Welcome back to What I’m Hearing. Thanks to the hundreds of Puck members that joined our first Quarterly Call today, and a big thanks to BofA analyst Jessica Reif Ehrlich for presenting and answering my questions, and to Global X ETFs for sponsoring. We’ll do another one next quarter.

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Let’s begin…

• The Official Strike Settlement Credit-Meter: Congrats to all the P.R. people who positioned their executives for heroic credit in the WGA strike settlement coverage. I’m gonna say Disney’s Bob Iger won the image-burnishing game, thanks to lead positioning in both the THR and LA Times recaps, especially Iger’s late-night call with WGA negotiator Chris Keyser and the flex of having dinner with Paul McCartney on the eve of the deal. NBCUniversal’s Donna Langley got to be called a “diplomat” with “encyclopedic knowledge.” Encyclopedic! And Team Zaslav achieved a Variety honor as having “helped bring about the first in-person sit down,” plus he “played coach” during the final push (that’s much nicer than “deferred to C.E.O.s with actual experience dealing with screenwriters”).

  But Netflix’s Ted Sarandos, never one to shy away from credit, was surprisingly muted in the media coverage, though he was anointed “the go-to source on streaming-centric issues.” The four C.E.O.s not in the room at the end were barely mentioned—for Amazon and Apple, I suppose the less association with unions the better. And not mentioned in any of the articles, of course: The labor executives who actually did all the work.

• Daily Show do-over: I love how the media coverage of The Daily Show host search suggests Hasan Minhaj is still a contender. The dude’s not getting that job! Minhaj is great, and I don’t personally care if he embellishes, but TDS is a comedy news program, and thanks to the revelations in The New Yorker—fabricated anecdotes about discrimination and Islamophobia—he now has a credibility problem. This is a no-brainer for Paramount’s Chris McCarthy: He’ll move on. (A Paramount rep says nothing has been decided.)
• More on that Office reboot: The Internet went a little nuts over my mention on Sunday that showrunner Greg Daniels is doing a new version of The Office. My favorite is the outrage that NBC would dare remake the 2005-2013 show, which was itself a remake of the U.K. original. Whatever, this is a development deal, people! Right before the strike, Daniels was closing a pact to return to the format and see if he can come up with something worth making. Now, post-strike, he’ll close the deal and do just that. NBC and Universal Television, which licensed the format from creators Ricky Gervais and Stephen Merchant, would certainly love to make a new version; they’ve been talking about it for years. But this is still a waaays away.
• Taylor’s mall movie premiere: It’s not public yet, but of course Taylor Swift is planning to be there for the premiere of The Eras Tour movie, set for Oct. 11 in L.A. TSwift likes to announce this kind of news on her own social channels, and the L.A.P.D. is requiring her attendance and the venue to be kept secret for now. But AMC Theaters, which is distributing the concert film, is planning to stage a big event at one of its multiplexes, probably The Grove (though three AMC backups are available too). They’ve got 175 security people reserved for what’s expected to be a massive fan clusterfuck and a must-attend for Hollywood executives with daughters. (L.A.P.D. declined to comment.) Sadly, Swift’s definitely-real romantic interest Travis Kelce has a game in Kansas City the next night, so presumably he won’t attend. Instead, maybe AMC C.E.O. Adam Aron can join Swift for a ticker-tape parade and triumphantly wave to his many fans from the Grove trolley.

• SNF over/under: Speaking of TSwift, instead of box office, let’s pre-game ratings for Sunday Night Football, Chiefs vs. Jets, with Kelce, and, apparently, Swift in attendance. SNF averaged 19.9 million Live+Same Day viewers on NBC and Peacock last season, and this past Sunday’s game lured 19.2 million. Kelce’s afternoon game on Fox, which featured Swift’s surprise appearance, generated 24.3 million viewers and over-indexed with young women, despite being a blowout. So, let’s set the line in the middle, at 21.5 million, and thanks to a week’s worth of non-stop publicity, I’ll take the over.

Now on to the WGA’s deal and the end of its strike. First, my brief take on the balance of pains and gains, then Jonathan analyzes the actual deal…

Maybe that’s just annoyance with the length and nasty tenor of this work stoppage; in which case, that annoyance probably should be directed at the studios and streamers that didn’t really make an actual counter-offer until mid-August (and even then, it was over the resistance of Carol Lombardini, the AMPTP’s president and lead negotiator). But like in all strikes, the cost-benefit issue is real, and the estimated $5 billion in lost economic activity during the strike has largely been overlooked in the cheerleading about the gains for writers.

