For Hollywood Writers, a Heavily Negotiated Business Contract

By — on / Conflict Resolution

business contract

In its negotiations for a new business contract with entertainment companies back in 2017, the Writers Guild of America (WGA) delivered at the bargaining table what many film and TV viewers crave onscreen: plenty of suspense and a hard-won, if imperfect, victory.

The WGA, which represents more than 12,000 film and TV writers, negotiated for seven weeks with the Alliance of Motion Picture and Television Producers (AMPTP), which represents film and TV studios. As with the parties’ past negotiations, the difficulty of predicting the future of media viewing in the digital era made the talks contentious. This time around, however, a shift in power allowed the WGA to achieve some of its goals without resorting to a damaging strike.

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Striking out

Back in 2007, when no one was quite sure how “new media” outlets such as YouTube would affect people’s consumption of TV shows and films, the WGA demanded significant compensation for programs distributed digitally. Saying it was too soon to tell how digital profits would play out, the studios tried to base writers’ residual fees on a system established for VHS and DVD distribution under a previous contract, the New York Times reports. This argument angered the writers, who believed they’d long been underpaid on home-video profits, and they went on strike.

Networks and studios had prepared for a possible strike by stockpiling scripts, and they weathered it by adding reruns and reality-TV shows. A federal mediator stepped in, and the writers eventually made gains on the issue of digital revenue. In the short term, however, the strike inflicted considerable financial damage on both sides.

Offscreen conflict

As the WGA and the AMPTP headed back to the bargaining table, it was the major media companies that appeared to be in the weaker bargaining position, according to the Times. Movie studios weren’t churning out blockbusters the way they used to, and TV viewers had fled both broadcast networks and cable TV in favor of streaming services such as Netflix and Amazon. Yet with scripted television and late-night talk shows thriving, networks could ill afford another writers’ strike if it meant the show runners behind popular series such as Game of Thrones and Scandal would delay their seasons in solidarity with their writers.

That didn’t mean the business contract talks were easy. The writers made a slew of tough demands, such as asking for a bailout of their generous healthcare plan, which had been operating in the red, and an adjustment to the formulas that determine their pay, especially for cable and streaming-service shows. The WGA also insisted on concessions regarding “span,” or the time spent producing each episode of a TV show. With networks ordering shorter seasons of shows but lengthening the production time per episode, writers had been spending more time on each episode while being paid less. According to Deadline Hollywood, both sides threw out “dubious numbers” and staked out hard positions across issues.

That April, having made little progress toward a new business contract, writers voted to authorize a strike in the event an agreement wasn’t reached by the May 1 renewal deadline. Only during a final, marathon day of talks did the shape of a negotiation emerge; an agreement was reached in the early hours of May 1.

Drafting a happy ending

The WGA announced to its members that it had made “unprecedented gains.” Pay minimums were increased across the board. The AMPTP agreed to bail out the healthcare plan, to give writers a 15% increase in residuals from pay TV, and to increase residuals from high-budget shows on streaming services. In addition, on the issue of span, the studios agreed to define an episode’s standard production time as 2.4 weeks; writers who worked longer than that would be paid extra.

The AMPTP refused a WGA demand for an affirmative-action program to improve the representation and pay of women and minority writers in the industry, according to Deadline Hollywood. However, CBS, ABC, and NBC agreed to increase their funding of a training program designed to draw more women and minority episodic-TV writers into the business.

3 notes for successful business contract negotiations

1. Avoid ultimatums that would harm both sides. With the damage inflicted by the 2007 WGA strike still fresh in their minds, parties on both sides were anxious to ward off a sequel. Both parties ultimately decided it was better to make concessions than to usher in a potentially devastating strike.

2. Acknowledge shifts in power. The TV and film studios seemed cognizant of the fact that they were in a weaker bargaining position than when they faced down the WGA in 2007. Smart negotiators stay attuned to shifts in industry conditions and relationships.

3. Bet on your different views of the future. When it came to predicting how the media landscape would unfold, the parties presented self-serving numbers and, in the end, largely chose to split the difference between their claims.

A better approach may have been to “bet” on their claims by creating different payment schemes for writers based on each party’s predictions and then waiting to see how the future plays out.

What approaches have you found successful in navigating salaries in a business contract?

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