How Hollywood Writers Won the Strike: The Inside Story of the Studio Deal

A historic victory for the Writers Guild of America over the major studios has changed the landscape of the entertainment industry. Here’s how it happened.

The Writers Guild of America (WGA) is the union that represents the writers of movies, television shows, and other scripted media. For more than a year, the WGA was engaged in a bitter dispute with the Alliance of Motion Picture and Television Producers (AMPTP), the trade association that represents the major studios and networks. The main issue was the compensation and residuals for writers in the era of streaming services, which have disrupted the traditional business model of the industry.

The WGA argued that writers were not getting their fair share of the profits from streaming platforms, which often pay lower fees and royalties than traditional outlets. The WGA also wanted to end the practice of “packaging”, which allows talent agencies to bundle writers with other clients and collect fees from both sides of a deal, creating a conflict of interest. The WGA demanded that agencies sign a new code of conduct that would prohibit packaging and affiliate production, or else lose their representation of WGA members.

The AMPTP, on the other hand, claimed that the WGA’s demands were unreasonable and unrealistic, and that they would harm the industry’s competitiveness and creativity. The AMPTP also accused the WGA of violating federal labor law by organizing a mass firing of agents by thousands of writers in 2019, and by imposing sanctions on studios that worked with non-compliant agencies.

The standoff between the two sides resulted in a stalemate that lasted for months, with no formal negotiations taking place. The situation became more urgent as the expiration date of the previous collective bargaining agreement approached in May 2020. Without a new contract, the WGA could have launched a strike that would have paralyzed the production of new content, especially amid the coronavirus pandemic.

However, in a surprising turn of events, the WGA and the AMPTP announced on July 1, 2020, that they had reached a tentative agreement on a new three-year contract, averting a potential strike. The deal was ratified by an overwhelming majority of WGA members on July 22, 2020.

So how did the WGA manage to win this historic victory over the powerful studios? What were the key factors that led to the breakthrough? And what are the implications of the deal for the future of Hollywood?

The Role of Streaming Services

One of the main drivers of the WGA’s success was the rise of streaming services, such as Netflix, Amazon Prime Video, Disney+, and HBO Max. These platforms have created an unprecedented demand for original content, giving writers more leverage and opportunities than ever before. Streaming services also have different business models than traditional networks and cable channels, which rely on advertising revenue and syndication fees. Streaming services generate income from subscriptions and licensing deals, which means they are less concerned about ratings and more focused on attracting and retaining customers with diverse and quality content.

This shift in the market dynamics gave the WGA an edge in its negotiations with the AMPTP. The WGA was able to use streaming services as both a bargaining chip and a pressure point. On one hand, the WGA could offer concessions to streaming services in exchange for better terms on other issues. For example, the WGA agreed to lower minimums and residuals for low-budget streaming shows, which are often produced by independent studios and cater to niche audiences. On
the other hand, the WGA could threaten to disrupt the supply of content to streaming services if no deal was reached, which would have hurt their competitive advantage and customer satisfaction.

The role of streaming services was also evident in the resolution of the packaging dispute with talent agencies. After months of stalemate, several major agencies, including UTA, ICM Partners, and CAA, agreed to sign the WGA’s code of conduct in July and August 2020, ending their packaging practices and affiliate production. One of the reasons for their capitulation was that they realized they could not afford to lose access to streaming deals, which were becoming more lucrative and prevalent than traditional deals. By signing
the code of conduct, they ensured that they could continue to represent WGA members and participate in streaming transactions.

The Impact of COVID-19

Another factor that influenced the outcome of the negotiations was
the impact of COVID-19 on the entertainment industry. The pandemic
forced most productions to shut down or delay in March 2020,
creating a huge financial loss for studios and networks. The pandemic
also accelerated the shift to streaming consumption, as more people
stayed at home and sought entertainment online. These changes
created both challenges and opportunities for both sides in their
bargaining positions.

