Business Affairs Exec: A Studio Negotiator Responds to the WGA Deal
What writers can expect now from the other side, who really won on what points, and what it means for the future volume of shows
A well-known senior business affairs exec, whose previous pieces for The Ankler include Confessions of a Business Affairs Exec and How to Truly Preserve the Writers’ Room, is back to offer his final commentary on the WGA strike, and what it accomplished. This person is anonymous as they are not authorized to speak by their employer; this post first appeared on The Ankler on Oct. 5. The WGA membership ratified its new contract today, Oct. 9.
The whole of Hollywood breathed a sigh of relief — relief from anxiety, and relief from annoyance — as the 2023 WGA strike, the second longest in history, finally drew to a close.
Personally, I celebrated the deal the only way I could after months of compulsively discussing, reading about, and thinking about the WGA strike — by taking one whole day off from discussing, reading about, or thinking about it in any meaningful way, even if that day happened to be the day on which the long-awaited final deal terms were revealed.
Now that we’ve all had a few days to digest, I wanted to come back with one last round of commentary to offer my take, as a negotiator, on three of the big picture questions people are asking about everything we just lived through (and while I’m here, some predictions of how the new deal will and won’t impact the industry in the years to come). Those big questions:
Did the strike work?
Was it worth it?
Who won?
If you’re looking for the executive summary, the answers are: (1) yes; (2) ask your favorite economist, philosopher, or politician if it was worth it, but it definitely didn’t need to be this long and painful; and (3) wrong question, but if you must ask it, we all won or we all lost.
1. Did the Strike Work?
In announcing the tentative agreement to its members on Sept. 24, WGA leadership declared, “We can say, with great pride, that this deal is exceptional — with meaningful gains and protections for writers in every sector of the membership.” They’re not wrong.
The final deal struck between the WGA and the AMPTP was indeed historic in its depth and scope, with the WGA achieving (to one extent or another) virtually all of its key goals, including first-of-their-kind benefits and protections around minimum staffing for TV and high-budget streaming series, “success-based” residuals in streaming, and meaningful limitations on studio-driven use of artificial intelligence in the writing process.
In addition, the new deal extends the system of collectively bargained minimums and residuals to original programs made for non-subscription, ad-supported (AVOD) streaming services. That change hasn’t commanded nearly the same amount of attention — or controversy, given that the DGA made similar breakthroughs in its own deal earlier this summer — as those related to the WGA’s headline issues. But as the streaming ecosystem increasingly embraces advertising in its ongoing search for a sustainable business model, history may find that the expansion of union protections to AVOD was one of, if not the, most consequential changes in this agreement.1
And, while many studio partisans would hate to admit it, the WGA ultimately extracted concessions from the AMPTP that almost certainly could not have been achieved without a meaningful strike. In particular, count me among the many observers who believed that, while the AMPTP would be open to new rules designed to provide writers with steadier work and better training opportunities, it would “never” agree to straight minimum staffing rules. I also strongly doubt that, without a serious work stoppage, the AMPTP companies would have consented to any kind of performance-based residual in streaming (at least not on top of agreeing to such significant increases in streaming residuals more generally).
2. Was It Worth It?
Labor strikes cause economic pain to many, for the benefit of a few. And that widely distributed economic pain isn’t an “unfortunate downside” of such strikes; it’s pretty much the point. Financial harm to struck companies creates direct negotiating leverage for workers who want a better deal. Downstream financial harm to adjacent businesses generates social and political pressures that further enhance that negotiating leverage — as long as striking workers can capture the hearts and minds of those affected third parties, and of the public more generally.2
And more generally, the whole exercise is meant to send the message that, in the grand scheme of things, “doing right by labor” is less costly and painful than not doing so, thereby making it easier for other unions to achieve meaningful gains without the need to resort to strikes.
