What I’m Hearing: A WGA Setback & Chris Rock’s Revenge

Good evening, and welcome back to What I’m Hearing. Some new info and analysis tonight on the Writers Guild’s recent moves, a topic that seems to be dominating conversations around town. As always, if you’re not a Puck subscriber, click here to join the What I’m Hearing community. But first…

Thursday Thoughts…

Chris Rock has dropped plenty of Will Smith bombs during his recent stand-up tour, but I’m told he’s saving a few headline-making zingers about The Slap for his live Netflix special, set for Saturday at 7 pm pacific. (If he does the Jada joke that he’s tested on the road, Twitter will go nuts.) On Feb. 17, Netflix did a full run-through of the show, its first global live event, and the tech worked. With plans for live competition results, events like the SAG Awards, and, most believe, eventually sports, the Rock special may end up being a high-profile milestone in the history of Netflix. And he’s making $20 million. Not bad.

Final Oscar voting begins today, so here’s my only plea to all the voters in the WIH community: Please try to avoid the groupthink that leads to the same expected winners on Oscar night. A few genuine surprises would be so great for the show (and the Academy’s reputation).

Paramount Global owner Shari Redstone may come to regret not accepting the $3 billion-plus offer for Showtime that reportedly came recently from David Nevins and P.E. firm General Atlantic. After all, Paramount in its entirety is worth less than $15 billion these days, and Showtime is essentially being killed—sorry, subsumed and marketed as Paramount+ with Showtime. Imagine how many Taylor Sheridan shows for P+ they could have made with that $3 billion.
Yes, that was Christopher Nolan hosting an employee screening of Chariots of Fire on the Warner Bros. lot on Tuesday with studio heads Mike De Luca and Pam Abdy, part of their monthly series. The same Nolan who publicly blasted his longtime employer’s day-and-date release plan for 2021 movies and then took his talents to Universal for this summer’s Oppenheimer. Nolan isn’t exactly boycotting Warners—he’s used studio facilities and has been spotted in the commissary since the feud erupted—but the screening suggests that De Luca and Abdy want to leverage WB’s new theaters-first mantra to win Nolan back.

Speaking of Nolan, Universal is really hoping Oppenheimer can secure a China release, as each of his recent blockbusters has. (Even Tenet, which opened in Sept. 2020, grossed $66 million there.) One potential problem: Nolan’s publicist, Kelly Bush Novak, was quoted saying “fuck China” in a 2021 interview. Will the Chinese government punish Nolan? Uh… Remember, Universal’s F9 star John Cena had to apologize just for saying Taiwan is a country.
Box office over/under: Turns out the Rocky franchise doesn’t need Stallone. Creed III is tracking at about $38 million, plenty above the $29.6 million and $35.5 million three-day debuts of previous Creeds. I’ll take the over, based on strong reviews and IMAX upcharges.

A Hollywood Writer Strike Setback?

The departure of the WGA’s fiery, feared chief negotiator and a key omission in the union’s demands raise questions about its leverage at an uncertain moment for the new streaming economy.

MATTHEW BELLONI

I hear criticism sometimes that I reduce Hollywood to a big sporting event—winners, losers, and who’s outplaying the other guy and girl. Maybe, but I can’t be alone in equating the Writers Guild losing its chief negotiator to medical leave three weeks before the start of the most important studio talks in a generation to, say, the Lakers losing LeBron James to injury amid a desperate final push for the NBA playoffs. That’s not to minimize WGA West executive director David Young’s undisclosed personal situation, which I really hope isn’t serious, or the stakes here. LeBron and the Lakers get paid about the same and work under the same conditions regardless of the outcome. The writers? Not so much. A negotiation beginning on March 20 could determine the playing field for thousands of WGA members for years to come. But both of those setbacks happened this week, and the sudden loss of these star players could impact their respective team’s fortunes in material ways. I know that Young is controversial—hated, even, among adversaries and within certain quarters of his own guild. The career labor negotiator has been the red-faced, scorched-earth, bulging-veined screamer of the Writers Guild since he was promoted to executive director in 2006. This is the guy who led the guild into that 100-day abyss in 2007-08, and who, in 2019, summoned the heads of the biggest talent agencies into what they thought was a negotiating session for a new agreement but instead turned into an inquisition of “racketeering” in their TV packaging practices—which foreshadowed the events a few days later, when the guild sued the stunned agencies and cut ties until they acquiesced. (They did.) Even among a couple of working writers that I talked to this week, there was hope that Young’s understudy, Ellen Stutzman, the more measured 17-year WGA bureaucrat, would have a better chance of reaching a deal with studio-side lead negotiator Carol Lombardini without a work stoppage. It’s 2023, maybe the guild doesn’t need a screamer to make its case.

