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Two years after the war between writers and agents went nuclear, as David A. Goodman completes his final months as president of the Writers Guild of America West, he thinks about the moment the fight ended — when, in February, WME was the last talent agency in town to agree to sunset packaging and divest ownership in production entities. “It was COVID, I was at home,” says Goodman. “I probably had a few drinks. It was out of a sense of relief because, even though it was the guild that did this, I was leading it. I felt enormous responsibility to our members who wanted their agents back.”
Mass firings are supposed to be the thing that every union dreads and, in the annals of international labor history, very few breakthroughs have happened as a result of them. And yet, it worked in Hollywood. On April 22, 2019, more than 7,000 movie and TV scribes told their agents to take a hike and, ultimately, it got them what they wanted.
The WGA felt that in the drive for profits, agents had lost sight of who they were supposed to be working for. And so the WGA cracked down on agencies that packaged talent together and took backend stakes in productions. It tried to time the conflict so it wouldn’t step on the collective bargaining agreement with the Alliance of Motion Picture and Television Producers that was set to expire the next spring.
Unexpectedly, the dispute with the talent agents dragged on and on and on. By February 2020, with the big four agencies yet to cave, Hollywood’s writers were being prepped for a second war — this one against their own employers. Be ready to strike, Goodman signaled to his troops. Anticipating walkouts, studios began stockpiling scripts.
The industry braced for two simultaneous labor battles, but then, in a matter of weeks, the plot moved quicker than a Tom Hanks drama. A novel coronavirus spread across the globe. Studios halted productions. Headlines warned of economic depression. And the industry zagged. One by one, the talent agencies gave in to the WGA’s demands. In turn, the writers, relatively fortunate to be able to do much of their jobs from home, backed away from marching in the streets against Hollywood producers. “You can’t go on strike during a pandemic,” says Goodman. “Here we were facing this economic catastrophe. I don’t think we could have asked our members to do that. We wouldn’t have had solidarity.”
On July 1, 2020, the WGA and AMPTP reached a deal that renewed for three years the master TV/theatrical agreement that sets forth basic wages and working conditions. (Other unions did the same.) The WGA achieved unprecedented parental leave benefits, while also scoring modest wage increases, but quite a lot about Hollywood’s rising streaming economy was left at the negotiating table — or, rather, on Zoom.
If it wasn’t entirely obvious last summer that skipping over problems brewing on the streaming front was unwise, it would become clear by the end of the year, when studios including Warner Bros. and Disney announced they’d be debuting some of their tentpoles on affiliated streaming services concurrently with a theatrical release. The pandemic sped up a long-anticipated shift in business models: the collapse of Hollywood’s windowing system. Nevertheless, “day-and-date” release announcements for movies like Godzilla vs. Kong and Black Widow caught talent off guard, with furious negotiations commencing among studios, actors, directors and others over a diminished box office.
As for writers, very few have contracts that entitle them to bonuses for theatrical success, but whether a film is described as playing in the theatrical market or characterized as being re-used in new media has an impact on residuals flowing to talent. (The same is true for television, as a show produced for HBO’s over-the-top service isn’t treated quite the same as one made for HBO Max.) And writers (as well as actors and directors) can’t count on studios to take an accounting posture that isn’t in their best interests. Hence, arbitrations, lawsuits, and yes, collective bargaining.
Concerted negotiations aimed at resolving how to properly compensate talent for their contributions on the streaming front will have to wait for another day. In the midst of a global health crisis, it didn’t happen last year, but with a more favorable political environment for unions it might happen sooner than most are expecting. Though, there’s also another reason why the industry opted for labor peace rather than confront some of the difficulties ahead.
“The union is always one step behind,” says Ronald Seeber, a labor relations expert who back in 2007, when writers went on strike, was Jon Stewart’s first Daily Show guest to explain the situation. “To try to get people to act together on the basis of a future threat, even if you know it is a threat, is a very difficult thing.”
In Hollywood, there’s an origin story for just about everything, and the industry’s above-the-line unions are no exception. The WGA, SAG-AFTRA and the Directors Guild of America (plus predecessors like the Screen Writers Guild) all have lore that dates back to 1930s, when the industry was in the throes of the Great Depression. Stories involve secret meetings among some of the most famous individuals alive at the time. These pioneers were undoubtedly assisted by the 1935 passage of the National Labor Relations Act, which guaranteed the right of workers to engage in collective efforts to improve their working conditions. Before then, many of them had grown frustrated with their bosses, were desperate for financial security, and only temporarily mollified by stunts like when MGM sold off its Treasury bonds and hired an airplane to airdrop cash on workers.
In 1933, Louis B. Mayer, the head of MGM, called an emergency meeting where all the studio’s actors, directors, writers and stagehands gathered inside a large theater on the lot. Mayer told everyone that for the sake of the studio’s future, they would be taking a 50 percent pay decrease. The announcement provoked a mixed reception from the attendees, but it was ultimately accepted. On the way out, Mayer smirked and asked his right-hand man, “So! How did I do?” (The moment was captured in Mank, Netflix’s Oscar-nominated film released last year.)
