Studios Present New Offer to Writers as Mysterious Memo Warns "Be Ready to Strike"

A walkout with an economic impact of $200 million per week seems increasingly likely — but could still be averted. Meanwhile, a reported memo from the WGA isn’t actually from the WGA.

Hollywood moved closer to its first major strike in a decade Sunday, with studio and WGA negotiators scheduled to meet at 2:00 p.m. as the Alliance of Motion Picture and Television Producers presents what may be its last offer in advance of contract expiration less than 36 hours away, The Hollywood Reporter has learned.

It’s anticipated that WGA negotiators will then need to caucus privately to consider the offer and may not provide a substantive response to company proposals until Monday, leaving scant hours to go until 12:01 a.m. Tuesday, at which time the guild has said it will walk out if no replacement deal is in place. That doesn’t preclude the possibility of an extension, however, if progress is being made.

Meanwhile on Sunday, a memo to WGA strike captains surfaced that tells them to “be ready to strike Tuesday,” according to press reports which THR has not been able to confirm. As reproduced in the reports, the memo also suggests that an extension is possible, and tells recipients to remove personal items of value from their studio offices Monday and to invoice the companies Monday for any outstanding fees.

Those reports described the memo as being from the WGA, but this does not appear to be accurate. The memo as reproduced is unsigned and when asked for a copy, the WGA told THR, “The Writers Guild has not issued any memos to members or updates on the status of negotiations.” What about memos to strike captains? “Contract captains are members,” responded the guild.

The memo as reproduced also inaccurately says the parties “will be back at the table Monday,” when in fact they are resuming Sunday. The missive’s authorship remains unknown.

The writers struck for about one hundred days in 2007-08, costing a wide swath of the California economy an estimated $2.1 billion to $2.5 billion. Adding a bump for inflation, that suggests that a strike this year could cost about $200 million per week.

The WGA and the AMPTP had no comment for this story.

A host of issues remain on the table, and a source familiar with the companies’ thinking told THR that the guild has been presenting little guidance during bargaining as to which issues it considers key and which it will give way on. But the WGA on Friday reiterated its view that its proposals bear only a “reasonable” cost and are readily affordable to the companies, so what the companies interpret as lack of guidance may in fact be a signal that the guild considers most or all of its proposals essential.

Among the issues in play is script parity, the guild’s demand that writers be paid the same for television scripts regardless of platform, including network shows, basic cable, premium TV and digital (streaming video-on-demand, or SVOD) platforms. The guild argues that the same work should garner the same pay, but the companies reject across-the-board parity as absurd, given the lower production budgets of some shows and platforms. Some of those platforms do pay network rates when the show’s budget exceeds contractual thresholds.

Another issue: The companies are only offering 2 percent annual wage increases, even though they gave the directors 3 percent. A phenomenon of parallelism across entertainment unions called pattern bargaining indicates that the companies will eventually offer the same 3 percent. That could come with Sunday afternoon’s proposal. But the fact that Kabuki theater is still playing out even with expiration so close is not a positive sign.

Further widening the gap: The WGA wants a range of so-called “outsize increases” — that is, a variety of category by category increases at levels above 2 or 3 percent. The companies agreed to a few increases of this sort for the DGA, as they often do for the various unions, but a source says that the WGA is requesting a wide panoply of such increases.

Indeed, the parties appear to be a whopping quarter-billion dollars apart in their proposals, with the companies looking to spend somewhat north of $180 million over the three-year term of the deal and the writers at $468 million. Were the companies to suddenly toss in $200 million or so to bridge the gap, they would risk upending the deal reached with the DGA several months ago and emboldening the actors union, SAG-AFTRA, to up its ask by several hundred million dollars when its negotiations start in about two weeks.

It’s highly unlikely the companies will do that, particularly since Wall Street analysts generally believe that a strike would not have a material effect on most parent companies’ share prices. But it’s also hard to see how the guild on Monday will back off from what was effectively a line in the sand drawn on Friday, just three days earlier.

On the issue of “span” — essentially, the payment of overages when writers work longer on episodes of short order series — the companies have expanded the categories (job titles/seniority) of writers to whom their proposal would apply.

However, the parties still disagree on what constitutes a short order series, that is, a series with a season short enough that it triggers the problem and remedy. The companies want their proposal to apply to series of about 12 or 13 episodes or less, while the WGA wants this protection to apply to series of 16 episodes or less, a larger universe. THR calculations suggest that the average series length is now about 12 or 13 episodes.

In addition, the companies want pro-rata overages to kick in when the writer works more than 2.6 weeks on a script. The WGA previously was seeking this protection whenever work exceeded two weeks on a script. It’s not known whether the WGA has now agreed to the studios’ figure.

On SVOD residuals, the WGA continues to press for more than the enhancements the DGA received. Such an outcome is unlikely, because of pattern bargaining.

On the issue of infusions into the guild’s troubled health plan, THR is told that the parties are close to agreement.

Many writers view the last strike as a success, but crewmembers are among those who feel otherwise, with one longtime IATSE member writing THR this week, “I am furious that they have once again put the entire industry into jeopardy! The writers … are not in the slightest concerned about how this will play out, how many people will once again lose homes, tap their savings and so on. A strike will kill what’s left of Hollywood.”

Added the crewmember, “I am beyond angry at the writers who seem to think that Hollywood would not exist at all without them. They are a piece of the machine that is made up of us all.”