For the WGA, COVID-19 increased the urgency and importance of
securing a new contract that would protect the rights and interests of
writers in the changing landscape. The WGA knew that writers were
among the most vulnerable workers in the industry, as they often
faced uncertainty and instability in their income and employment. The
WGA also knew that writers were essential for the recovery and
resilience of the industry, as they provided the creative vision and
storytelling that drove the demand for content. Therefore, the WGA
pushed for provisions that would ensure writers’ health and safety,
compensation and residuals, and diversity and inclusion in the new
contract.

For the AMPTP, COVID-19 created a dilemma between saving costs
and investing in content. On one hand, the AMPTP wanted to reduce
its expenses and liabilities in the face of the economic downturn and
the health crisis. On the other hand, the AMPTP wanted to maintain
its competitive edge and market share in the face of the streaming
boom and the consumer demand. Therefore, the AMPTP had to make
concessions to the WGA that would balance its short-term and long-
term interests.

The Strategy of Solidarity

The final factor that contributed to the WGA’s victory was its strategy of solidarity among its members and allies. The WGA demonstrated a remarkable level of unity and cohesion throughout its campaign, which gave it strength and credibility in its negotiations. The WGA mobilized its members to participate in various actions, such as voting, signing petitions, attending meetings, sending letters, and firing agents. The WGA also communicated effectively with its members, keeping them informed and engaged with regular updates, newsletters, podcasts, and webinars. The WGA also reached out to other unions and organizations, such as SAG-AFTRA, DGA, PGA, NAACP, and ACLU, to seek their support and endorsement.

The strategy of solidarity paid off for the WGA, as it was able to withstand the pressure and resistance from the AMPTP and the agencies. The WGA showed that it was not afraid to take bold and decisive steps to defend its principles and values. The WGA also showed that it was not alone in its fight, but had the backing of thousands of writers and millions of fans. The WGA’s solidarity sent a clear message to the other side: that writers matter, and that they deserve respect and recognition.

The Outcome of the Deal

The deal that the WGA reached with the AMPTP was widely hailed as a historic win for writers and a landmark for the industry. The deal included significant gains for writers on several fronts, such as:

– A 26% increase in fixed residuals for high-budget streaming shows,
which will generate an estimated $250 million more for writers over
the life of the contract.
– A reduction in the span period for television writers, which will limit
the amount of time that writers can be held exclusively by a studio or
a network without being paid.
– A 1.5% increase in employer contributions to the WGA’s health plan,
which will ensure its solvency and sustainability amid rising costs and
declining revenues.
– A new paid parental leave fund, which will provide up to eight weeks
of paid leave for writers who become parents through birth,
adoption, or surrogacy.
– A new inclusion and equity fund, which will support initiatives to
promote diversity and representation among writers in terms of race,
gender, sexual orientation, disability, and age.
– A new anti-harassment policy, which will require studios and networks
to implement procedures to prevent and address harassment and
discrimination in the workplace.

The deal also marked a successful resolution of the packaging conflict with talent agencies. By signing the code of conduct, agencies agreed to align their interests with writers and to increase transparency and accountability in their dealings. The deal also paved the way for a new era of collaboration and cooperation between writers and agents, which will benefit both parties in terms of representation and opportunities.

The Future of Hollywood

The deal that the WGA achieved with the AMPTP has set a new standard for labor relations in Hollywood. The deal has shown that writers have power and influence in shaping the future of the industry. The deal has also shown that writers have vision and innovation in adapting to the challenges and opportunities of the digital age. The deal has also shown that writers have solidarity and courage in standing up for their rights and values.

The deal has also opened up new possibilities for creativity and diversity in Hollywood. The deal has created more incentives and protections for writers to pursue their artistic passions and ambitions. The deal has also created more avenues and platforms for writers to express their unique voices and perspectives. The deal has also created more opportunities and resources for writers to develop their skills and talents.

The deal has also signaled a new hope for democracy and justice in Hollywood. The deal has challenged the status quo.