That’s to be expected, of course, as the writers congratulate themselves and sell the deal to members for ratification. But I had Adam Conover, the WGA board and negotiating committee member, on TheTown yesterday, and I didn’t really push him on the cost issue. That resulted in a few emails like the one below, from a film editor, in my inbox:

“hi, love the pod but jesus how selfish can these writers be! $5b in economic damage from this strike for about $150m for this union. i’m an editor and my husband manages [COMPANY REDACTED TO KEEP ANONYMOUS] that services film sets, and we have been victims of this strike. no work, and we get nothing out of this. at least i’m in my own union, but he’s not. what does adam and the other righteous wga negotiators say to all the people who suffered so they can get these relative small gains?”

Yes, a couple misstatements in there. As Jonathan notes below, the gains are $150 million above the initial studio offer per year, and the overall gains—especially in the creation of new categories of benefits—aren’t actually that small. But are they worth the pain and long-term damage of the strike? I forwarded that email to Conover, who sent me a thoughtful response, which I’m truncating here:

We are acutely aware of, and grateful for, the sacrifices that other workers made during our strike and SAG-AFTRA’s strike. We know we owe you a debt of gratitude and solidarity, and we have and will continue to work our asses off to repay it.

First, WGA members raised nearly $10 million for the Entertainment Community Fund, and millions more for the MPTF, all of which went to entertainment workers affected by the strike regardless of union status. But more importantly, we will stand with you in your next fight. When IATSE took a strike authorization vote in 2021, writers stood with you, and if your union needs to take the fight to the companies again in 2024, we will do the same thing, because you stood with us. The same goes for every other union and non-union worker in town.

I also want to be clear: The deal we won with our shared solidarity was NOT small; it was the largest deal we’ve won in decades, and triple the AMPTP’s pre-strike offer. But more important than the dollar value is the precedent our deal set for all workers. We got the companies to agree to deal terms that they swore they never would, and that means it will be easier for other unions, and other workers, to extract the same from them in the future.

For instance: Because of our and SAG-AFTRA’s strike we won, for the first time, success-based residuals. And now, every union can go to the companies and demand the same, hopefully without striking, because we have proved that the companies can afford it. That’s a win for EVERY worker in Hollywood, and it’s one that we all won TOGETHER. The same is true for our pension and health improvements, A.I. protections, and other terms we won in the strike.

The fact is that a win by one group of workers is a win for all, because it widens the aperture of what the companies must allow. And that’s because workers, fundamentally, are on the same side.

Is that convincing? I guess it depends who you are, and how you’ve been impacted by the strike and this deal.

Now for Jonathan’s deal takeaways…

The WGA says the new deal contains $233 million per year of gains, which is almost three times the $86 million that the guild says the studios were offering before the nearly five-month strike (though it’s nowhere near the $429 million the guild sought). Those numbers are a bit misleading—how can A.I. protections be valued, exactly?—and how you feel about unions probably dictates whether you believe the estimated $5 billion in lost economic activity during the five-month strike was worth these gains. With all that in mind, let’s look at ten major takeaways from the WGA deal. We’re publishing the first five tonight and the rest on Sunday.

The WGA achieved a historically high first-year increase in wage minimums of 5 percent, and yet also settled for a historically low first year increase in minimums of 5 percent. Huh? The answer to that brainteaser is that, while 5 percent is higher than what the union has achieved in decades, it falls dramatically behind—in real dollar terms—the inflation rate of the past few years. Remember, basic wage increases represent a disproportionately large portion of the total deal package. That 5 percent increase is no better than what the Directors Guild achieved without walking out for five months. But sacrificing wage increases—and going on strike—was the WGA’s key to unlocking other historic achievements in this deal. SAG-AFTRA, by contrast, has asked for an inflation-compensating 11 percent, and it is highly unlikely to agree to anything as low as its sibling guilds agreed.

