Hollywood’s brief thaw belies a long winter

Endeavor group

25/09/2023 15:56

(The author is a Reuters Breakingviews columnist. The opinions
expressed are her own.)
    By Jennifer Saba
       NEW YORK, Sept 25 (Reuters Breakingviews) - Relations
between Hollywood scribes and the studios that employ them are
starting to warm up. The union representing movie and TV writers
tentatively agreed to a new contract on Sunday, setting the
stage to end a five-month impasse. Content production is back on
the budget line for streaming services. The trouble is the
entertainment complex from acting to distribution is still
flawed.
    The Writers Guild of America, which represents 11,500
writers, didn’t reveal details of the three-year commitment,
only saying that the deal had “meaningful gains and
protections.” Content creators had been on strike since May 2,
pushing for better compensation from series on streaming
services, as well as guards against AI-generated scripts, among
other things.
    Members still need to ratify the contract that in the final
days brought to the negotiating table Walt Disney  DIS.N  boss
Bob Iger, Netflix  NFLX.O  co-CEO Ted Sarandos, Warner Bros
Discovery  WBD.O  head David Zaslav and NBC Universal Studio
Chair Donna Langley. If successful, it will end one of the
longest standoffs since 1988.
    Zoom out though and the win is tiny compared to what the
industry is stacked up against. Hollywood actors – some 160,000
of them – are also at odds with studio heads and are still on
strike. They too want to share in the spoils of a successful
movie or TV series on streaming services.
    Charter Communications’  CHTR.O  fight with Disney earlier
this month was pivotal in paving the way for other distributors
that were previously forced to take channels they didn’t want.
Charter now doesn’t have to carry eight Disney networks
including FXX and Disney Junior, while Disney also is giving
Charter’s customers access to its ad-supported streaming
services for no additional charge. Meantime, WWE and Endeavor’s
 EDR.N  TKO Group’s  TKO.N  stock fell last week on renewal
rights for wrestling TV shows including “Smackdown” and “Raw”
that were disappointing.
    The cost structure in the entire ecosystem surrounding
content is working against the likes of Disney, Warner Bros
Discovery and Paramount Global  PARA.O , whose shares fell on
Monday after the news of a writers’ deal. EBITDA margins at
Warner Bros Discovery alone are estimated to shrink to 27% next
year compared to 42% in 2019, according to LSEG. Disney and
Paramount exhibit similar declines. The brief thaw belies a long
winter.
    Follow @jennifersaba on X
    
             
    CONTEXT NEWS 
The Writers Guild of America announced on Sept. 24 a tentative
agreement with the Alliance of Motion Picture and Television
Producers setting in motion the end of a five-month strike. The
WGA, which did not reveal the details of the three-year
contract, said the deal had “meaningful gains and protections
for writers.”
    The union representing 11,500 movie and TV writers went on
strike on May 2 to fight for residual payments tied to streaming
services, minimum guaranteed staff dedicated to scripted TV
series and artificial intelligence protections to guard against
lower pay.
    SAG-AFTRA, the union representing 160,000 actors, remain on
strike that started July 14.

 (Editing by Lauren Silva Laughlin and Aditya Sriwatsav)
 ((For previous columns by the author, Reuters customers can
click on  SABA/ 
SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS https://bit.ly/BVsubscribe
 | jennifer.saba@thomsonreuters.com; Reuters Messaging:
jennifer.saba.thomsonreuters.com@reuters.net))