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But there’s a reason that the WGA pays Young nearly $900,000 a year, more than double anyone else at the guild, to lead these talks. Nobody does anything in Hollywood unless they’re afraid, and he’s set a fear-based tone and cadence, if not the actual agenda, for these negotiations. Young has established authority with the studios via fiery speeches in those bargaining rooms that make clear he can push a button and shut down the town. And, perhaps most importantly, he’s got credibility with the guild leadership—a group of hardliners that includes WGA West president Meredith Stiehm, past presidents Chris Keyser and Patric Verrone, and all those angry members of the negotiating committee who won their positions through tough talk of finally standing up to the studios. The fear I’m hearing now isn’t that the AMPTP won’t listen to Stutzman, it’s that her influence over her own board isn’t proven yet, and that could hamper the writers—and everyone who depends on a functioning entertainment business—at a crucial moment. We’ll see. There’s been a positive reaction to the “pattern of demands” that the leadership sent to members this week outlining priorities, at least according to the people I surveyed. Ballots are due on Tuesday, well ahead of the May 1 expiration of the current contract, and the demands are expected to be approved by the guild’s 10,000 or so members. The union priorities are pretty much what Puck contributor Jonathan Handel outlined a few weeks ago: higher minimum pay; standardized compensation to bring movies for streaming in line with those for theaters; extended “span” protection; regulation of “mini-rooms” and A.I.-created work. All great asks. But I gotta say, it’s disappointing that the guild failed to discuss anywhere in its demands what is perhaps the most important issue of our time: Data transparency.

The Missing Link

When it comes to residuals—those guild-dictated payments for the re-use of work—the metrics for streaming are pretty screwed-up. This stuff gets wonky, but the fact that residuals are paid based on the number of subscribers to the service—not on actual consumption of shows or movies—is silly. And it’s not even global subscribers, it’s U.S. subs. Yes, at a time when global growth is the priority for all these streamers, residuals just kinda ignore the world. Writers on Netflix’s Stranger Things should make more in residuals than writers on Netflix’s one-and-done Teenage Bounty Hunters, just like the writers on Friends made more than writers on Joey. The streaming residuals scheme exists only because the streamers don’t want to share data on who is actually watching. Initially, it was because they didn’t sell advertising. OK, but now they do, so the argument has shifted to not wanting to tip their hands to rivals. I get that; playing poker with your cards face up is a lot harder, so the streamers have kept them close to the vest since they first came to Hollywood—and the guilds and agencies, amazingly, have let them. But why? There’s got to be a compromise that respects the studio privacy concerns while providing enough data so the unions can assess relative value. Why not bake into this next deal a two-year period to examine consumption data under NDAs? That way, before the next negotiation, leaders can assess general values based on real information that everyone has contributed. I’m not the first person to suggest better data in dealmaking; in the WGA’s agency fight, the major players were asked, and ultimately agreed, to share some salary and contract information. I know it comes up a lot. Plus, when writers are hurting so much, I get why they’d rather focus on more tangible issues like minimum guarantees and the abuse of mini-rooms. But data is the foundation of all these payment issues, especially in an environment of vertically-integrated companies where there are very few arms-length deals. And the current state of data availability is bad. Insisting on some level of transparency now would potentially improve the standing of writers forever.

The ‘Recession-Proof’ Myth

If you’re a writer, it’s hard not to look at the current guild situation and shake your head. If not for Covid, this tough negotiation would have taken place in spring of 2020, when Netflix was leading all of Hollywood up the peak of Peak TV, and the writers, as the indispensable sherpas, could more easily lay claim to more of those spoils. But now? Even WGA leaders Stiehm and Michael Winship, in their rallying email to members on Monday, were forced to acknowledge the Great Netflix Correction, referencing “short-term declines in profitability affecting some companies.” Those “short-term declines” are giving studios greater cover to pull out the insides of their pockets like the Monopoly Man, even though the entertainment industry, for more than a century, has always figured out how to grow and thrive every time it has been faced with potentially fatal technological disruption. Still, it’s interesting to look back at the past three major WGA strikes, in 1980, 1988, and 2007-08. All three work stoppages happened right after major stock market crashes and/or economic recessions somewhat similar to the current moment. I asked a couple veterans of the labor wars—including one who was there in ’80 and ’88—and they said it’s probably coincidental rather than causational. After all, there was a recession in 2000-01 and Hollywood guild talks went smoothly. But I do wonder if macroeconomic forces contribute to both sides feeling less willing to compromise. Of course, you could make the opposite argument: That the fear of unemployment and the fallout from an industry shutdown is greater in bad times, and thus could lead to a faster compromise. It’s always kinda been a fiction that Hollywood is “recession-proof,” as the cliché goes, and thus not subject to larger economic trends. Maybe that was true in the early days, when people took solace in the cheap diversion of going to the movies. But in the pay television era, subscription services—linear or digital—are much more tied to economic trends, and Hollywood certainly suffers when the ad market slows, as it has lately. I’ve heard people say that maybe the two sides should coordinate some kind of tolling agreement to let everyone ride out this moment, for the studios to figure out the business model of streaming, and to fight this fight in a year or two when things have stabilized. That seems unlikely, and not very productive for the writers. This fight was already punted once. Now’s the time, even though now—thanks to a fallen leader, a lack of transparency, and a bad economy—is definitely not the best time to fight this fight.

Bonus: I broke down the substance of the Writers Guild demands with Bloomberg’s Lucas Shaw on The Town. Listen here. See you Sunday, Matt Got a question, comment, complaint, or an opinion on the best Rocky/Creed training montage? Email me at Matt@puck.news or call/text me at 310-804-3198.