‘A Slap in the Face’: How SAG’s Deal With Hollywood’s Studios Blew Up
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Outside of Netflix and Warner Bros. Discovery’s New York headquarters, a crowd of striking actors and supporting union members stretched across the street Thursday. The chant “one day longer, one day stronger,” echoed off the walls of a nearby theater and coffee shops. The night before, actors learned that after five days of face-to-face bargaining, Hollywood studio executives decided to step away from the table. To Jill Henessy (Law & Order, Crossing Jordan), the studios’ decision to suspend discussions has only energized the movement.
“If they thought they were going to demoralize us by walking away from the table last night, they’re obviously wrong because this is one of the best turnouts we’ve had,” Henessy tells Rolling Stone.
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After the Writers Guild of America struck a deal with the Hollywood studios last month, late night talk shows hosted by Stephen Colbert, Jimmy Kimmel, Seth Meyers, John Oliver, and Jimmy Fallon (the latter despite a damning Rolling Stone investigation) returned in the first days of October. Writers on Abbott Elementary, Grey’s Anatomy and Showtime’s Yellowjackets also got back to work. (The WGA writers on The Drew Barrymore Show, however, declined to return after their host attempted to continue the show without them during the strike.) The WGA deal made many members of the Screen Actors Guild and the American Federation of Television and Radio Artists, including Anthony Rapp (Rent, Star Trek: Discovery), optimistic they’d be next in line.
“There was understandable great hope that our deal would follow soon after,” Rapp tells Rolling Stone. “So there was a certain amount of bated breath, hope, and anticipation for that to happen and now that they’ve done what they’ve done, they’ve lit a new match to fire everybody up even more.”
Rapp, a SAG-AFTRA negotiating committee member, shares that Hollywood executives, or the Alliance of Motion Picture and Television Producers, made no significant moves on key issues to reach a resolution and refused to counter their latest package.
“We were still grinding it out,” he says. “We were still ready to be there as long as it took. So I was a little surprised that they decided to walk away.”
Hollywood executives claim that the gap between both groups became “too great” and conversations were no longer productive, according to an AMPTP press release. On the other hand, the SAG-AFTRA negotiating committee alleged that Hollywood CEOs gave an offer that was “shockingly, worth less than they proposed before the strike began.” With more than 90 days on the picket lines, union members discuss what happened at the bargaining table, express their frustration with the delayed deal, and show support for struggling below-the-line workers.
The WGA announced a tentative deal with Hollywood studios and streamers on Sept. 24 after nearly five months of striking. The deal came after Hollywood execs presented an Aug. 11 counteroffer that “failed to sufficiently protect writers from the existential threats that caused us to strike in the first place,” wrote the WGA negotiating committee. The WGA ratified the new contract Oct. 9, which included wage increases for streaming services, minimum staffing levels, and AI protections.
“The WGA got significant movement on every one of their proposals that is not costing the studio’s money that will break the studios,” Rapp says. “The same thing applies to us. They could end this strike by negotiating in a fair manner right now and they’re refusing to do so.”
On Oct. 2, actors met with Hollywood executives to resume negotiations for the first time since the strike started on July 14. Both sides met for five days on and off, and the negotiations included studio bigwigs like Netflix co-CEO Ted Sarandos, Disney CEO Bob Iger, Warner Bros. Discovery CEO David Zaslav, and NBCUniversal chief content officer Donna Langley.
At Wednesday’s half-day meeting, SAG-AFTRA national executive director and chief negotiator Duncan Crabtree-Ireland says things ended about half an hour early, with no indication that something they presented was problematic or would lead the AMPTP to break off negotiations. In fact, they had a full day of negotiations scheduled for Thursday.
Later that Wednesday, Crabtree-Ireland received a call that the talks were off.
“I am very disappointed and frustrated at their walking away from negotiations because no matter how you feel about somebody else’s offers or counteroffers or proposals, the only way to move forward is to have a dialogue, to have communication,” Crabtree-Ireland tells Rolling Stone.
During Wednesday’s meeting, SAG-AFTRA presented a package that changed their streaming revenue share proposal to a subscriber-based one, which Crabtree-Ireland calls a huge compromise.
At the start of bargaining in June, actors introduced a revenue-sharing model that allowed cast members to “share in the success of high-performing shows” and gave actors a 2% cut of the revenue. At the bargaining table during the first week of October, they trimmed down their proposal to a 1% cut.
“The CEOs made clear over the course of a couple of days in our negotiation process [that] they simply refuse to consider any proposal that was attached to the revenue stream, they just wouldn’t do it,” Crabtree-Ireland says.
SAG members made a final revision Wednesday by changing it to a subscriber proposal, i.e. Hollywood streamers would pay performers based on the number of subscribers and the share of viewership instead. The change would cost companies 57 cents per subscriber each year, or less than the cost of a postage stamp, Crabtree-Ireland reasons.
