this time. Things seem different. The entire industry has changed. The writers feel they’re the last to benefit, and they’re not wrong. They want more this time, regardless of how challenged these companies are. If the studios think the W.G.A. will bang the drum then fall in line, this winter will be followed by a long, dry summer.