The Two Strikes That Ground Hollywood to a Halt

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1:16Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Weisenthal. And I'm Tracy Alloway. Tracy, you watching anything good on TV these days? No, I'm serious. I just finished watching The Bear, which I know you also watched, right? I did. I switch off usually between watching like some new show and then going back and watching all six seasons of The Sopranos and then watching a new show and then The Sopranos again. So I think I recently right before The Bear, I did my seventh viewing of The Sopranos. It's one of these things I never I don't know what to watch now. I don't have a new show.

1:49Do you need suggestions? I need suggestions. Actually, I just finished watching all of Cheers, which I've never seen really. like it was kind of it was always in the background i was a big fraser fan so i thought i should try cheers and i really enjoyed it i want to watch northern exposure but it's not on any of the streaming services i would love to re-watch that too i remember my mother loved that show um okay well we are not we are not actually doing tv reviews are we we could but you know it is true there is a lot of archive tv material to watch you don't even need to watch new shows no uh that is true.

2:22You could endlessly watch the back catalogs of old TV, which is fun and entertaining, but has also given rise to a new issue for us to worry about. Right. And so, you know, right now we are in the midst of a sort of, I think at least two strikes. I think that the writers, the screenwriters in Hollywood have been on strike for at least a few months now. The actors are on strike. So while there's plenty to watch, And actually, people are excited about going to the movies again for the first time in a while. Like, my understanding is that basically nothing is getting made right now. Yeah, this is actually I know we said there's tons of TV to get through, but I do also worry about what if some of the good stuff shuts down.

3:02But more broadly. And I do want to know whether the guy gets out of the freezer after in the bear. Right. Because he got caught in the freezer at the end. So I hope there's a third season that resolves that. You know how they call everyone chef on the bear? It's like, yes, chef. Yeah. OK, chef. Should we start calling each other co-host? Yeah. Yes, co-host. Yes, host. Yes, host. Okay. All right. Okay. So there is a concern over future content, but this also fits more broadly into some of the more active labor discussions and things that we've seen going on recently. And we just finished up that episode about the United Auto Workers Union and their fight against the big three.

3:38And it feels like these are two very different industries, car manufacturers and, content creators for Hollywood, but there are some similarities and also key differences underlying both of these labor movements. Yes, host. You know what? Let's just get started. We have two perfect guests to describe to help us understand what's going on with Hollywood and the unions right now, both of them in-house here, our colleagues. We're going to be speaking with Lucas Shaw. He's the managing editor for media and entertainment at Bloomberg and the author of the excellent Screen Time newsletter. And we also have Josh Idelson, senior reporter for Bloomberg and Businessweek, who covers organized labor.

4:21So Lucas and Josh, thank you both so much for coming on OddLots. Thanks for having us. Thank you for having us. Lucas, why don't you give us the state of play generally right now in Hollywood? How many strikes are going on? Who's on strike? Who isn't on strike? Where are talks? How long have they been going on? Give us the quick summation of where things stand. There are two strikes happening right now, which is the first time that that has happened since 1960. The first union to go on strike was the Writers Guild, which was at the beginning of May. So they've been on strike for about three months.

4:55The last writer's strike was in 2007, 2008. That lasted for 100 days. This one looks almost certain to blow past that. The actors joined the writers on strike in the middle of July. And so that's been going on for a couple of weeks. The other guild that had a deal coming up this year that was a big deal was the directors. They did make a deal with the studios. And so they are not on strike. But you've now got, you know, we've had months of writers on the picket lines outside of studios chanting and getting attention. And now the actors have joined them. And the studios haven't made a lot of progress in trying to sort it out with the actors.

5:31They are now trying to get back at the table with the writers. But from everything we've seen, the studios and the writers were really far apart, not even close. The studios and the actors were a little bit closer, but still a lot of ground to make up. And nobody's really certain when this is going to end, which is incredibly disorienting and destabilizing for most of the people who work in the entertainment business and all of the industries that work around it, whether it's, you know, restaurants or stylists or transportation. So talk to us a little bit about the issues at play here. And, you know, Joe brought up the idea of the back catalogs, which I guess have become more valuable given the rise of streaming.

