Welcome back to What I’m Hearing during this historic Writers Guild strike. To help make sense of it all for the WIH community, I’ve brought in entertainment labor expert and Puck contributor Jonathan Handel on a more regular basis. He’ll contribute items large and small, talk to the players, and attend the rallies until there’s a resolution. Say 👋 to Jonathan if you see him.

🚨🚨Before we begin, a contest: Best WGA Strike Sign! Attention writers: The strike is serious, but your strike placards clearly are not. Think you’ve got a particularly witty or biting one? Let’s see it. Respond to this email by 5 p.m. NEXT FRIDAY with a pic of your (or your buddy’s… or anyone’s) amusing sign, and then I’ll put the best to a vote of WIH readers. No names attached; unlike Hollywood, this is a meritocracy, not a popularity contest. I can’t get the winner a mandatory writers room or better foreign residuals, but I can offer a stylish Puck hat to shade you from the sidewalk sun.

Here are my faves so far:

“Here’s a pitch… pay us bitch!”

“Pencils down, middle fingers up”

“You came up with Quibi”

“Nice Tesla! (You’re welcome.)”

“Zaslav’s mom wrote this sign”

And as always, if you’ve been forwarded this email, become a Puck member here.

Let’s begin…

• Paramount’s sunrise/sunset moment: Sometimes news breaks in perfect juxtaposition. This morning, as Paramount Global’s stock was tanking nearly 30 percent after a scary earnings reveal and scary-high content burn, The Information reported that nearly half of YouTube viewership now occurs on television sets, up from 30 percent in 2020. Nearly half. Paramount is, of course, a TV behemoth, home to MTV, Nickelodeon, Comedy Central and other youth video brands that should have transitioned to digital. Instead, Sumner Redstone and his cronies sued YouTube and parent Google in 2006 rather than innovate. Now Sumner’s daughter Shari has few options to salvage the company as YouTube becomes the dominant video service on television.
• Parsing Oscar’s Riseborough rules: As predicted, the Academy issued eight thorough pages of new Oscars campaign rules in response to my reporting on the tactics of manager Jason Weinberg and actress Mary McCormack for Andrea Riseborough. The rules should reduce the harassment of Academy members and the icky-feeling pleas for votes like Frances Fisher’s posts begging people to rank Riseborough No. 1 because others were “a lock.” But now it’s up to members, not always the most media-savvy people, to know the difference between endorsing a movie, which is allowed, and lobbying for votes, which is not. Good luck policing that.
• Revenge of the package fee?: Among the strike-related questions over lunches this week was one from a former TV agent: “Why don’t the studios just use the 3 percent they got from us to pay our clients?” He’s referring, of course, to the lucrative package fees that the Writers Guild banned during its 2018 campaign against the agencies. When studios stopped paying that slice of each show’s license fee—usually around 3 percent—to the agency that “packaged” the show with talent, they didn’t transfer that money to the talent. No, they kept it, resulting in a windfall for the same studios that are now being targeted by the strike. How about the WGA demand the return of that money?
• Who’s getting blacklisted by the Blacklist? The WGA is enforcing strict strike rules for its members—basically, if you ask the guild if something is OK, they’ll say no. But non-members? On Tuesday, users of the popular script-hosting service The Blacklist received a message from the WGA warning that “if a non-member undermines the strike by selling or optioning a script to a guild signatory company… the guilds will not admit them to membership—ever.”

  It’s definitely unusual to receive a union threat from a private company, but Blacklist founder and C.E.O. Franklin Leonard told me, “We recognized pretty immediately, jointly, that it was the right message to share. We stand with the writers.” It’s all part of the WGA’s campaign to prevent strike “leakage;” see also the solidarity expressed by foreign writers guilds. Will Final Draft be next? —Jonathan Handel

• Box office over/under: I know Marvel fatigue is real, but the Guardians of the Galaxy Vol. 3 tracking feels very low at $115 million, considering Vol. 2 opened to $147 million in 2017. Seems like Disney is low-balling, so I’ll take the over.

Usually with the DGA, initial proposal documents are traded, so each side has at least a basic framework of what the other wants. And that usually happens six months before the contract expires. Yesterday, no such documents changed hands, I’m told by two sources familiar with the meeting. Instead, amid the ongoing and nastier-by-the-second WGA strike, Lombardini and Hollander talked only in generalities, and it was atypically chilly, per the sources. (The DGA and AMPTP declined to comment.)