Within months, it became clear two groups would escape pay cuts: studio executives and unionized craft workers (covered under the International Alliance of Theatrical Stage Employees contract). “There was a realization that [everyone else] had been swindled,” says Miranda Banks, a film studies professor and the author of The Writers: A History of American Screenwriters and Their Guild. “This was definitely the moment when writers and actors understood there was a problem.”
That’s when the industry’s talent began plotting their unions — and when studios used the organization that puts on the Academy Awards each year as a vehicle to subvert their formation.
To fight off new unions like the DGA, the studios positioned the Motion Picture Academy as the entity that would ostensibly represent the interest of workers. In 1935, the studios tapped Frank Capra, who would later direct It’s a Wonderful Life and Mr. Smith Goes to Washington, to lead the Academy. He was supposed to be in the pockets of the studio bosses — but Capra surprised them by firmly standing behind the DGA. In 1939, to cajole the Motion Pictures Producers Association into negotiating, he threatened a boycott of that year’s Academy Awards as well as a strike among directors if the DGA wasn’t recognized within 24 hours. “DIRECTORS DEMAND SHOWDOWN,” was the screaming front-page headline in the Feb. 17, 1939, issue of The Hollywood Reporter. The gambit ultimately worked. The directors’ first collective bargaining agreement established minimum salaries, two weeks of preparation time for movies budgeted at more than $200,000, and the right to be consulted on the editing of their films.
Around this same time, the studios’ control over the labor supply would weaken significantly thanks to two (metaphorical) earthquakes that fundamentally transformed the industry. The first came when Gone With the Wind star Olivia de Havilland took on Warner Bros. for repeatedly extending her contract. The actress insisted she couldn’t be kept under contract for longer than seven years because of a California law that limited personal service terms to this duration. The studio maintained it could suspend her for refusing roles and her time under suspension didn’t count toward actual service. In 1944, a California appeals court sided with de Havilland. The judges recognized that actors would reasonably refuse demeaning roles that might destroy their popularity and interfere with further employment. To then hold them to “peonage or serfdom” would be unacceptable.
Then, in 1948, the U.S. Supreme Court handed down a major antitrust opinion in a case concerning the vast power held by studios that also controlled theaters. In United States v. Paramount Pictures, the high court reviewed how the majors were keeping independents out of the business and concluded that forcing divestitures was an appropriate remedy. Suddenly, there became space for producers distributing smaller films, which, in turn, meant more competition for the services of entertainment workers.
While those decisions helped secure the unions’ place in the entertainment economy, it’s how the industry pivoted in response that cemented it. Because the big studios had to become more responsive to what theaters and audiences wanted, companies including MGM, Warner Bros., Fox, RKO Pictures and Paramount began focusing on bigger-budget movies — and, since they were now making fewer films altogether, they began using their backlots to make TV shows.
With the television economy getting off the ground, thousands of new writers and directors — and tens of thousands of actors — needed representation. The ranks of the guilds exploded. When studio films started playing on television, the creators demanded to share in the spoils of downstream distribution. Thus came residuals. Says Catherine Fisk, a law professor at University of California, Berkeley, and the author of Writing for Hire: Unions, Hollywood, and Madison Avenue, “The guilds adapted to the dramatic change in business model by gaining the right to negotiate over TV.”
Today, nearly 75 years after the collapse of the old studio system, production and distribution are again coming under the roofs of vertically integrated conglomerates. Netflix paved the path, but now hardly a month goes by without news that WarnerMedia, ViacomCBS, Comcast or Disney is putting its movies on an affiliated streamer or developing TV properties for its platforms. As if on cue, new battle lines are forming that recall old tensions.
For example, SAG-AFTRA is currently upset at how streamers like Netflix and Amazon Prime have been dithering on timely renewals or cancellations of shows, while effectively holding talent creatively hostage. According to research conducted by the guild, not only has the average number of episodes per season decreased in the past decade by 52 percent, but the median “hold” time on an actor’s services has increased 41 percent, or about two months.
“The growth in streaming media has dramatically upended how series regular performers work and severely harmed many of those performers in the process,” says SAG-AFTRA national executive director and chief negotiator Duncan Crabtree-Ireland. “The days of television seasons consisting of 20-plus episodes and returning on a consistent schedule are gone. Now, seasons for most shows include far fewer episodes — often as few as seven or eight — and the time between seasons when actors are held off the market unable to work is both much longer and completely unpredictable.”
“Held off the market unable to work” was the same objection actors voiced when de Havilland challenged Warners.
So the union pushed the California legislature to pass a bill called the FAIR Act, which would amend the seven-year rule to place a 12-month hard time limit on the exercise of contractual options for an actor’s exclusive services.
“The FAIR Act would bring these employment practices into this century —something the employers have so far been unwilling to do of their own accord,” says Crabtree-Ireland.
The entertainment companies have reacted with fury to the proposal. Earlier this year, Netflix even warned lawmakers that the FAIR Act would have “significant negative impacts on the quality and quantity of series produced in California” by “creating overly strict and artificial timelines for the completion and orders of subsequent seasons of episodic series.”
