Hollywood Writers May Go on Strike. These Numbers Explain Why

On Monday, the Writers Guild of America voted overwhelmingly in support of authorizing a strike should its leaders not come to an agreement on a new contract with the Alliance of Motion Picture and Television Producers. Their current deal, ratified in 2014, ends on May 2, and there is a wide gulf between what the 12,000 members of the WGA want in a new deal, and what the 350 production companies that form the AMPTP want to give. It would be the first WGA strike since the 100-day work stoppage that rattled the industry in 2007 and 2008.

For viewers at home, a strike would mean an interruption of late night comedy shows, a potential delay of some of their favorite scripted series, like Game of Thrones or The Walking Dead, and a summer of terrible, underwritten movies like Transformers: Revenge of the Fallen. For the writers in the union, nothing short of their livelihoods, and even lives, are on the line. Here’s a breakdown of the dispute, by the numbers.

$145 Million

There are a lot of issues at play in the negotiations between the WGA and AMPTP, but first and foremost is the pension and healthcare plan that writers can buy into. Right now, there is a projected $145 million shortfall in the WGA’s healthcare and pension fund, and neither side wants to cover it.

In many industries, employers pay for much of their employees’ health insurance premiums, but it’s a bit different in the entertainment sector. With writers seasonably employed and often working on different shows and movies, they get their insurance through the union. It’s a big pool of customers, so they have more buying power, and the studios pay sponsors a portion of the tab. But as with every other industry, they’re fighting over just how much the employer should sponsor, especially as health costs rise.

Studios want to spend $10 million less, while writers think the studios should pony up 1.5 percent more than the last contract required to cover the hole, especially given how profitable the industry has been of late.

$51 billion

Last year, the big six studios — Disney, Fox, Paramount, Sony, Warner Bros., and Universal — took in $51 billion in operating profit. Obviously, that money mostly gets divvied up between employees and the cost of operations, but a nice chunk goes to corporate coffers. Most significantly, that $51 billion is double what studios made the last time writers went on strike.

What’s behind the huge surge in profits? Well, there are way more TV shows and movies, and thanks to streaming and VOD, way more ways to exhibit them — to not just Americans but a growing consumer base around the world. There were 301 scripted shows on the air in the 2015-16 season, way up from the 262 in 2013-14, and astronomically higher than what it was back in 2007.

23 Percent

While there are more movies and shows, that doesn’t mean writers are making more money. In fact, while networks and studios have reaped bigger profits, writers have made decidedly less money. In 2015-16, the average TV writer-producer took home 23 percent less in salary than they had just two years prior. The median earnings dropped by an average 25 percent, and the number of writers who made the minimum allowed by the WGA shot up 20 percent.

205

So why is this happening, with so many more TV shows being made? Well, they’re also making shorter seasons of shows. It used to be that most shows on network TV had 22 episodes per season, and premium cable shows would be a bit shorter.

But there were only a few premium networks. Now, pay-cable — like FX and AMC — have joined the parade of programmers, and they have operated more like HBO than ABC. Add Amazon, Netflix, and Hulu to the mix, and the number of shows that were between two and 13 episodes last season was a staggering 205. Shorter seasons means fewer episodes need to be written, which means writers make less money. And as of now, writers are often bound to one show, so they can’t make up the salary difference elsewhere.

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Now, writers make decent livings; the WGA minimum payment for an original screenplay for a small movie (under $5 million budget) is $71,236, while a higher budget movie will net them at at least $133,739. But you can earn far less if other people work on your initial concept, and more and more, studios are asking for work that used to be compensated — like re-writes and outlines — for free. That seriously cuts into a writer’s take-home pay, because they not only don’t get paid for what they used to get compensated for, they can’t work elsewhere.

On the TV end, the minimum payments for delivery of a script of a 30-60 minute show vary based on budget and the type of network, with a range of $15,284 to $38,302 per episode.

1.2 Percent

What we just looked at was the base pay for movies and TV shows. Writers also get a small piece of the spoils when their work gets replayed on TV, bought on Blu-ray, or is streamed. Right now, they get 1.2 percent of the gross profit on their movie’s residual profits, or what they make after they leave the theater.

Meanwhile, TV writers have seen their residuals plummet. Few networks programs have summer re-runs anymore, and the DVD box set craze is a thing of the past. In 2007, writers negotiated for just a sliver of streaming profits, and that’s going to be another big sticking point this time around; the medium is changing, and they say their contract should change with it.

$69 million

Just as huge Wall Street salaries tend to be political piñatas, so does the take-home pay of the biggest CEOs in entertainment. CBS head honcho Leslie Moonves made a whopping $69 million last year, a 22 percent increase on the year prior, despite a down cycle for the network. Disney’s Bob Iger made $44 million, and Netflix’s Reed Hastings made $23 million. Fox also paid Bill O’Reilly $25 million to not work at all after he was ousted over a long record of alleged sexual harassment.

$2.5 billion

It’s unlikely that any of these executives will drop their own salaries, but their companies and community may suffer if the strike lasts anywhere near as long as the 100 days the last one wound up taking. The 2007 work stoppage cost the L.A. economy alone $2.5 billion.