But this was an exceptionally long and dramatic strike, and exceptionally long and dramatic strikes cause exceptional economic pain.3 The most commonly cited estimate is that the overall economic cost of the strike was about $5 billion.4 The WGA itself estimates that its new deal is worth roughly $450 million more over the three-year term of the deal than the AMPTP’s last pre-strike offer. To its credit, the WGA’s leadership has been gracious in acknowledging the apparent disparity between these figures, as well as the uneven distribution of costs versus gains from its strike. WGA leaders and members have vowed that the union will remember and repay the support shown (and sacrifice borne) by non-writers, and argued that its deal set important precedents that would, in time, inure to the benefit of virtually all of the industry’s workers.
So was it worth it? And if it wasn’t, who do we hold responsible for that collective loss?
Those, my friends, are questions for economists, philosophers, and politicians; not for anonymous business affairs executives. For most people, I suspect the answer will be based far more on how they were impacted personally by the strike, and on how they feel about unions more generally, than on any quasi-objective cost/benefit analysis.
I believe we can, however, directly answer an adjacent question: Did it have to be this long and painful?
It absolutely did not.
For months before negotiations even began, a near-consensus emerged around town that a strike was inevitable. As early as Oct. 2022, this publication referred casually to “the pending WGA strike” — just the sort of widely held presumption that almost inescapably manifests itself into reality. From there, it was a serve-and-volley game of bad moves, missed signals, and lost opportunities, from the AMPTP making a too-conservative pre-strike “final offer” because of that perceived inevitability, to the WGA dismissing the studios’ August offer as a bad faith ploy before it was even delivered and then countering with “everything we said before but one less minimum writer.”5
I could, and in fact did, write a 2,000 word play-by-play breaking the whole thing down, beat by miserable beat. But because there’s no honest version that won’t enflame one side or the other (likely both, repeatedly), I’ll just ask you to take my word for it: Whether or not a strike was “necessary,” they could (and should) have gotten through this a lot faster, and much less messily, than they actually did. 6
3. Who Won?
The question reminds me of a classic episode of The Simpsons, in which Ned Flanders asks Reverend Lovejoy if God is punishing him. “Oooooohhhh,” he replies, “short answer, ‘yes’ with an ‘if’; long answer ‘no’ with a ‘but.’” Looking at the whole thing from the perspective of a professional negotiator:
If you look at the 2023 WGA Basic Agreement negotiations more or less in isolation, the WGA “won.” (If you ask Vox, “they won big.”) The WGA managed to address, at least in part, virtually every issue on its list, from minimum staffing to performance-based streaming residuals to AI protections. The union dominated the press and social media wars, which the studios seemed to wage first uninterestedly, and then inartfully. Although doubtlessly a compromise, the final negotiated deal looks a lot more like the WGA’s demands than it does like the studios’ final pre-strike offer, and includes concessions that most insiders and observers — myself included — thought were not winnable, especially on the issue of minimum staffing.
Taking a broader view, however, things are more complicated.
Just like every other new collective bargaining agreement, the historic changes embodied in the 2023 Basic Agreement will be distilled into a new set of production and dealmaking norms designed to maximize the studios’ efficiency (as they understand it) in the deployment of their budgets.7
But all of this deal engineering will be dwarfed in its impact by some very significant, unpleasant, and inescapable realities of the years to come in this industry.
Virtually everybody seems to agree that the 599 scripted comedies and dramas produced for the U.S. market in 2022 represent the true “peak” (finally!) in “peak TV.” As entertainment conglomerates continue to agglomerate, and also-ran streaming services fold (or fold into their competitors), the question isn’t if the overall volume of series production will decline — it’s by how much. Although it will take years for the industry to re-equilibrate, I expect that the long-term carrying capacity for a healthy and sustainable TV/streaming ecosystem is 300 to 350 scripted series per year — a decline of 30 to 40 percent from the high-water mark of 2022. It would take a better mathematical mind than mine to measure the overall impact, but the decline in development and production volume will certainly — and dramatically — offset many of the WGA’s meaningful gains in wage minimums.
