The Art of the Deal: Writers’ and Actors’ Strikes Will Provide Lessons for All

July 27, 2023

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In the 1980 sequel to Star Wars, the Empire Strikes Back, the Imperial fleet of the Evil Empire, ruled by Darth Vader, attacks the Rebels and heroes of Star Wars: Han Solo, Leia, Chewbacca, C3PO and crew.[1] In the end, the heroes win out, but it took more than one movie to get there. Hollywood is no stranger to good vs. evil showdowns. Consider the following, for example: (a) any Marvel Cinematic Universe, James Bond or Lord of The Rings movie; (b) Avatar; or (c) *gasp* — the Twilight Franchise. A similar battle is currently at play across Hollywood as two strikes have shut down production for both television and the big screen. On one hand, you have the unions for the writers and the actors — the heroes, the rebels, the artists. On the other side you have the studios, producers, distributors, and streamers — to some, the Evil Empire. Hopefully, it does not take years (or nine bloated movies) for a resolution to be reached.

For anyone negotiating collective bargaining agreements (or for anyone who loves watching great TV and movies), the resolution of these strikes makes these matters destination viewing. Here’s what’s at issue.

Writers Guild of America (“WGA”)

On May 2, 2023, the WGA went on strike against the Alliance of Motion Picture and Television Producers (“AMPTP”).[2] This was the WGA’s first strike in 15 years.[3] The WGA is seeking (1) an increase in compensation and residuals from streaming giants (think Netflix, Hulu, Amazon, Warner Bros. Discovery[4]); (2) limitations on artificial intelligence (“AI”) in scripts; and (3) an increase in viewer data sharing from the streamers.[5] Considering inflation, pay for writers has declined 23% over the last 10 years.[6] Residuals — payments to writers and creatives for reruns and additional airings of their work after initial release — have similarly dwindled as the streamers have grown.[7] While a residual for a single night rerun of a broadcast show might have once netted a writer $12,000, a streamer will pay the writer $4 for those at home to watch the show on repeat in perpetuity.[8] With AI, Netflix and other streamers already green-light new material based entirely on algorithms of viewing habits. As the technology grows, writers fear that computers will have to share credit or be entirely replaced by the machines.[9] The Matrix is real.

Presently, the AMPTP has no intention of sitting down at the negotiating table. “The endgame is to allow things to drag on until union members start losing their apartments and losing their houses,” one studio executive said.[10] While this dialogue is to be expected coming from Logan Roy in HBO’s Succession, it may not make for good-faith negotiations. Perhaps the studios should heed the advice of Boba Fett in The Empire Strikes Back: “He’s no good to me dead.” However, as Gordon Gekko in Wall Street says, some may take the position that “Greed, for a lack of a better word, is good.” However, it’s only good for one side of a negotiation. Both parties expect the dispute to last until at least until October, which will upend the fall season of television shows.[11]

Screen Actors Guild–American Federation of Television and Radio Artists (“SAG-AFTRA”)

On July 14, 2023, the actors’ union of SAG-AFTRA joined the writers of the WGA on the picket line. This marked the actors’ first strike since 1980, and the first time that writers and actors have gone on strike together since 1960.[12] At the onset of negotiation, SAG-AFTRA had sought to negotiate their collective bargaining agreement from scratch, as technology has changed so rapidly since the last agreement, it rendered the entirety of it moot.[13] Much like the WGA, SAG-AFTRA is seeking a significant increase in residuals from streaming platforms and transparency in how data is collected for them.[14] While Netflix uses viewers’ data, including search history, watch history, and other demographics to influence what programming they create or option, Netflix does not provide this information to SAG-AFTRA.[15]

Many actors have used social media to reveal how little they are making in residuals from streaming. Mandy Moore, a star of This is Us, one of the largest shows in the past few years, has received checks ranging from a penny to $0.81 cents from Hulu.[16] Mark Proksch made more money on residuals as essentially a background actor in 19 episodes with a few lines in The Office, than he currently does as a lead over five seasons in FX/Hulu’s What We Do In The Shadows.[17] Kimiko Glenn from Orange is The New Black, one of the first streaming hits on Netflix, has only made $27 in foreign residuals earned over the decade since the show began.[18] The difference is because where traditional network TV pays residuals for each re-airing, streamers under the 2012 New Media Agreement entitled actors to residuals not based on how many times each episode was watched but on a percentage of the licensing fee. Even if the show is viewed once or a million times on Netflix or Hulu, the residual pay is irrelevant and most streaming companies refuse to provide its viewership data, making it near impossible for actors to negotiate on their own behalf.

Increase in the use of AI is perhaps even more chilling for the actors. While it can be used for benefit — de-aging Harrison Ford in the latest Indiana Jones — it can also be used to eradicate their necessity. According to SAG-AFTRA, the studios want to be able to “scan a background performer’s image, pay them for a half a day’s labor, and then use an individual’s likeness for any purpose forever without their consent,” or “be able to make changes to principal performers’ dialogue, and even create new scenes, without informed consent.”[19] The studios have already recreated the voices of Andy Warhol and Anthony Bourdain, both deceased, for new projects since their passing.[20]

Conclusion

In the past few days, both SAG-AFTRA[21] and the AMPTP[22] have issued charts pointing out their respective positions. Each side calls the other “misleading” in their public posturing.[23] Like the WGA strike, there is not a close end in sight for either side. Lando Calrissian summed it up best in The Empire Strikes Back: “This deal’s getting worse all the time.” We all await resolution to these matters for what can be learned and applied to future CBA negotiations. Without new movies or TV shows being made, all of us will have to cling to the only actions being taken until resolution is reached: the writers and actors steadfastly saying, “Show me the money.”

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[1] https://en.wikipedia.org/wiki/The_Empire_Strikes_Back

[2] https://en.wikipedia.org/wiki/2023_Writers_Guild_of_America_strike

[3] https://www.hollywoodreporter.com/business/business-news/wga-writers-strike-moves-forward-contract-negotiations-1235404087/

[4] Warner Media owns HBO and Discovery+. https://variety.com/2023/tv/news/max-streaming-service-hbo-warner-discovery-1235579785/

[5] https://www.whats-on-netflix.com/news/sag-aftra-and-wga-on-strike-what-it-means-for-netflix/

[6] https://apnews.com/article/wga-writers-strike-demands-d403f5b4666f20e2ce3e379bcaef5f2a

[7] https://fortune.com/2023/07/19/what-are-residuals-hollywood-writers-actors-strike-streaming/

[8] https://apnews.com/article/streaming-shows-removed-residuals-4be3ac859c766c352e57ef96176fd812

[9] https://fortune.com/2023/07/24/sag-aftra-writers-strike-explained-artificial-intelligence/

[10] https://deadline.com/2023/07/writers-strike-hollywood-studios-deal-fight-wga-actors-1235434335/

[11] https://deadline.com/2023/07/writers-strike-hollywood-studios-deal-fight-wga-actors-1235434335/

[12] https://sherman.house.gov/media-center/press-releases/sag-aftra-strike-sherman-issues-message-of-support