Back when both the writers and actors were on strike, Netflix saw a 3% rise in revenue, compared to the same time last year, totaling $8.3 billion. The company’s crackdown on password-sharing led to a subscriber increase of 5.9 million, reaching a global total of 238 million subscribers.
“When you make a huge concession in the direction of the other side of the negotiation, you’d normally expect the response to that to be favorable,” he says. “You expect an embrace, not a slap in the face.”
Although the meetings were intense at times, Crabtree-Ireland says they remained professional and reasonably cordial.
Sarandos agrees. During a Bloomberg conference Thursday, he said the two sides have had productive talks and the streamers offered a “success-based bonus,” which resembled the writers’ deal. It was the 57 cents per subscriber, or “levy” on subscribers annually, that pushed them over the edge.
“But a levy on top of our revenue or per subscriber, with no insight into the revenue per subscriber or anything, that just felt like a bridge too far to add this deep into the negotiation,” Sarandos said during the conference.
Crabtree-Ireland says that Sarandos’ statement is offensive and a mischaracterization of their proposal.
“This is not a tax,” he says. “This is people who’ve done work asking to be fairly compensated for their work.”
Both sides also butted heads on the total cost for the proposal. In a statement from Hollywood executives, the proposal would cost Hollywood companies more than $800 million, or one dollar per subscriber, creating an “untenable economic burden.” The SAG-AFTRA negotiating committee stated the subscriber-pegged proposal would only cost $500 million.
NBCUniversal’s Langley, who was also at the Bloomberg event, said the studios will spend “as much time as it takes” in order to reach a resolution, and that getting the industry back to work was their “goal since day one.”
Hollywood studios and streamers maintain that they met the actors’ demands on “casting, including guardrails around self-tapes,” along with virtual and in-person audition options and accommodations for performers with disabilities, according to the AMPTP. They say they also offered actors the same terms including wage increases, streaming residuals, and viewership bonuses that were approved by the writers’ and directors’ unions, but the actors rejected it.
SAG-AFTRA alleges that the Hollywood CEOs did not issue AI protections for actors, wage increases that keep up with inflation, and are recycling a strategy they used on the Writers Guild to discourage solidarity.
“They were small, incremental moves in our direction that weren’t enough to close out those issues,” says Crabtree-Ireland, in reference to self-tape auditions, schedule breaks, and working with singers, dancers, hairstylists, and makeup artists.
The Wire creator David Simon, who negotiated with the studios to reach a fair deal for writers, says Hollywood execs have stuck to one playbook and tried to turn parts of the union against each other, causing division.
“The greed is paramount and their belief is that workers are not united. [It] always has to be tested,” Simon tells Rolling Stone. “I’ll say this: the AMPTP, they butchered our negotiation. They’re butchering this one.”
Simon says the studios offered writers the same AI protections given to the Directors Guild, but writers refused. Earlier in the strike, SAG-AFTRA reported that the industry wanted to pay background actors a low daily rate to create digital replicas of them. The AMPTP has since said SAG-AFTRA “mischaracterized” their proposal, and will ask for advance consent from the performer and the background actor. But actors are asking for a bit more: consent in advance if their digital replicas are used in a cinematic universe or franchise project.
“What was very clear when the CEOs came in and had to actually roll up their sleeves and work with us was that their negotiators were incompetent and were rooted in a dynamic that had become antiquated,” Simon says.
On the topic of residuals, or payments for TV and film reruns, actors maintain their checks have vastly diminished on streaming services. Jaimie Alexander, who starred in NBC’s Blindspot, says her residual payouts tanked when the show got picked up by Hulu. Now, with Hollywood executives suspending talks with the Actors Guild, it’s made her question her future with streaming.
“I don’t care to work for anyone, to be honest with you,” Alexander says, in reference to streamers and studios.
Alexander adds that she sympathizes with entertainment crews who’ve been financially strained by the ongoing strike. Hollywood labor unions, including the Writers Guild, Directors Guild, and crew unions issued a statement Friday urging Hollywood studios and streamers to resume negotiations immediately and address performers’ needs.
“Each day a fair contract addressing actors’ unique priorities is delayed is another day working professionals across our industry suffer unnecessarily,” the statement reads. “At this point, it should be clear to the studios and the AMPTP that more is needed than proposals which merely replicate the terms negotiated with other unions.”
At Netflix’s and Warner Bros Discovery’s New York offices, actors beat drums and rang cowbells as strike captains hollered chants about fair contracts. As they inch closer to 100 days on the picket lines, with no announcement of future talks with Hollywood executives in sight, actors still plan to cause a commotion on the front lines.
“There needs to be boundaries put in place, true boundaries, things that all of us can see, not just taking the studio’s word like we have been for so long,” Alexander says, hoisting a SAG-AFTRA sign. “Because in all honesty, we’re not on billionaire’s retreats. We’re trying to feed our families.”
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