At the same time, now that Disney and Warner Bros. Discovery de-platformed several high-profile but sparsely watched productions from their services — thereby shattering the streaming industry’s previously-prevailing (if naïve) norm of universal permanent content accessibility — studio-streamers desperately in search of profitability will undoubtedly continue to prune their platforms of original content that they do not believe meaningfully contribute to their acquisition or retention of subscribers. In other words, all of those increased residuals won’t be paid at all on projects that are removed from streaming services altogether because their low viewership can no longer justify the cost in residuals from preserving their availability.
And while the WGA deserved every ounce of protection it secured against the threat posed to the writing profession by artificial intelligence, I share the opinion of actress and computer scientist Justine Bateman, who has compellingly (if depressingly) argued that A.I.’s true disruptive force will be unleashed not by the studios — whose leaders, despite the pernicious influence of Wall Street and Silicon Valley, retain some romanticism about filmmaking as an art form — but by companies like Microsoft, Google, and Nvidia, which have no connection to the history of the medium, no institutional relationships with the creative community, no union sympathies of any kind, and no substantial economic stake in the traditional industry to protect.
To be clear, none of these dire developments will have been caused by the writers, or by the substance of their new collective bargaining agreement. This strike happened because this is our collective near-future — not the other way around. But we can also wonder whether the deal struck by the WGA was one that optimally positions it for the challenges to come.
Now, for those of you who would like to join me out here in the weeds:
a. Minimum Staffing
The Basic Agreement’s new minimum staffing rules require at least three writer/producers (including the showrunner) for series orders up to six episodes, and staffs of at least five writers (including no less than three writer/producers) (including the showrunner) for orders of seven to 12 episodes (representing the lion’s share of “premium” TV production), with exceptions for the Mike Whites and Taylor Sheridans of the world. The mere fact of minimum staffing is a huge emotional and political win for the WGA. But the minimums are largely in line with prevailing norms today, and are unlikely to meaningfully change the typical composition of writers’ rooms. The union has argued that these minimums were necessary to avoid further deterioration in staffing practices. I’m not sure if that’s true. But I also know that minimums have a way of becoming maximums, and that many savvy studio negotiators welcome generous collectively-bargained minimums as a benefit to their work. In the long-run, I expect the less-celebrated requirements that writers on post-greenlight rooms be employed for at least 20 weeks, and that high-budget streaming shows produced in the United States and Canada employ two writer/producers (on top of the showrunner) for the full length of production, will prove to be much more impactful to the careers of individual writers and to the health of the profession. And I wonder if the WGA could have achieved other, less sexy, but perhaps more meaningful gains, which in the long run would have better served the interests of its membership, had they not rallied around and so completely committed themselves to the demand for minimum staffing as such.
b. Streaming Residuals and Data Transparency
The WGA secured substantial and essential gains in streaming residuals. They absolutely had to. But increased residual costs increase the incentive for platforms to remove underperforming series and films to avoid bearing the cost of their continued availability. There is no blame or fault inherent in that statement. It’s basic economic reality — just as it was basic economic reality that the increasingly felt impact of increases to streaming residuals that were negotiated as part of the 2020 Basic Agreement informed Disney and WBD’s decisions to remove content from their platforms (especially high-budget shows still in the costliest early years of their exhibitions). The WGA’s hard-won “viewership-based streaming bonus” will rightly reward creators for generating outsized value for the companies they work for. It will also put additional strain on the companies’ hunt for profitability in their streaming operations, further incentivizing de-platforming of less successful projects. I don’t know how best to balance those competing interests, but I think it’s important to acknowledge that they exist.
