This story originally appeared in The Ankler.
Here we are approaching the crossroads. Twelve days left until a walkout. If anyone doubted that the writers were willing to go down the road, let the 97.8 percent authorization vote dispel that.
Now the real works begins, or could begin. Writers like showdowns and in the past round, these final days were when the deal came together. Last time, agreement seemed completely impossible right up until the minute it happened. Could the same happen again? Now that the studios know that the strike has been authorized, might they place a decent offer on the table? Might the Guild feel that whatever is on the table at this moment is likely to be as good as it gets and take it? Anything is possible.
But from all we know and have heard, the studios are not about to concede very much and the writers aren’t going to walk away empty-handed. And a DGA and SAG negotiation is waiting in the wings to boot. So here we are.
A walkout now seems extremely likely, so we can skip ahead a bit and start toying with the question: where and how would it end?
From senior-level conversations around town, my most likely scenario remains:
It will be a relatively brief walkout (six to eight weeks), followed by something offered that’s good enough so the writers can declare victory and accept. Here's my current official Ankler betting odds on the various scenarios:
No strike - 15 percent
Very brief strike (one to five weeks) - 25 percent
Moderately brief strike (five to 10 weeks) - 40 percent
Long strike (more than 10 weeks) - 20 percent
It's that last possibility, the one that no one wants seems to talk about, that I want to give a hard painful look at today.
BREAKING POINTS
Wars occur because two or more nations believe they hold a hand good enough to force concessions from opposing nations. Everyone goes into a war thinking they hold the keynotes to victory and in the course of battle, it turns out that many of them were wrong about that.
Right now, as they stare each other down across the table, both the studios and the writers seem to feel they hold an unbeatable hand. Suggest otherwise and you'll be met with scoffs and/or social media ire and high dudgeon.
But one side is wrong.
More to the point, each side would like to believe it stands together, firm and immovable for all eternity, come hellfires or the afflictions of Job himself.
But everyone — be they individual, entertainment conglomerate or trade guild — has a breaking point. Should this turn out to be a long strike, the question will be whose breaking point is further away? Or which side’s breaking point will be brought closer by the plagues brought by a strike? Let’s walk through the stressors and issues to come:
I. Clock Keeps Ticking
First of all, our countdown to the abyss aside, expect this thing to go a bit longer past the May 1 deadline. Now that the vote has come in, the studios will likely bring forward what they see as their best offer at this point. And either because they are actually making progress in the talks, or because they want to look like they are trying everything to avoid a strike, both sides will likely extend the contract for a bit (a couple weeks maybe). As the tensions mount.
II. Unity at Dawn
There's no question of zero resolution at the starting gun. The writers, as mentioned, voted by a 97.8 percent margin to authorize a strike, offer on the table unseen. (This vote tops their previous record set in 2017 of 96.3 percent.)
Meanwhile if there is any divide in the studio ranks, that division hasn't made a peep yet. Some, starting with me, have speculated that the inherent differences between the streamers and the legacy studios would create a divide under pressure and that may yet be how this plays out. But there's not a lot (or any) evidence of that at this point.
And there's also, it should be said, not a lot of evidence that the studios are freaking out at the prospect of a strike. Agents that I've spoken to have uniformly reported that there is no mad rush to stockpile scripts, no sense of panic to race scripts into production as was seen for months before the 2007 strike.
Both sides march into battle in good order — unified (for the public benefit anyway). So on which side does that unity crumble first? To put it another way: whose side is time on?
III. The Thrill of Battle
At the onset of combat, both sides typically feel an exhilaration bordering on euphoria.
The writers, perennially aggrieved by their powerlessness in the industry, will witness the spectacle of their thousands bringing Hollywood to a standstill in mass protests, celebrities paying homage to them — stopping by the picket lines with quinoa bowls and fresh-pressed collagen smoothies for the marchers.
For the studios, there will be the relief when and if their stocks don't crash at the shutdown. Some stocks might even get a bump from investors anticipating a short-term increase in profitability thanks to the savings from production shut down. With a stock bump, Wall Street could effectively give the studios a strike fund to help carry them through.
