One Down, A Long Way To Go For Hollywood After WGA Strike Deal

The sighs of relief and celebration was palpable across much of Hollywood after Sunday night’s announcement of a tentative settlement of the 156-day strike by the Writers Guild of America, but the town remains in turmoil, with many challenges still looming.

In fact, it’s possible many of those who went on strike and, according to initial reports, won significant concessions from the studios may come back to find their jobs are still in danger, or just plain gone.

As it is, actually adopting the tentative deal will require a few more weeks of work before it becomes official. First the governing bodies of the WGA’s East and West units will need to sign off, likely in the next couple of days. Materials outlining the deal particulars (which still haven’t been released) will need to be prepared and distributed to union members for a ratifying vote, a process that will take another two or three weeks.

At some point after ratification, we’ll see a flurry of announcements of projects and deals that were agreed upon during the strike but held back. For instance, Disney Entertainment Group Co-Chairman Dana Walden will finally get to officially welcome back prodigal super-producer pal Ryan Murphy from Netflix
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.

And everyone who can will start reassembling the production teams for projects that have been on hold. Everyone, that is, except the actors, who are still on strike, which means that no filming can restart for many affected projects.

The writers return does mean that late-night talk shows and topical comedy news shows such as HBO’s This Week with John Oliver can resume. Who will actually be guests on those shows is another pressing question, however.

With the actors still out, and forbidden from promoting any projects with struck studios, the writers for Jimmy Kimmel, Seth Myers and Steven Colbert may have to do extra duty filling the entire show without benefit of appearances by stars shilling their upcoming shows.

Beyond that, it’s not clear what the situation will be like for employees returning to The Tonight Show with Jimmy Fallon after its star was roasted last month by numerous current and former workers for creating a hostile work environment.

The good news about the WGA deal is that it provides what could be a framework for settling SAG-AFTRA contract concerns such as the use of artificial intelligence and payment of residuals on streaming shows.

But the actors have a number of their unique contract issues that won’t easily succumb to pattern bargaining. Worse, the two sides aren’t talking for now. With the WGA in place, perhaps those talks will restart with more momentum.

Beyond all of this, there’s plenty of reason for continued angst among creative professionals in Hollywood as it lurches through a transformational inflection point, away from broadcast and cable TV and theatrical exhibition, and toward direct-to-consumer streaming services.

All the services have been reducing their Peak TV program orders, cancelling some projects and mothballing finished ones to save millions of dollars in residuals payments, or to take advantage of tax write-offs.

Worse, not all the big streaming services now in the market are expected to survive over the next few years, with a coming wave of consolidation expected.

Already, Paramount
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Global has stripped Showtime to a husk, and mashed its streaming programming on top of Paramount+.

Warner Bros. Discovery
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has done something similar, if less drastic, in layering all of the Discovery+ programming onto the renamed Max alongside HBO, DC, Warner Studios and other scripted programming. Discovery+ remains a separate service, with a few million subscribers, but seems likely to go away eventually too.

Expect more such compression of services within individual companies, to save marketing, operations and programming expenses.

At some point, the media companies may start buying each other again, especially after dealmaking restrictions in the Reverse Morris Trust that created WBD expire next spring. WBD is considered a prime target for either a buyout or perhaps even to do its own acquisition of a competitor.

And no need to wait for spring at Disney, which is already looking to spin out ABC and other legacy broadcast and cable operations. CEO Bob Iger is also seeking a partner with distribution and content chops to shoulder some of the cost of running ESPN, possibly as a standalone company with or without the linear operations included.

All the media companies are also vulnerable to what’s likely to be a wave of closures of smaller cable services. The Disney-Charter carriage deal announced earlier this month allows the cable provider to drop eight Disney networks, including Freeform, from its lineup.

Other cable providers are likely to follow suit when their Disney carriage contracts come up for negotiation. And Charter and the rest of the cable industry will almost certainly seek similar reductions in the number of cable networks they must carry from all the Hollywood studios.

Wells Fargo
WFC
analyst Stephen Cahall estimated more than two-dozen cable networks from the big studios are vulnerable to losing carriage, which will cost both lucrative carriage fees and ad dollars, and eventually lead to their closure.

Fox and Paramount are particularly vulnerable as cable providers look to shrink their fee payments, Cahall suggested. While programming from those networks may continue to appear on the studios’ streaming networks, it likely will also lead to fewer shows being made.

And beyond all this, will bad feelings persist after a contentious strike featuring harsh social-media posts and often nasty language?

A decade ago, I worked with Nikki Finke, whose vituperative in-the-room coverage of the 2007 strike helped launch her insider news site Deadline, now part of Jay Penske’s vast empire of entertainment news outlets (Variety, Hollywood Reporter, Rolling Stone, IndieWire, etc, etc, etc).

Finke always brought plenty of acid to her pen when writing about the industry, though these days, even her pungently expressed opprobrium might seem a tad tame compared to some of what oozed across screens amid the strike’s months of bad feelings.

Beyond the Jimmy Fallon issues, the talk shows by Bill Maher and Drew Barrymore also may face lingering blowback for attempting to restart their talk shows (which were not covered under the WGA contract) before a deal was made.

Perhaps most dismaying of all for those who think that the entertainment business is finally climbing out of a deep hole, whenever SAG-AFTRA resolves this strike, there are more opportunities for labor unrest just ahead.

Looming close are other SAG-AFTRA contracts that will affect different segments of entertainment, such as voice actors in videogames. And next year, we still have the IATSE and Teamsters unions contracts expiring. They represent behind-the-scenes workers in the industry such as truck drivers, cinematographers, publicists, and electrical workers.

So don’t exhale too much just yet. We’ve got a long way to go in reshaping Hollywood for its streaming future.