6:07And it seems like writers or actors involved with those want a bigger piece of the pie. So what exactly are the complaints here and how do they tie in with the way the media business has sort of changed over time? Yeah, so the writers and actors have slightly different asks or proposals. But the unifying theme undergirding this dispute is there's been this dramatic transformation in the entertainment business, which every consumer, every viewer knows about because it's streaming. Streaming has replaced cable TV or is in the process of replacing cable TV. That has changed how projects are made, how they are funded, and how talent gets paid.

6:49And the writers and actors feel that they are not receiving enough money from these big media companies and from streaming services in particular, and that the ways in which they are paid make the job, which was already not the most secure position, even less secure. And so they are looking for ways that protect themselves a bit more. At the same time, the biggest reason that I think there's so much labor unrest is because of that transition. Most of these media companies also are not making as much money as they used to because their cable networks are less profitable and they're pouring a ton of money into these streaming services, most of which, other than Netflix, lose money.

7:31Josh, let me bring you in. One of the themes that we've been talking about on recent episodes, and it's just out a lot is this idea of newfound energy in the labor movement more broadly. And I don't know if their actual number of strikes is up, but we definitely see a new attitude. We saw it with UPS, we see it with UAW, et cetera. When you look at the unions in Hollywood, how similar is this like, is the vibe, is the sort of political stance sort of similar to what it was maybe in 2006? Or has there been also a change to in the sort of leadership and tactics that we see with some of these Hollywood unions?

8:11So having covered the labor movement for more than a decade now, it has often felt like every six months or year or so, someone wants to grab something to declare that the long declining labor movement in the US is revived. And so I come at this generally with a sense of skepticism. And we could go year by year and I could tell you what the cool thing was that was supposedly going to reverse the decline of U.S. labor unions and didn't. That said, what's been happening the past year and a half really is remarkable. The most stunning thing that we've seen is that longtime non-union companies, the most famous companies in the United States in many cases, where for the first time, workers actually won union recognition at Starbucks, Amazon, Apple, other places like Trader Joe's, Microsoft.

9:07And those workers so far have not won union contracts. But the fact that these places that were seen often, including by union organizers as impregnable, suddenly now have legally recognized unions is a very significant shift and one that has impacted how workers think about their jobs and about what's possible at other places. And also, I think, has impacted the sense of ambition and possibility for workers who've had a union for a long time. And some people may remember in 2021, there was discussion about what was being called Striketober, where there were lots of union members authorizing or going on strikes.

9:51What's happened since then is more significant by the numbers. This year has been a big year for strikes already, not compared to the 1950s. If you go to when I Love Lucy was on, we may remember that as also a great show, which I have rewatched. Probably on streaming, I'm guessing, although So there could be an I Love Lucy channel I don't know about because I cut the cord a long time ago. Every year that I Love Lucy was on TV, there were, by current standards, tons of people going on strike in the U.S. There were close to or over a million people involved in work stoppages every one of those years in the 50s.

10:33We are far from that because unions are a much smaller share of the U.S. workforce these days in terms of the workers they represent. But by recent standards, this has been a big year for strikes and for potential strikes like the one that almost happened at UPS, the ones that could happen in the auto industry, the one that hypothetically could still happen at UPS if the Teamsters rejected the contract. And I think we're seeing that for a number of reasons, including how the pandemic changed people's mindsets, including what's been going on with the labor market, and also changes in leadership at some of these unions as workers have elected more militant leaders to represent them.

11:19or as with the actors, members have been pressuring the leadership to take a more aggressive posture. So I think it's fair now to say that at a minimum, the vibes have shifted here. So one of the things that came up in our recent episode on the UAW strikes or potential strikes was this idea of, you know, workers actively banding together, but not just in their own industry, but with other industries. And I think this is something I actually learned a term for it, horizontal solidarity. There's a new phrase. But this is something that we've seen also in relation to some of the Hollywood actions.

11:59I think we've seen members of the Writers Guild like show up to the Teamster rallies and vice versa. You know, Teamsters refusing to make deliveries to the studios and stuff like that. But how much of that is a sort of new tactic and how does it make these actions more effective? Well, if you go far enough back in U.S. labor history, you can find examples of attempts to shut down a whole city in a general strike with workers from all sorts of industries. But more recently, there has been more work stoppages and more high-profile labor disputes and potential or existing strikes and organizing campaigns than we had seen in a while, particularly at really prominent companies where lots of people notice what's happening, whether it's because they see it on TV or because they know someone who works there or because they depend on their UPS delivery person and have a conversation with them.