No, that’s not good news for those of us who, perhaps naively, hoped the directors’ negotiation would go more smoothly than the writers’, and that a DGA deal—as well as one for SAG-AFTRA, the actors union that also has a June 30 deadline—could help nudge the writers and studios toward a resolution. “It is a very dark sign,” Jonathan Handel, the entertainment lawyer and guild expert who contributes to Puck, told me when I relayed that news. Of course, if the directors and/or actors also strike, and everything scripted except the Universal Studios tram tour shuts down, we all go sun ourselves on the beach for the summer—and probably longer.

What’s not a surprise is Lombardini’s focus on the DGA, given the studios and writers seem to be occupying different planets. No talks are scheduled between the AMPTP and the WGA team led by Ellen Stutzman, and the typical backchanneling isn’t happening, either. Even today’s public response to the writers, which made decent points in addressing the chasms on issues like streaming residuals and A.I., failed to even mention film residuals, or the data transparency issue… or the revenue from ad-supported streaming services… or… the list goes on. They seemed like pointed omissions—or maybe the studios lacked a writers room to finish the document.

It’s now pretty clear that the AMPTP strategy is to let the writers stomp their feet on the sidewalks and on social media for a couple months, throw some tantalizing concessions at the DGA and SAG-AFTRA, and then use those deals as a cudgel to beat the writers into submission sometime in July. The problem, of course, is that Hollander and his SAG-AFTRA counterpart Duncan Crabtree-Ireland know this is the strategy—in part because picking off the DGA is exactly what the studios did 15 years ago. So the directors are already playing hardball in private and talking publicly about aggressive residual increases and the T-word—transparency in streaming data—that Netflix’s Ted Sarandos and the other C.E.O.s hate so much. As was evidenced by the DGA presence at the bicoastal WGA rallies last night, the directors are at least posturing that they won’t roll over, even if they won’t stop work now in solidarity, citing the no-strike clause in their studio deal.

It’s interesting: this is the first Hollywood strike of the social media era, and the writers are behaving exactly as might be expected. Namely, they won’t shut up about it. All the anger and exasperation that was conveyed during the 2007-08 strike through the traditional media (and via Nikki Finke) has now been directed to Twitter, Instagram, and TikTok, then amplified by the traditional media and anyone online who will listen.

It’s been effective. My feeds are clogged with picket lines, and outside the algorithm bubble, both the local and national TV media seem very interested in the story. WGA negotiating committee member Adam Conover went viral and leveraged his tweets to get himself on CNN, where he trashed David Zaslav, the C.E.O. of CNN’s own parent company, arguing that Zaz’s $250 million pay package was “about the same level as what 10,000 writers are asking him to pay.” A dagger.

That stuff’s not gonna stop, and it will likely get way worse as the realities of a strike take hold. I’m told Apple cut about a dozen showrunners today who aren’t actively working on in-production shows. Sony and Universal stopped paying as well, per Bloomberg, and others will follow. At the same time, writer-producers are being told to continue to perform producing duties despite the strike. Today I saw a super-aggressive letter from Disney’s 20th Television to an active writer-producer, warning that “you are not excused from performing your duties as a showrunner…,” and that’s “even if the WGA attempts to fine you for performing such services during the strike.”

Just wait until WGA members start posting their delinquent mortgage statements online. Juxtapose that with the pics we’ll see of Zaslav smiling at the Hotel du Cap in the South of France at the party he’s about to throw for himself—sorry, for the 100th anniversary of Warner Bros.—during the Cannes Film Festival. Appearances like that, and like Disney C.E.O. Bob Iger’s red carpet stroll at the Met Gala in sparkly Donald Duck sneakers, feel extra cringy now. And Writer Twitter might break altogether if any of the moguls dares appear courtside at the NBA Finals or on David Geffen’s yacht. Beware.

