WGA/SAG-AFTRA 2023: End-of-Summer Update

We’re at the end of Summer with the start of Labor Day Weekend, we’re well over 100 days into the WGA strike, and we do have some developments since both strikes began. But before I get to that, I should cover what hasn’t changed.

It’s still a puzzler as to why the companies haven’t settled considering what is being asked.

AMPTP, the group representing the companies (both the traditional studios like Paramount and the streamers like Netflix), is not faring well in the court of public opinion in regards to this puzzlement, probably because the math is not on their side. The last double strike over 60 years ago (when the WGA and SAG struck at the same time) established much of the structures of residuals as well as pension and health benefits that current members rely on today. In the past few months, the story has been told and retold about how every new technology/distro (e.g. cable TV, DVDs, now streaming) has led the companies to try and save on said residuals (“it’s a new, untested technology!”). And all of this storytelling has been in service of countless individual anecdotes of how abysmal streaming residuals are under the current model. Actors and writers are posting images of checks amounting to varying pittances.

(There has also been a banner example with the premiere of Suits on Netflix, the series being viewed for billions of total minutes, and the writers of said series getting, collectively, the non-princely sum of about $3,000 in residuals for that success).

Essentially, the actors and writers are arguing for the right to make a living doing their jobs, making an unremarkable living being unsustainable with the current streaming compensation model. And that argument is resonating. Indeed, Inkoo Kang in an insightful piece for The New Yorker notes that the unions seem to be more interested in keeping the industry healthy than the companies. And Kang isn’t the only one wondering. The companies are making billions of dollars and the increased residuals are fractions of a percent of those profits as the WGA pointed out this past week in a chart.

Now, it is important to point out that the WGA chart is listing, as far as I can tell, the gross revenues made by the companies, and these percentages are percentages of gross revenues the companies would pay in addition to any existing compensation. So the chart is not showing the net revenues nor how much the gross revenues are already reduced by the current labor costs. I mention this because, I mean, you gotta have figured out that I’m on the sides of WGA and SAG-AFTRA by this point, but it’s not like they’re above a little bit of hyperbolae in their messaging. However, lest you start weeping for Warner Brothers, remember these are publicly traded companies. You can get their net income easily. Here, for instance, are Netflix’s financials from earlier this year. They have money to spend on increased labor costs. They all have money to pay for, say, increased labor costs to match inflation. As Kathleen Sharp mentions in The Guardian, the companies can afford this cost of doing business.

If the AMPTP would accept the WGA’s proposal of 6%, 5% and 5% increase in wages and base residuals over three years, it’d cost the studios about $500m a year – or 0.5% of the $210bn revenues they collected in 2022. Bean counters call that a rounding error.

Kathleen Sharp

As I mentioned: puzzling.

So, what’s changed? Well, the WGA and AMPTP sat down to the negotiation table last week, which quickly led to AMPTP releasing their offer publicly, which the WGA then characterized as a ham-handed attempt to force the membership to demand a deal (it has been over three months striking, after all). As the WGA pointed out, they got buy-in from their membership about the issues to strike over before they even called for authority to strike. The result of last week’s shenanigans has been a stall in talks and no end to the strikes in sight for the WGA — and per Fran Drescher, SAG-AFTRA isn’t about to throw in the towel either.

If you’ve read this far you may also be interested in John August’s latest strike update which has a good roughly seven-minute audio summary of current events and some useful links.

Alas, I only have good information, not good news at this point. We’ll have to wait to see if there is any movement on negotiations. We already have to wait for the next installment of Dune.

I blame the Harkonnens.