Historically, The WGA Is Overdue For A Strike, With Residuals Again A Key Issue Of Upcoming Talks

David Robb
·8 min read

Disputes over residuals that flow from new revenue streams have been at the center of every major film and TV strike in Hollywood’s history. And as the WGA, SAG-AFTRA and the DGA all preparing for contract talks early in 2023 with the Alliance of Motion Picture & Television Producers, residuals could again be the flashpoint for the first industry-wide strike in 15 years.

With inflation at over 7% this year, raising minimum pay rates also is expected to be a major issue for all three guilds. The WGA West, for instance, saw significant declines in total earnings for film and TV writers in 2020 and 2021, in part due to smaller episode orders and ubiquitous mini writers rooms, so the usual 3% annual pay hikes may not cut it this time.

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The WGA’s current contract expires May 1, and the DGA and SAG-AFTRA contracts both expire June 30, and all three guilds have said they want more streaming residuals and higher minimum pay rates for their members.

And though strike jitters may be valid this time around, it should be noted that AMPTP president Carol Lombardini, who will lead the bargaining for the companies, has a perfect record of finding deals that keep the industry working. There hasn’t been an industrywide strike on her watch since she became president in March 2009.

As is the case every three-year bargaining cycle, a writers’ walkout next year is considered the most likely. The WGA has proven the most willing of Hollywood’s guilds and unions to strike — though it hasn’t done so since 2007.

History Lessons

If history is any guide, a WGA strike is overdue. From the first writers’ strike in 1953 until the last one in 2007-08, the longest the WGA had gone between strikes was 12 years, eight months and 15 days – from June 19, 1960-March 6, 1973. It’s now been more than 14 years and 10 months since the last WGA strike ended on February 12, 2008.

History also shows that every writers’ strike has involved residuals. That was the case in 1953, when the Screen Writers Guild – the forerunner to the WGA – struck for 13 weeks over rerun residuals from the new medium of television. Other issues in that strike involved separation of rights in television (a form of contractual copyright), sequel payments in television for creators of original works, a prohibition on speculative writing in television, control of credits in television, minimum compensation and non-exclusive reversion of television rights.

In 1960, the WGA struck for 22 weeks over residuals from theatrical motion pictures shown on television; a 4% residual for television reruns, and for the establishment of an independent pension fund and participation in an industry health plan.

The WGA struck again 1973 – this time for four months – to achieve residuals from films shown on the new delivery systems of pay television and videocassettes, and for an independent health fund.

The pace of WGA strikes picked up dramatically in the 1980s, when writers took to the picket lines three times – more than in any other decade.

In 1981, writers went on strike for 13 weeks over residuals from the reuse of television shows on then-nascent basic cable channels. They struck again – but for only two weeks – in 1985 over the studios’ interpretation of the formula for paying home video residuals.

The guild next struck in 1988 – for 22 weeks – over residuals from the reuse of free television shows shown on basic cable, and for improvements in creative rights for the writers of original screenplays and television movies.

The WGA’s last strike, which lasted 100 days in 2007-08, also involved residuals – this time from the reuse of films and TV shows on new media platforms, including digital downloads and use on ad-supported internet services. In that strike, the guild also won coverage of content made for new media – a major victory.

Residuals Redux?

Residuals will again be a focal point when the WGA sits down with the AMPTP to negotiate a new contract next year. And for the guild, there’s considerable pent-up demand for major gains at the bargaining table. That’s because in 2020, when the WGA’s previous contract was set to expire, contractual advances the guild had hoped to achieve evaporated with the threat of a strike all but off the table as the industry was already shut down by the first wave of the Covid pandemic.

Residuals were one of the few bright spots in the WGA West’s latest earnings report, which found that residuals collected by the WGA in 2021 increased by 5.4% from 2020 to an all-time high of $493.6 million. Total television residuals increased 4.7%, while screenwriter residuals increased 6.9%. New media, the largest residual category overall, accounted for almost half of the total residuals collected at 45.2%. This is an increase over the prior year, when new media accounted for 36.7% of the total residuals collected.

Jobs and total earnings for WGA West writers, however, have both been on the decline in recent years. WGA West members got fewer jobs and less pay last year than they did in 2020, according to the guild’s 2022 Annual Report, which found that 5,951 writers reported employment in all work areas in 2021 – a 6.1% decline – while total writer earnings reported for dues purposes declined 7.7% to $1.55 billion. That’s the fewest jobs since 2016, and the lowest earnings since 2017.

Many candidates in the recent WGA West and WGA East elections said that winning increased streaming residuals will be a major goal in the upcoming contract talks, along with a host of other issues including substantially higher minimum pay rates to offset inflation; more secure pension and health benefits; greater equity and inclusion; the elimination of free work; and the curbing of mini-rooms, where groups of underpaid writers gather in advance of the production of a television series to break stories and write scripts.

And in his annual report last May, Lowell Peterson, the WGA East’s executive director, harkened back to the strike of 2007-08, saying that “As the guild’s members anticipated by striking nearly 15 years ago, digital technology has transformed how content is created and distributed, and how our members earn a living. On the TV and features side, everything has changed with the advent of streaming video on demand, including basic changes in reuse and residuals payments; reductions in the number of weeks of work and the number of writers in the room; additional pressure for free development and other unpaid work, and reduced opportunities for members to move up the…career ladder and to produce.”

He also noted that under the WGA’s current contract, “residuals for made-for-SVOD comedy/variety programs are pitiful.”

More Labor Pains

Economic pressures facing Hollywood’s conglomerates, many of which are in the midst of major cutbacks and layoffs, could force them to take tougher-than-usual positions at the bargaining table, which would only add to the prospects of labor troubles.

So don’t count out possible strikes by actors and directors next year over residuals, either.

SAG-AFTRA, which began its wages and working conditions process last month to help determine bargaining positions for its upcoming contract talks, has said that “wage-rate increases and the streaming residuals structure” will be among the issues to be bargained.

SAG-AFTRA has not struck the film and TV industry since it was formed 10 years ago with the merger of the Screen Actors Guild and the American Federation of Television & Radio Artists. SAG and AFTRA last struck the film and TV industry more than 42 years ago – back in 1980 – so SAG-AFTRA may arguably be more overdue for a strike than even the Writers Guild. In that strike, SAG and AFTRA members took to the picket lines for 95 days to demand and win supplemental market residuals from sales in videocassettes and pay TV.

SAG’s first strike against TV producers, in 1955, was for increased TV show residuals. That strike lasted 11 days. SAG struck again in 1960, and again it was over residuals – this time for residuals from films shown on television. That strike lasted 43 days.

The DGA, meanwhile, has only struck once in its 86-year history – back in 1987 – and that strike only lasted for 15 minutes on the West Coast and for three hours and 15 minutes on the East Coast before a deal was reached. And as with all the other film and TV strikes, that one also involved residuals – specifically, an AMPTP-proposed rollback of minimum residual compensation and other minimum terms and conditions that the guild defeated.

Last month, DGA leaders declared that the guild’s upcoming contract talks “will not be an ordinary negotiation.” Topping the “big issues” at stake, they said, is “increasing streaming residuals based on real-world, global value.” Other issues, they said, include “Winning strong wage increases that account for cost-of-living growth; securing our world-class Pension and Health Plans; fighting to protect the role and vision of all directors, and, in particular, television directors; Increasing diversity and strengthening the voice of under-represented people throughout the industry; improving safety on the set, and increased transparency from our employers.”

Strikes, of course, are never inevitable, but sometimes they are probable.

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