The Motion Picture Association hinted at bringing a lawsuit if it’s enacted. An April 12 memo from Hollywood’s top trade group told lawmakers options and exclusivity in contracts is subject to collective bargaining and any attempt to tip the outcome would be preempted by federal labor laws.
On April 21, just a few days before the California legislature was scheduled to hold a hearing on the issue, the bill was pulled. The state assemblywoman who sponsored the legislation told SAG-AFTRA more public education was needed before advancing further.
Regardless of the fate of the FAIR Act, it portends what’s coming in 2022 when a three-year deal between Netflix and SAG-AFTRA is up for renewal. That 2019 pact was historic: the first time the streamer had done a direct deal with a guild. (Netflix is not a member of the AMPTP and doesn’t yet have a deal with the other unions.) The agreement recognized performance capture and dubbing as covered work, among its advances, and also reflected newfound priorities in the #MeToo era. For example, there’s now a ban on auditions for actors in private residences and hotel rooms.
While many in the industry assume there won’t be any other big labor negotiations until 2023 (when the pandemic-era AMPTP agreements expire), there’s always the possibility that streamers open talks with Hollywood’s above-the-line unions before then. “Any company that wanted to do a deal ahead of  negotiations, we absolutely could,” says Goodman, who will finish his term in August. “The guild will talk to anybody about anything. But these are smart businessmen and businesswomen, and they are only going to make a deal if they see it is beneficial to them.”
What could possibly compel streamers to roll out the red carpet for negotiations on the labor front? Especially when insiders like Ken Ziffren, who has advised the DGA, propose the guilds should have “a seat at the table” to discuss the proper valuation of a movie whenever it gets licensed to an affiliated entity.
For one, there’s suddenly quite a bit of movement in D.C. around antitrust reform. Among other developments, competition regulators have taken a particular interest in those (like Amazon and Google) who hold dominant market power over crucial digital platforms. It’d be only a small step toward regulating the streaming economy. At the same time, lawmakers like Sen. Amy Klobuchar (D-Minn.) propose subjecting any monopsony (fancy speak for a single buyer of goods and labor services within a given market) to broader antitrust scrutiny. That could certainly impact Hollywood and make mergers much more difficult to complete. It will be interesting to watch what happens with the proposed tie-ups between WarnerMedia and Discovery, and Amazon and MGM Studios, as those marriages are sure to be a top conversation these next few months in the nation’s capital.
One feature of the nation’s laws that currently exists and will almost certainly carry forward: an antitrust exemption for anything that’s the result of collective bargaining between employers and unions.
The Biden administration could bring the friendliest terrain the guilds have ever fought on. In fact, one might question how it is that before this time, guilds for actors, writers and directors survived. After all, Hollywood’s guilds not only outlasted the anti-unionization efforts of the 1950s and 1980s, but they also then thrived even as many workers outside entertainment embraced, or at least accepted, the gig economy. In the U.S., about 12 percent of workers are unionized, according to the Bureau of Labor Statistics. In Hollywood, it’s nearly everyone, even though workers largely operate on a project basis (making them susceptible to being labeled independent contractors) and typically have other representatives like agents and lawyers.
Those who have studied the issue toss around theories about why unions have remained such a prominent presence in the industry. Some point to political ideology. After all, Hollywood stars are generally liberal. And as for the politician who, in the 1980s, caused re-examination of the worth of unions by famously firing more than 11,000 air traffic controllers, well, that guy had an interesting origin story as well. “[Ronald] Reagan was a former president at SAG, so while he went after many unions, he also felt indebted to his old Hollywood friends,” says Banks.
Plus, Hollywood unions have proven useful — even to those same studios which initially tried to bust them.
“A freelance economy works better when unions can provide continuity of employment, pension and health benefits, and can train highly skilled workers,” says WGA general counsel Tony Segall. “I’ve always said that if there weren’t unions, employers would have to invent them.”
It can also be said that unions have played a key role in the development of the business, providing a second look anytime Hollywood finds a new way to exploit its intellectual property. That was true back in the 1950s upon the birth of syndicated TV and remains so today in the digital era. Of course, the unions tend to be better at reacting to change than anticipating it — as shown by the 2007-08 writers strike. At the time of the famous three-month strike, which one economist estimated cost the industry some $2 billion in lost revenue, the video iPod had just been introduced and consumers were downloading new episodes of Desperate Housewives. The writers wanted their fair share, and they ultimately got it, but it wasn’t long before paid downloads became quaint. As Banks points out, “A month after the strike, after the studios declared that streaming was solely for promotional purposes, Hulu launches.”
The era of streaming is now firmly here. For better or worse, when the guilds next negotiate the tough issues that have developed on this front, they’ll have the weight of history on their shoulders.
“We have this 600-page collective bargaining agreement, and it’s really hard to take stuff out of it,” says Segall, adding that it would be easier to start from scratch. “You could design a system that didn’t have a million different formulas and these weird historical oddities. It would be much easier to administer, but that never happens because it’s very hard to change things that are already in place.”
A version of this story first appeared in the May 26 issue of The Hollywood Reporter magazine. Click here to subscribe.
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