Hollywood’s writers and producers are to sit down Monday to begin negotiations for a new contract, talks that come amid a landscape far different from the one just three years ago, when the expiring deal was forged.

The expanding list – and impact – of streaming platforms such as Netflix, Hulu, and Amazon means more work is available to writers, but the growth of cable and streaming outlets has also changed the way people watch TV. New-media series often have fewer episodes and a different work schedule than traditional network series, which might leave writers beholden to extended contracts with less earning power.

Those changing realities, which also impact writers’ lifeblood residual payments, have many Writers Guild of America, West members talking strike.

While neither the WGA, headed by Howard A. Rodman, nor the Alliance of Motion Picture and Television Producers would comment on the talks or the possibility of a strike, sources close to the situation said writers are growing increasingly vocal about a possible work stoppage.

If history is a guide, the economic fallout of a strike could be huge.

A bitter 2007-08 walkout sidelined an estimated 12,000 writers and cost the L.A. economy as much as $2.5 billion. According to a Milken Institute report, the strike, which ran from November 2007 to February 2008, was one of several factors that tipped California into a recession in early 2008. A five-month walkout in 1988 – the longest strike in WGA history – resulted in a reported $500 million in lost wages, more than $1 billion in today’s dollars. It also led then-NBC President Brandon Tartikoff to threaten to dig up decades-old TV scripts and reshoot them to provide content during the strike.

Whether or not a strike is likely to occur this year depends on whom you ask. Entertainment attorney Alan Wertheimer, a key negotiator who worked with writers during the 2007-08 negotiations, said in an email that he has not been following this year’s talks because, “(T)he chances of a work stoppage are so slim,” though he acknowledged he could be wrong.

Wertheimer, a partner with Century City’s Jackoway Tyerman Wertheimer Austen Mandelbaum Morris & Klein, added that the best predictor for what writers can expect from a new contract are the improvements negotiated by the Directors Guild of America, which ratified its contract in January. That deal included wage increases of 2.5 percent in the first year and 3 percent in the second and third years of the three-year contract. It also includes a big bump in residuals for what’s termed as high-budget subscription video-on-demand programming.

The deal also establishes residual payments for related foreign subscription streaming services.

“This is typically a pattern bargaining situation,” Wertheimer said, adding that anyone looking to predict what the writers will do should “investigate the areas where the WGA think the gains made by the DGA are inadequate.”

Different view

A veteran TV writer, who attended the most recent WGA members’ meeting in mid-February, disagreed with Wertheimer’s assessment.

“It is very unlikely that the writers will accept the DGA deal this year,” said the writer, who asked not to be identified. “The directors’ contract does not square with the needs of writers.”

The current WGA agreement, which will expire May 1, increased most minimums by 2.5 percent for the first year, increasing to 3 percent over the three-year contract. It also increased fixed residuals by 4 percent in the first year rising to 5 percent in the third year.

The contract also increased streaming new-media residuals from 3.5 percent to 4 percent of the applicable minimum. However, a negotiating committee memo said the streaming increase does not reflect the “explosive” revenue production companies see from the streaming market, a market that has upended traditional models.

Part of that disruption is in how residual payments – often the mainstay of a writer’s income – have been affected.

“Residuals are where the rubber meets the road in terms of technical change,” said Jonathan Handel, an entertainment attorney with Century City’s TroyGould and a contributing editor at The Hollywood Reporter. “The issue becomes, What residual formula should apply when content is either made or reused in the new medium du jour? It’s always an exercise in taking a round peg and arguing about whether to put it in a round hole or a triangular hole.”

Weekly wages

Another concern fueling strike talk is a downturn in weekly compensation for writers on TV series, a dip directly related to the way streaming has changed consumption. Some observers argue that new streaming platforms, as well as the popularity of video games and other forms of digital entertainment, have weakened writers’ bargaining power this time around because audiences are less dependent on traditional series TV.

WGA minimums vary widely depending on project and platform. Under the current deal, a staff writer on a network series contracted for 40 weeks gets a minimum of $3,662 a week. The WGA’s 2016 annual report found that total TV writers’ earnings fell to $803 million in 2015 from more than $819 million in 2014 – a drop of more than 2 percent.

Writers and industry analysts said the decline is partly due to a change in what the term “TV series” means. While writers for network shows can still count on 44 weeks of steady work during a 22- to 24-episode season, those working on cable and streaming series can’t depend on the same stability. Many of those shows produce as few as 10 episodes a season and do not operate on a weekly schedule. What’s more, extended contract options often prevent writers from accepting other series work during downtime.

Should a strike take place, live weekly TV programming would be hit first. “(T)he first to be affected would be late-night shows,” Handel said. “The monologues are written by WGA writers that same day.”

Soap operas would come next, then sitcoms and dramas on networks and cable. While theatrical movies and shows for subscription streaming platforms are often produced further in advance, those projects could still be affected during a work stoppage.

“Even if the script is completed, many movies require the original writers or additional writers for revisions during production,” Handel said.

TV’s pilot season will end on May 1, but studios usually hire staff writers for series in mid-April to late May, he added, noting that the staffing process, along with the summer pitch season for 2018 pilots, could be halted by a prolonged strike.

“There are a lot of scripted shows and those scripted shows do not live in a deep well,” Handel said. “If there’s a strike, even now, television would start to go dark.”

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