EXCLUSIVE: The first day of the latest round of renewed talks between the studios and SAG-AFTRA has ended, with proposed plans for the principals to meet again — possibly in the next day or so.
Declared “suspended” on Oct. 11 by the studios over a union plan for additional payouts based on a streaming show’s success, the now resurrected deliberations started out today with the AMPTP putting some new proposals on the table – to less than stellar response on this 103rd day of the actors union’s strike.
Labeled as “generous,’ by studio sources, the jewel in the AMPTP’s negotiating crown Tuesday was a new take on what has been termed “success-based compensation.” Seeking to sidestep the leg hold trap that revenue sharing and a “subscriber levy,” as Netflix’s Ted Sarandos repeatedly dismissively termed it over the past two weeks, has become in talks, the CEOs believed they have found a mechanism “to ensure that there are greater payouts to cast members,” as one insider put it.
“It all depends, these talks depend, on how the Guild reacts to this latest offer,” another industry source told Deadline earlier today.
The reaction was pretty clear out of the gate. The proposal “flopped,” an individual close to the deliberations told Deadline.
Yet, while others also said the day proved “not great” at points and there was a lot of raw feelings over the studios’ sudden shuttering of talks two weeks ago, cumulatively the two sides completed a near full day of deliberations- – which is much better than no talks at all, for sure.
As they were in the final days that sealed the WGA deal and the first unsuccessful round of renewed talks with SAG-AFTRA earlier this month, Disney’s Bob Iger, NBCUniversal’s Donna Langley Warner Bros Discovery’s David Zaslav and Netflix’s Sarandos were all at the table with AMPTP president Carol Lombardini at the Guild’s Wilshire Blvd headquarters Tuesday.
Like last time, the studio overlords faced SAG-AFTRA president Fran Drescher, chief negotiator Duncan Crabtree-Ireland, chief contracts officer Ray Rodriguez and others. The presence of the CEO Gang of Four was implied in the joint statement put out on Oct. 21, the 100th day of the SAG-AFTRA strike, announcing the resumption of talks for today.
Word was that today’s meeting started slightly later than anticipated this morning. The delay wasn’t due to any friction between the parties, rather simply a syncing of usually jam-packed schedules.
Once things did kick off, at the top of today’s agenda, we understand, was the studios’ counter to SAG-AFTRA’s last proposal, which stripped their previous revenue sharing asks down to small percentage per subscriber fee. Described as “more generous based on compensation” per one source, the AMPTP said they wanted “to ensure that there are greater payouts to cast members.”
From the very beginning of bargaining between the AMPTP and SAG-AFTRA this cycle, revenue sharing has been dead in the water to the studios. The Guild envisioned a system where the cast of hit streaming shows would see some of the lucrative bottom line – an idea that would be about 2%, later cut to 1%, of studio profits and then re-considered as approximately 57¢ per subscriber per streaming service.
Dead before the strike, revenue sharing was dead still when the CEO Gang of Four and the Guild brass and negotiating committee officially sat down for the first time in over 80-days on Oct. 2. The fact that everything blew up on Oct 11 and the studios walked out shouldn’t have been a great surprise – such a move is a tried-and-true AMPTP tactic.
Now, the challenge for studios and the Guild in regard to SAG-AFTRA’s last proposal is as much philosophical as financial. Sarandos termed the subscriber payout proposal a “bridge too far,” whereas Crabtree-Ireland viewed the offer as a sign that the Guild was flexible and open to further negotiations.
Interestingly, at this near make-or-break point, both sides do agree the industry has dramatically changed, especially as a business. Close on many topics, it is the long tail of money, which turned Tinseltown jobs into middle class careers over previous decades, that separate the parties.
In a column published on Deadline on the strike’s 100th day, SAG-AFTRA leader Dresher wrote, “The 10-year grace period we have given the AMPTP companies to build their streaming platforms at the expense of my members’ fair compensation has come to a screeching halt.”
