"Am I Going to Get Paid?" Hollywood Lawyers Grapple with Pandemic Impact

Beverly Hills movie theater

Beverly Hills movie theater

An unprecedented crisis threatens an already fragile deal ecosystem: "It's going to be a f—ing mess."

Two weeks ago, the biggest concern facing the industry was the threat of a strike as writers and studios prepared to enter heated contract negotiations. But, in recent days, that great unknown has been displaced by a global pandemic that's brought Hollywood — and society at large — to a screeching halt. Says lawyer Jamie Feldman, who works with Steven Soderbergh and Barry Jenkins: "It now feels like all the time we've spent talking about the WGA and the ATA and the potential strike issues was just rearranging deck chairs on the Titanic."

As COVID-19 sweeps the globe, the domino effect of the pandemic is becoming evident. Government officials have ordered the closures of schools, theaters and restaurants and banned large gatherings in an attempt to slow the spread of the highly contagious virus. "It's like a bad movie," says veteran film attorney Linda Lichter, adding: "And yes, I have recently watched Contagion."

Hollywood offices have emptied as studios, agencies and law firms transition to remote work, major events and festivals including SXSW have been canceled and dozens of productions here and abroad have been suspended. In legal terms, many consider the global pandemic to be an event of force majeure, an unforeseeable incident that makes fulfilling a contract impossible.

"This has to be the most devastating example of a true force majeure event Hollywood has ever had," says talent attorney Lev Ginsburg, who reps Timothée Chalamet and Colin Trevorrow. "After all, labor strikes are generally one union at a time and natural disasters like wildfires and earthquakes are local. A global pandemic triggering simultaneous industry-wide shutdowns is without precedent. We are going to have to figure it out day by day, and everyone seems to have the same principal focus: keeping everyone safe."

Even before most productions made the decision to delay filming, talent was hesitant to show up to set. In fact, one actress shooting an indie movie was said to have felt so uncomfortable doing so that she raised concerns with producers — but they couldn't call off production because their insurance policy would only cover a shutdown if it was government-ordered or an individual on set tested positive for the virus. Though one attorney suggests someone in the actress' position could try and claim a disability if they felt vulnerable to being infected, a source says she and the producers came to a compromise: They'd make it a closed set, a body double would be used when necessary and everyone would stay at least 6 feet away from her at all times — the CDC's recommended distance to avoid spreading the virus.

Once productions began to shut down, many agents, managers and lawyers received an influx of calls from their clients, all asking the same question: "Am I going to get paid?" The answer isn't so simple. Events of force majeure traditionally give studios a tremendous amount of latitude to make decisions they can say were motivated by an unforeseeable incident. "During a force majeure, your compensation is typically suspended and then after that period, which is usually about an eight-week period, the employer can terminate [the contract] if it doesn't look like it's going to go anywhere," explains Lichter, whose client Niki Caro had her big-budget Disney film Mulan pushed back amid the frenzy. "If we actually get to this stuff, which God forbid we don't, it's going to be a fucking mess."

During the 2007-08 strike, the last time there was a major work stoppage, studios used their augmented power to terminate certain unproductive contracts, and there's already chatter about whether they might do it again — particularly given the eye-popping overall deals of late. "We always knew the Writers Guild strike, should it happen, could be the basis for studios terminating deals," says Jamie Mandelbaum, an attorney who represents several showrunners with overall pacts. "Perhaps the coronavirus will provide the studios with the same opportunity."

For those who aren't under rich overall deals, it's even murkier. Say you're an actor on a television show that suspended production before the season could be finished. Do you get paid for the episodes you didn't shoot? Most dealmakers agree studios would not be obligated to pay for episodes that weren't actually filmed. That's because contractually most actors get paid for all episodes "produced" and studios normally define that as episodes that are in the can.

But just because studios aren't necessarily obligated to pay all creatives doesn't mean they aren't paying. A source says that even though Saturday Night Live has called off its next three shows, NBC has committed to compensating its employees for those weeks. Similarly, Netflix and NBCUniversal, both of which have postponed production for at least two weeks, are keeping their core crew on the payroll to receive minimum call. That may, however, represent a pay cut for some crewmembers who are used to working overtime. Should the delays last longer, sources say it's highly unlikely the studios will continue to pay.

It may only be a matter of time before those two-week delays turn into indefinite ones given the severity of the outbreak and expert forecasts. "The next six months are going to be a disruptive period of time for our industry," says Ryan Murphy's lawyer, Craig Emanuel. That has some folks wondering just how long studios can delay projects without violating contracts. "If we assume this lasts six months, clients, especially actors, will start asking when they can 'get out' of their contracts," notes one rep, who suggests that the union should step in and work out some parameters with studios to clear up some of the ambiguity. "But where the fuck else are they going to find work and remain safe during a pandemic? Are there a bunch of projects hiring actors on the moon?"

Even if the Titanic doesn't sink, the deck chairs are still likely be shaken up by the whole ordeal. It's not yet known whether the Writers Guild's talks with the AMPTP, which were set to kick off on Monday, March 23, will go on as planned or be postponed. But what is apparent is that a wrench has been thrown into any potential strike plans. As one rep puts it, "They're not going to have anything to go on strike about."

Still, others contend the production freeze ultimately works in favor of writers. "Whatever plans the studios had to rush development and script production before the May deadline are shattered," says one TV scribe, who adds that with multiple streamers launching in the coming months, studios have to do everything they can to keep content pipelines flowing. "They need writers working now more than ever, which weakens their bargaining position."

This story first appeared in the March 26 issue of The Hollywood Reporter magazine. Click here to subscribe.