I’m not just talking about the streamer advantage, though we’ve all seen the reports about the stockpiling of shows, especially at Netflix. It’s a bit ironic: Netflix, the company that upended the television model and led Hollywood down the path that arguably resulted in this WGA strike, is now the one with such a big global tranche of content that it will be better insulated from the results of the labor chaos that it begat. Someone smart made a compelling argument to me yesterday that Netflix is actually not as well-prepared as many believe—that, because the service has trained its members to expect the firehose of new scripted originals every week, those Netflix customers will notice even a small strike slowdown more quickly than subscribers to other services, and they will cancel. By comparison, HBO Max subscribers don’t expect much more than a couple top-tier shows a quarter, which, given the stockpiling, all that new unscripted fare from Discovery+, and the pipeline of fresh Warner Bros. theatrical films, Max can keep delivering for a while. But not Netflix.

Maybe, but at least in the short term, Netflix and the other streamers will likely be able to satisfy their customers, bring in new ones, and sell ads—the burgeoning #cancelnetflix movement notwithstanding. At the same time, the traditional linear TV companies aren’t nearly as vulnerable as before. The audience for late-night shows and soaps is just so much smaller than it was 15 years ago, and the viewer backlash to a delayed or scrapped fall broadcast schedule, while not insignificant, likely won’t cause companies to hit the panic button for at least a few months.

Used to be you’d turn on NCIS at 9 p.m. and if there wasn’t a new episode in October, you’d freak out. Now, if you’re part of the 85 percent of U.S. consumers who subscribes to a streamer, you simply check out what’s available there, and the algo serves up something to replace the show you would have watched if not for the strike. Sure, there will be some impact, but not an actual crap-your-pants moment like if NFL players went on strike.

It’s also a much bigger media ecosystem now for certain talent. There’s unscripted shows and digital video outside WGA coverage, of course, but podcasts have in many ways replaced late-night TV as the venue for celebrities to promote their wares and make news headlines. (Yes, I’m looking at you, Gwyneth, and your Ben Affleck “technically excellent” sex comment on Call Her Daddy.) Podcasts aren’t covered by these WGA rules, allowing members like Marc Maron, Conan O’Brien, and Will Arnett (Smartless) to make tons of money working for media companies while technically striking against media companies.

And, let’s face it, the studios are kinda incentivized to wait this out awhile. Zaslav has basically said as much, and his C.F.O. Gunnar Wiedenfels must be salivating at the prospect of deleting pricey talent deals from his treasured spreadsheets and canceling already-greenlit shows. Paramount Global’s stock tanked nearly 30 percent today not because the Blue Bloods writers are on strike but because its streaming losses jumped to $511 million this quarter while its TV networks are sinking in quicksand. Paramount now wants to spend less, and is looking for any way to cut costs, including fewer shows and talent deals.

Hence C.E.O. Bob Bakish saying the impact of the strike on cash flow will be positive. Yes, positive. “The sorry news for writers is that, in declaring a strike, they may in fact be helping the streaming giants and their parent companies,” the analyst firm Moffett Nathanson wrote in a note this week to clients. Sad but true.

They’re not on social media, and they would never say this publicly, but many writer-friendly executives, agents, and even some veteran writers themselves acknowledge that the television business has fundamentally changed, and no guild strike can bring the old ways back. The broadcast network model is nearly gone; streaming means a higher volume of shows, a lower volume of episodes of those shows, and a necessarily changed approach to compensation. “The strike will end eventually, but regardless of whether it ends quickly or drags out, we believe the age of Peak TV is over and is not coming back,” Moffett Nathanson added in its note. “The economics of writing for television have likely permanently changed.”

This doesn’t mean the WGA shouldn’t fight to keep what it can, and, more importantly, to change the model to better value the work of writers. They’ve got great points, and in many ways streaming has pulled the financial rug out from under them. But now that both sides are dug in, the studios don’t yet have a reason to acquiesce, and there isn’t really a statesman who can step in to resolve it with credibility on both sides. Maybe CAA’s Bryan Lourd, who has great studio relationships. Or Jay Sures at UTA, who now reps WGA president Meredith Stiehm. Or Bob Iger, or Ken Ziffren. The reality is, it’s probably way too early for those guys to get involved—meaning this situation will need to get a lot worse before it gets better.

Got a question, comment, complaint, or a good Cinco de Mayo mescal margarita recipe? Email me at Matt@puck.news or call/text me at 310-804-3198.