Drescher cited how streaming has “cut of the syndication tail” and squeezed the numbers of episodes and season down from what working actors use to work.
“Clearly, it’s not in the old residual payment structure designed for linear TV and it’s not in the current residuals compensation for streaming. It is in the pockets of the CEOs and on the balance sheets of the companies,” she added.
Joshua Sammer/Getty Images
Getty Images
As the actors’ strike hit the 100 day milestone on Saturday, there was a lot of activity leading into it, including a Zoom meeting on Oct. 17 with several stars including George Clooney, Emma Stone, Tyler Perry, Bradley Cooper, Arian DeBose among others; many who have award contending films being released before the end of the year. While an offer spearheaded by Clooney entailed a commitment of $150 million over three years to remove a cap on union dues and bring more cash to guild coffers, SAG-AFTRA leader Drescher on Instagram expressed her gratitude but said that the gesture wasn’t legally compatible with the union’s contract with studios and that it “does not impact the contract that we’re striking over whatsoever.”
Earlier on Oct 19, Crabtree-Ireland termed the offer and the idea of big stars moving to be last on residuals payouts (which actually all happen at the same time) more of a “gesture of goodwill.’
Still, while their proposals got kicked to the labor curb pretty quick, we do understand that a number of the same A-listers spent time last week reaching out to studio execs and bosses too in the hope that they would return to the table. That cajoling and the backlash the CEOs received for leaving the talks were part of what led to a collective decision to try one more time. A decision that was conveyed to the Guild in a call from Iger early on Oct. 21 to Crabtree-Ireland – at least one offer from the other side that was met with a near immediate Yes.
Also, during the negotiations down time last week, SAG-AFTRA issued Halloween costume guidelines for members to avoid dressing as characters from struck companies and projects, which irked some.
Beyond that kind of distraction, the hard reality for the town is that each day the strike goes on, the new TV season production schedule is delayed, and feature films as well.
Already, the theatrical schedule next year is getting shaken up, which will bring greater financial shock to exhibitors who’ve struggled through the pandemic; and this time there won’t be any government bailout money for them. Deadpool 3, which is half finished, won’t meet its start of summer first weekend of May release date and Paramount’s Mission: Impossible 8 jetted from the end of June 2024 to Memorial Day weekend 2025. On the latter note, that’s well over five billion dollars the global box office won’t be seeing next year.
As for the small screen, hopes that the writers getting back to work in late September and the momentum of their hard-fought deal would care over to the actors have been dashed, for now. The desire to get new scripted shows on the air by the end of January to salvage at least the back half of the 2023/2024 TV season seems to slip further and further out of reach, especially if the Guild and the CEOs can’t strike a deal to end the strike by Halloween
Looking at the economic big picture, the AMPTP’s months long battle with the Writers Guild and now SAG-AFTRA has contributed to a $6.5 billion loss to California’s economy. With the WGA out on the picket lines from early May to late September, and the actors union joining them in mid-July, that economic hit has led to the loss of 45,000 industry jobs, and a $400-plus million hit to the fall box office (for the post-Labor Day period through October 18, compared with pre-pandemic 2019).
Without stars to promote big films, like they did for summer’s juggernaut Barbie and Oppenheimer (which together grossed $2.38 billion WW), the grosses for several movies post mid-July have been muted in their openings since they haven’t been able to blast off in traditional ways at Comic-Cons and fall festivals. “If they don’t promote, that hurts box office, which therefore hurts their quote for the next big project,” one studio distribution executive told us recently about stars’ inability to do press during the strike.
Out on the picket lines on both coasts and elsewhere, this 103rd day of the strike, members were offering the negotiating committee strong support:
Laura Davis is an entertainment aficionado who delves into the glitz and glamour of the entertainment industry. From Hollywood to Broadway, she offers readers an insider’s perspective on the world of movies, music, and pop culture.
