Snitzer recorded on "hot mike" urging his staff to "strike". "Listen, some of you aren't going to survive this year. We're taking heavy casualties and under constant fire from the tabloids. Do the right thing and join the picket line. Else I'm going to have to cap your ass".
Hollywood Writers Strike Might Give Studios Chance to Slash Costs
Industry executives point to clauses that let parties sidestep contractual obligations in extraordinary circumstances
By Joe Flint, WSJ
May 3, 2023 11:56 am ET
The Hollywood writers’ strike could give studios and streamers an opportunity to slash costs by exiting undesirable talent contracts if the work stoppage drags on for an extended period, some entertainment executives said.
Members of the Writers Guild of America, which represents some 11,500 writers, went on strike this week after failing to reach a new deal Monday with the Alliance of Motion Picture and Television Producers, whose members include Netflix, Disney, Warner Bros. Discovery and Paramount.
Late-night shows were the first casualties of the strike, with most heading into reruns for Tuesday’s editions. In the event of a prolonged strike that affects scripted TV shows, entertainment companies are expected to try to fill the void with foreign shows and more unscripted fare.
The union representing movie and television writers went on strike after union’s talks with major networks, streamers and studios ended without a deal. WSJ’s Joe Flint explains what’s at stake. Photo: Aude Guerrucci/Reuters
People on both sides of the negotiating table say they aren’t expecting a quick resolution to the work stoppage, given how far apart the parties are on certain issues.
If the strike does drag on, studios and streaming services are likely to try to exit from deals with some writers by exercising “force majeure” provisions in contracts, senior entertainment executives said. Those clauses typically excuse parties from their obligations because of extraordinary occurrences outside of their control.
Such cost-cutting occurred during the last writers’ strike in 2007 and 2008, which ran about 100 days. “Everyone is looking to cut development costs; it would be surprising to me if there weren’t conversations occurring around this,” said Briana Hill, an entertainment lawyer at Pryor Cashman.
How and when deals could be dropped depends on the language of the agreement. “The force majeure provision usually includes the ability to extend or to terminate agreements, and the timing is often contractual with respect to how many weeks it would be,” Ms. Hill said.
Hollywood has been in retrenchment mode for some time. Warner Bros. Discovery and Paramount have been killing projects in development and canceling shows as part of efforts to cut costs. Major entertainment companies have also been resorting to layoffs, including Disney, Warner Bros. Discovery, Paramount and NBCUniversal.
Netflix, which airs ’The Crown,’ and some other streaming services tend to make content far in advance. PHOTO: KIN CHEUNG/ASSOCIATED PRESS
In the event of a prolonged strike, some content providers will be in a better position than others. Netflix, Apple TV+, HBO and its Max streaming service all tend to make content far in advance.
“We have a large base of upcoming shows and films from around the world,” Netflix Co-Chief Executive Ted Sarandos said when discussing a possible strike last month during the company’s latest quarterly earnings call. “We could probably serve our members better than most.”
The broadcast networks, on the other hand, could find themselves without new episodes of sitcoms and dramas when the fall season starts, as their writers would normally be gathering in the coming weeks to create new scripts.
In the 2007 strike, the reality-television genre got a big push. Given how prevalent such fare already is across the media landscape, it seems unlikely a similar surge will occur.
The latest labor dispute was caused, in part, by entertainment companies’ continued shift toward streaming, which writers say has left them shortchanged. The most divisive issues on the table include a WGA demand for a minimum number of writers per television show and guaranteed employment for those writers from conception to postproduction.
In a statement Monday, AMPTP called those demands “a primary sticking point.” The WGA said that without such guarantees, writing would devolve into a gig-economy job. It said content companies’ resistance “betrayed a commitment to further devaluing the profession of writing.”
Another demand meeting with strong resistance is a guarantee that writers will be paid for movie script rewrites, regardless of whether one is necessary, and will receive additional pay for what is known in the industry as a “page one” rewrite, which is essentially an overhaul of an entire script, people close to the talks said.
The two sides are also far apart on an increase for residuals—the royalties writers receive from licensing and syndication of shows they have worked on. The WGA is seeking an increase of 200% in foreign residuals from streaming, the people said.
AMPTP said it has offered significant increases in royalties and would go higher, but not until the other roadblocks are cleared away.
A WGA spokesman didn’t respond to a request for comment.
A resolution could potentially come more quickly if AMPTP is able to strike new deals with the unions representing directors and actors. That could put pressure on the WGA to reach an accord. Negotiations with the Directors Guild of America are scheduled to start next week, while talks with the Screen Actors Guild are planned for June.
Write to Joe Flint at Joe.Flint@wsj.com
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