Feature film writers ceded the spotlight to TV scribes a decade ago. Everyone talks about Peak TV while in the same breath bemoaning the collapse of theatrical originality into the IP abyss. That said, movies are still a thing, and the WGA obtained several key gains for feature writers. Notably, in an attempt to curb long-standing abuse, such as so-called producer’s rewrites and other free work, studios must now guarantee feature writers the opportunity to perform and be compensated for at least one rewrite after writing or selling a first draft. This applies only if the first draft compensation does not exceed twice the minimum for such work, on the (partially flawed) assumption that writers with leverage to negotiate more compensation also have leverage to negotiate a rewrite. That said, the WGA has struggled for years to insulate feature writers from pressure to do free rewrites, without ever achieving anything in that realm, so a guaranteed paid rewrite for some is a real victory. The studios blinked—and now that the principle has been established, you can expect the guild to seek to raise that 2x cap in the next round of talks three years from now, extending the protection to more writers. Meanwhile, agents and attorneys for overscale writers not covered by the new provision can nonetheless use it to buttress the case for a guaranteed rewrite.

Also achieved for writers of this compensation level was an accelerated payment schedule, so that scribes won’t have to wait as long for their checks, addressing another persistent abuse. And finally, features made for streaming with a budget of $30 million or more receive an increase in minimums and residuals so that the delta is diminished—albeit not eliminated—between streaming features and those made for theatrical. That’s important: as more feature work shifts to Netflix and other made-for streaming platforms, lower streaming minimums effectively create downward pressure on feature compensation. Closing that gap brings the WGA closer to the goal of “script parity.”

The WGA agreement is stocked with appendices, exhibits, schedules, and sideletters. But by far the most misbegotten is Appendix A, which is the domain of late night comedy/variety shows, game shows and other unscripted fare whose writers have never gotten much respect. As if the anemic minimums and skeletal protections aren’t bad enough, none of them even applied at all to shows of this sort made for streaming. Now, many of them do, bringing protections to late night and other Appendix A shows made for streaming—which is presumably the future, as linear audiences age and shrink. Soap operas also receive new protections if they move to streaming platforms. Appendix A may not be the most exciting sector of the writing business, but these gains signal a guild determined to protect as many flanks of the profession as possible. Is a renewed push in reality TV next?

For the first time—under the rubric of “preserving the writers’ room”—the WGA achieved a minimum staffing level in TV and most made-for-streaming series (but apparently not for ad-supported series, such as made-for-FAST programming). This is a big deal, and the new rules, which take effect for seasons whose first episode is written after Dec. 1, are complex. For development (pre-greenlight) rooms, if there are three or more writers, at least three must be writer-producers; and if the room is 20 weeks or longer, there must be at least three writer-producers in the first season, and potentially more in subsequent seasons, depending on anticipated episode order. For post-greenlight rooms, the minimum staff size depends on season length, unless a single writer is employed to write all episodes (a.k.a. the “Mike White Rule”). The minimums are three writers for up to six episodes, five writers for seven to 12 episodes, and six writers for 13 or more episodes. In all cases, at least three writers must be writer-producers.

These numbers are not far off from the WGA’s demands: for instance, the guild originally sought a sliding scale that would have required eight writers for a ten episode season, and reduced that in August to seven for ten. The specific numbers are less material than the fact of the minimums, which the studios did not want to establish. But in addition to pre- and post-greenlight rooms, the guild needs to be concerned with wiggle rooms—the unintended consequences. For instance, pre-greenlight rooms might simply fall by the wayside, with studios instead commissioning showrunners to write an episode script plus outlines (or perhaps a bible, one might imagine).

Also significant are guarantees on duration of employment, which take effect on the same trigger date as minimum staffing levels. These new rules are important because they give mid-level writers a pathway toward becoming showrunners themselves. For pre-greenlight rooms, the minimum staff of three is guaranteed at least ten weeks of consecutive employment (as the guild had demanded), while for post-greenlight rooms, the guarantee is the lesser of 20 weeks or the duration of the room itself. Weeks worked in the pre-greenlight room count towards the 20-week guarantee. Those rules apply to television and most made-for-streaming series.

And for some of those shows—namely single-camera series made for premium cable (such as HBO) and most made-for-streaming shows—at least two writers must be hired during production, for the lesser of 20 weeks or the duration of production. Optionally, either or both minimum positions can be divided up among multiple writers so that writers can be brought back to produce the episode they wrote. The guild had asked for more: it wanted half of the minimum staff employed through production and one writer employed through post, and all writers employed during post to receive at least weekly miniums. Although it settled for less during production and no guarantees regarding post, what was achieved is impressive—and the union said it will continue to pursue weekly minimums in post via arbitration claims.

See you Sunday,
Matt

Got a question, comment, complaint, or pics of David Zaslav dining with Ringo Starr? Email me at Matt@puck.news or call/text me at 310-804-3198.