And as the industry exits an era of reckless expansion and enters one of universally expected contraction, I wonder if some of the negotiating capital spent on these issues might have been better dedicated to securing more evenly distributed benefits, such as minimum availability requirements in streaming to protect against de-platforming during the highest-value early years of each project’s run. Meanwhile, the ideological passion and negotiating energy dedicated to data transparency — an issue on which the union achieved very limited gains, and which could have been (and to a great extent actually was) de-coupled from the success-based residual — could have been reserved for 2026, as the growing prevalence of advertising in streaming increases systemic pressure on the industry to share enough information to support a robust ad market.
c. Long-Game Negotiation
But I can also understand the load up on issues during this cycle, even as fraught as this negotiation already was, rather than deferring them to a future negotiation. I don’t expect 2026 to offer any of the same drama or conflict. I also don’t expect it to offer any meaningful gains for the WGA, or for any other union — the industry will still be on the rocky road to a sustainable post-cable bundle digital future, the studios will still feel burned by the WGA’s scorched earth approach to the 2023 negotiation, and a still-financially and emotionally exhausted talent community will likely have little appetite for another major work stoppage.
While some writers who read my analysis may doubt this, in most respects, I’ve been rooting for the writers in all of this since Day One. And I think they’ve gotten a really strong deal that they can be truly proud of, and that their collective sacrifice has been rewarded in very real ways. But I think they spent two collective bargaining cycles’ worth of negotiating fuel to do it.
So After All of That: Who Won?
If I didn’t answer that question, it’s because it was always the wrong question to be asking. The best negotiators realize that there’s no such thing as “winning a negotiation” or “winning the deal” — or at least, that it doesn’t mean what people usually use it to mean. Deals happen because both sides believe they’re better off making a deal than not making one. Frequently, those parties will have to negotiate and make a deal again in the future. Even if they don’t, in our industry, the negotiators who represent them will.
“Winning the negotiation” isn’t about somehow beating the other side — it’s about making a deal that’s good for both sides, not leaving anyone feeling burned, and being right about everyone being better off for having made it. And when it comes to a negotiation this consequential for the entire entertainment industry? We all won. Or none of us did. And it’ll be a few years before we know for sure.
To get a sense of how essential and how impactful this change really is, consider that Jury Duty — one of the breakout hits of 2023 — was not subject to any minimums, and will not generate any residuals for its creators, because it was produced for Amazon’s non-subscription, ad-supported Freevee service rather than for its core subscription-based Prime Video offering.
This strategic reality lends a lot of context to the ferocity of the WGA’s media campaign over the course of the strike, as well as its active courtship of other unions and labor leaders (both inside and outside of the entertainment industry), and its public positioning of the writers’ strike as part of a broader movement against economic injustice arising out of the general Wall Streetification/Silicon Valleyfication of the American business world.
For the AMPTP companies (whose businesses have also been hobbled by the concurrent SAG-AFTRA strike), that has meant everything from a spate of “withdrawn” series orders and renewals, to much-needed theatrical tentpoles that either grossly underperformed in 2023 or were painfully pushed to 2024, to a hobbled (at best) 2023–24 broadcast season and (probably) 2024 pilot season, to nearly six months of (mostly) declining stock prices. For the rest of the entertainment industry (and the broader California economy), it has meant widespread layoffs and furloughs (often borne primarily by the most economically vulnerable), and nearly half a year of virtually nonexistent revenue for countless small businesses that supply or otherwise rely on the industry.
I have, from difference sources, seen this estimate presented as the cost to the California economy, and as the cost to the American economy (taking into account other production hubs like New York or Atlanta).
The whole centimillionaire CEOs with tone-deaf sound bites in exotic places thing didn’t help either, but it generated a lot more attention and outrage than it deserved (especially considering that most studio executives weren’t exactly die-hard defenders of their boss’s boss’s [boss’s] exorbitant salaries).
And a pox on both their houses.
This was basically the story behind my first piece for the Ankler, which explored how the industry’s turn toward smaller writers’ rooms and shorter work periods was a natural consequence of how studios implemented new “span protection” rules created in the 2014 WGA Basic Agreement to address the then-prevailing problem of pay dilution for writers working on streaming series with ever-shrinking episodic orders. I say this without any intended moral or political valance, but to paraphrase Jeff Goldblum in Jurassic Park: BA finds a way.