Analyst Rich Greenfield laid out this sobering perspective yesterday:
If an extended WGA/AMPTP strike occurs, it could lead to notably better than expected streaming profitability across the streaming landscape. The two stocks that would likely benefit the most are WBD and PARA, given investor focus on the balance sheets of both companies.
It’s worth noting that while a prolonged strike could boost earnings and free cash flow in 2023 while depressing 2024 to some degree as production ramps back up, it is possible that some content originally slated for 2024 gets pushed to 2025 to make room for delayed 2023 content — yielding minimal impact on 2024 earnings/free cash flow.
Thus speaketh Wall Street, at least at first.
IV. Force Majeure
Of the memories that haunts from 2007, the mass use of force majeure clauses to mass terminate contracts across the industry still rattles survivors of the era. Looming over the strike plans has been the expectation of mass slashing at the outset.
However, the FM playbook is a little trickier this time around. As a result of 2007, some contracts have had longer time periods put in before FM could be invoked. Some have clauses specifically stating that strikes or work stoppages don't count as FM events. And some have clauses stating that you can't break a contract because of a strike; you can only suspend it, with the stipulation that the employee must be rehired when the strike ends.
Before you breathe too big a sigh of relief on this one, however, there is a big "but" on the above — which is that by and large, those more precise, strike-proof contracts have only been negotiated by those close to the A-List with a decent amount of leverage. For those who made deals under a standard off-the-shelf contract or something close to it, their FM clauses are still likely available to be invoked.
However again, the irony of the disruption of the past decade it's that a lot fewer are living under overall deals these days then were in 2007. Back then, anyone who could write their name or get a business card printed saying "Producer" was handed a housekeeping deal the minute they got off the bus from Topeka. Now, far fewer live that way, to say the least — which is part of the discontent that led us to this place.
V. The Directors
A big question mark has been what will the directors do after the walkout?
The narrative that has taken shape about the directors in the lead up here is that they are sort of WGA Jr., that their decision to delaying their own negotiation until May 10, after the writers’ deadline meant they are planning to sit back, cheer on the WGA and after their victory ask if they can have one of whatever the writers got.
Writers and studios both may not want to be so sanguine about the directors' plans. The directors have their own issues and their own needs for negotiations. They also, is my sense from conversations with their members, are equally determined to make some progress in their agreement, even if they are less combative in their approach on that. Their issues are also very different than the writers’ (more about this to come), so it's not a question of just letting the writers do it for them.
The directors stepped aside for now, but imputations that they have promised to stay in the bleachers until the writers are done are wishful thinking rather than any stated policy of the DGA.
A big thing to watch after the writers go out: do the studios make a serious offer to the directors to try and settle with them first, leaving the writers standing alone on this?
The clock is ticking on that too, however. The directors' agreement expires just a month after the writers. If the directors follow them to the picket lines, the actors — big noisy people with big followings! — follow a month later, and would likely follow the other two guilds' lead and then you have the whole town walked out and a Category 5 hurricane blowing down Barham.
If however, the studios can make a deal with the directors, and leave the writers alone at the gates, that's a much more manageable problem.
VI. Turncoats
We've talked about this one before. On the studio side, you've got very different companies, doing very different sorts of businesses who do not necessarily wish their competitors well. For the moment, the studios all seem united in a sense that this strike doesn't do them any terrible harm at the outset and might do them some good. Not to mention, a determination not to start a process of wholesale massive increases in spending for all the workers at a moment when keeping costs down seems to be the priority for just about everyone.
As the strike drags on, the writers must hope that their different needs and different financial capacities create ruptures on the studio side, driving them back to the table.
But the writers' side is a much more complex group than is often painted. There are the divisions between the employed and the less-employed; between the showrunner class who act as management in many ways as much as the studios do and the rank and file; between the TV writers and film writers — the latter of whose interests you don’t hear too much about these days.
Again, for now, the WGA public solidarity is pretty absolute, but as this drags on, there's room for internal tensions on both sides.
