Netflix's Ted Sarandos, Union Son, Says He's 'Super Committed' to Ending the Strike
Earnings season means CEOs will finally address labor issues
Let’s take a wee break from the pickets to talk about how Hollywood is spinning all this strike business to Wall Street.
Netflix released its second-quarter financial report after the closing bell today, kicking off earnings season for the major media and entertainment companies. Arguably, the next month or two of earnings calls will merit more attention than most because we might actually hear some detail on how the strike(s) are hitting studios where it hurts. So far, probably not how you might think.
A strike “is not an outcome that we wanted,” said Netflix co-CEO Ted Sarandos emphatically on the company’s pre-taped earnings call today, but it sure is helping the streaming service’s bottom line for now. Due to “lower cash content spend” than expected this calendar year resulting from the “timing of production starts” and the dual SAG-AFTRA and WGA strikes, Netflix says its free cash flow for fiscal 2023 is now projected to reach at least $5 billion — that is to say, $1.5 billion more than initially forecast. (The streamer also added 5.9 million subscribers during the quarter, a figure hailed as an indication that its password-sharing crackdown and ad-tier offering might be working.) So Netflix isn’t hurting a bit, at least not just yet.
Sarandos, who said he had “very much hoped to reach an agreement by now” with the writers and talent, took care to tell viewers that he is the son of a union man.
“I was raised in a union household,” he continued. “My dad was a member of IBEW Local 640. He was a union electrician. And I remember his local because that union was very much a part of our lives growing up. And I also remember on more than one occasion my dad being out on strike, and I remember that because it takes an enormous toll on your family, financially and emotionally.”
Sarandos went on to say that the AMPTP, which reps Netflix and other major studios and streamers at the negotiating table, still has to tackle a “handful of complicated issues” but is “super committed to getting to an agreement as soon as possible — one that’s equitable and one that enables the industry and everybody in it to move forward into the future.”
When asked how a protracted strike would impact the streamer’s content pipeline, Sarandos deflected, nodding vaguely at its volume of shows and movies, both scripted and not. “It’s beside the point,” he said. “The real point is we need to get this strike to a conclusion so we can all move forward.”
But the conventional wisdom is that streamers will be able to better outlast traditional broadcast networks, given the robust pipeline of shows and films that companies like Netflix are likely to have banked away. Let’s see what Disney and Comcast and the rest of the entertainment congloms have to say for themselves in the coming weeks.
Flatlined
Meanwhile, the County of Los Angeles film office, FilmLA, says that local on-location film production sank 28.8 percent during the second quarter of the year, the sixth straight quarterly decline, notably accelerated by the ongoing writers strike.
“Like all others watching with hope from the sidelines, we are eager to see the studios and unions reopen their contract negotiations,” wrote FilmLA president Paul Audley in a statement to the press. “Much is at stake for WGA and SAG-AFTRA members, and also for the small business supply chain on which future filming depends.”
There are no scripted series permitted to film this week, when there are usually dozens, said the film office. In Q2, feature film production fell 18.9 percent, while shoot days for TV dramas and comedies plunged 63.8 percent and 72.8 percent, respectively.
“The last time production levels were this low, we were in the middle of a global pandemic,” said Audley. “Families and businesses affected then are again being tested today, lending urgency to the moment to sustain creative careers.”
Folks who work in production: If the production you were working on has shut down due to the strikes, what work are you doing to sustain yourself? How has your career been impacted? Do you support the striking writers and actors?
Talk to me: elaine@theankler.com.
Today in Strike News
After complaints over NBCUniversal not allowing picketers to walk on the outside sidewalk due to construction, WGA and SAG-AFTRA filed a labor grievance against the company, claiming that the construction violated the right to picket. (The Hollywood Reporter)
Another grievance levied against NBCUniversal: their newly trimmed trees, which took away shade for picketers in the Burbank heat, and was apparently prohibited due to the company not having been issued a permit to trim the trees. (Deadline)
The clash over the trees even led to a viral outpouring of WGA and SAG-AFTRA supporters and members talking and creating memes about “tree law.” (Dexterto)
SAG-AFTRA has agreed to allow 39 indie projects to shoot during the strike, including two A24 films starring Anne Hathaway and Michaela Coel, and Paul Rudd and Jenna Ortega, respectively. (Variety)
An unlikely source of support for the WGA and SAG-AFTRA: the miners union, which released a statement of support today for the striking writers and actors. (WOWK 13)
Quite possibly the lone winner of the double strike: the WWE. “I mean, silver lining for us, I suppose, you know, it’s a difficult time for the actors and the writers. I believe they’re doing the right thing, asking for what they deserve. I stand by them,” says one of the group’s wrestlers, Seth Rollins. “But it is a fortunate part of not being part of a union that we are able to still perform, and for our audiences and people who may not be familiar, now they get an opportunity to tune in and see what we are all about.” (ComicBook)
Picket Sign of the Day
Don’t mess with the Ents. They might just be outside the Universal lot.
Additional reporting by Matthew Frank.
You think perhaps the strategy here is not wanting to be left behind? These other studios could leave the AMPTP or broker individual, separate deals leaving the streamers holding the bag. That probably wouldn’t be hot news at next quarters report.