VII. Programming Options
In the 2007 world of cable TV, the production and distribution questions were fairly straightforward, as was the timeline for the networks and studios to start feeling the pain. This time, it's not quite so simple.
As you may have heard, this all happens in the middle of the Streaming Wars, which mean each studio has been producing more than it ever imagined possible a few years ago.
At any given time, any one of these studios has more shows in the can than it will ever know what to do with. The current strategy has just been dumping them all at once, year-round. So a slowdown might give the overlords an opportunity to… space things out a bit. Which also gives their services a lot more time before they start to feel the bite.
Then there are the reality shows. You might have caught the fracas over the Love is Blind finale this week. Believe it or not, there is an audience for these.
There's also overseas production, which could keep pumping although I'm told the idea that streamers can move more production overseas is overstated as the production facilities of the world are already churning at capacity, and not just waiting for the incredible privilege of making your American show.
And then there are all the shows where the scripts have been turned in, sitting on the shelf or on the runway. And if you think that the streaming companies are losing sleep that the quality of some of their shows may suffer if they just throw these scripts into production, then you haven't been watching your streaming services for the past few years. The horse has left the barn on the notion that streamers will let nothing but the highest quality entertainments fill their airwaves.
Question is: does any of combination of the above have an impact on subscriptions? The moment it looks like it might, you can see the studios suddenly getting very nervous, very fast. But there's a long road ahead to get to that place.
VIII. Public Opinion
On one hand, there's never been a better moment to push back on the devastation wrought by the tech disruption.
On the other, there's never even been a slightly successful boycott of a FAANG company, despite every kind of infraction and issue. It takes a big leap to believe that the first global mass activation is going to spring up over the plight of… Hollywood writers.
In fact, look forward to backlash against the writers from MAGA and MAGA-esque quarters, and attempts to transform this into another front in the culture war. Writers would be very well served to resist their temptation to go down that road. Keep it focused on the issues at hand — it's hard enough to sell those.
The writers traditionally have been their own worst enemies when it comes to make their case to the public, reaching for the Norma Rae card at every opportunity. But they have real grievances here that are understandable and can be communicated if they can put a lid on the grandstanding and stay focused. "It's becoming impossible to sustain a middle class life for writers working in Hollywood today." That is all you need to say.
Don't expect the public outside of the industry to stay focused on this however. It's a big story for us, but before the first week is out, the country will experience a dozen more debacles, horrors and outrages. The spotlight does not stay still.
In the End, it’s Who has Higher Pain Tolerance
This is the big one: if this goes long, which side has the bigger capacity to absorb pain? Has the itinerant lifestyle of the streaming age taught writers to go without for long periods (with some, if Twitter is to be be believed, going on food stamps)? Have the studios inadvertently trained a pre-hardened strike force? We shall see. When some writers going through this for the first time discover their landlords don't accept hashtags as rent payment, things could get real, as they say, and the pain will not be spread around equally in the ranks.
The studios in theory could wait this out for quite a while. But in the end, this is a crazy, difficult business to be in. With a potential economic downturn ahead — and its attendant wave of unsubscribes — it's not a great moment to just be shutting down a good portion of your business, whatever the savings are. That might be fun for awhile but sooner or later you've got to get to work. And in the end, the solutions only take money.
Which is why the moderate strike remains my most likely prediction here. Question is: what do studios put on the table then, and after a couple months in the cold (or the heat), how ready will the writers be to accept what's offered?
To my writer friends, I apologize for being a bummer in this one. As I've written multiple times and more strongly than anyone else in tradelandia, your demands aren't just important — I believe the future of our mission of high-quality culture and entertainment depends on the writers stopping the drift of recent years, and that if this ends without major improvements, then the path to Babylon lies before us.
But forewarned is forearmed. The studios are not going to crumble after they take one look at some hashtag dance parties on their sidewalks. They have the capacity to see this through for quite a while. What the writers are doing is important enough for them to look the threat of it in the eye and steel their resolve knowing this won't be easy.