13:02One of the phenomena that our colleague Spencer Soper has been writing about is the role of UPS in Amazon's supply chain, and that the drivers for Amazon will now have more interaction with drivers from UPS who just got this contract deal that includes very significant raises. And so Starbucks workers, for example, have inspired people at all sorts of companies, including Apple. We've seen workers at places that some people don't think about when they think about the labor movement historically, like graduate students doing teaching and research who have come to think of themselves more as workers and as having more in common with workers they see taking action other places.

13:49Lucas, just on the specific Hollywood actions that we've seen, is it significant at all that SAG and the WGA are striking at the same time? And should we think of those two different strikes as two different labor disputes, or do they share similarities? It's incredibly significant. I mean, again, it hasn't happened in six decades, and it has shut down the industry for months now. You know, the writers' strike prevents a lot of development of new projects. It prevents studios from buying things from writers because writers and studios are not supposed to be communicating. It shuts down work on a lot of TV shows because those are often sort of written as you shoot them.

14:33The actors adds to that because, you know, you could have a movie that was in production, like the new Deadpool movie with Ryan Reynolds, the script's done, they're in production, it's supposed to come out next year, the actors go on strike, that has to shut down. Suddenly, Disney has no big tentpole movie for next year. Actors can no longer promote their projects. You have a bunch of movies coming out in the fall, where some studios are pushing because if the talent in them can't promote them, they fear that it will impact how that performs. And so the combo strike means that it's not just something that's an inside Hollywood story, something that starts to affect what the average person can see and feel.

15:09As to whether you can see them as sort of distinct strikes or one and the same, I think it's a little bit of both. You know, there are issues that are very specific to writers around being on set or the number of people in a writer's room or all these things that the actors don't care so much about. And same deal with the actors. You know, the actors have some issues with their pension plan, which the writers do not have. But there are a number of kind of big picture thematic problems that unify them. That includes residuals, payments for projects being re-aired. It includes how much they get paid for people watching overseas on streaming services.

15:42It's being able to share in the upside of a successful show and is also one of those issues that has been unifying across the different unions.

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17:20Go to public.com slash market and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash market. Paid for by Public Investing. All investing involves the risk of loss, including loss of principal. Brokered services for U.S.-listed registered securities, options, and bonds in a self-directed account are offered by Public Investing, Inc., member FINRA, and SIPC. Crypto trading provided by XeroHash. Complete disclosures available at public.com slash disclosures. I definitely want to get into AI a bit more and how it affects writers and actors and how the studios are thinking about it.

17:53But I also just want to go back to this question of Lucas within the context of these unions. Some actors make an insane amount of money, and we all know that. And then some actors, they have to take a side job waiting tables or attending bar or teaching an acting class or something like that. I think it's probably the same with writers and so forth. And so, of course, when we talk about, say, UPS or the United Auto Workers, of course, this tiering question, how do the Hollywood unions maintain solidarity when the economics of their own members are so skewed and so diverse? Yeah, I mean, solidarity is one of the bigger challenges for these unions.

18:32You know, Josh was talking about some of the changes in the approach and the membership of these of these unions. And I think if you talked about members of the unions and the studios, the unions in Hollywood today feel very different from how they did 10 or 20 years ago, you know, far more progressive, far more activist. and at least in the case of the writers unified, you're right that there are a lot of people in these unions who make a lot of money, which I think sometimes makes them sort of unsympathetic figures because it seems like rich Hollywood actors and writers fighting with rich Hollywood studio chiefs.

19:04And there's a degree to which that's true, obviously. You have movie stars who are in these unions or you have writers like Shonda Rhimes and Ryan Murphy who've made hundreds of millions of dollars who are in them. But that's a really small layer at the top. Most of the people in these unions are very much working class. A lot of them have second and third jobs, which ironically makes them able to sort of hang on a little bit longer. There's not the same pressure to reach a deal really quickly. This strike can go on for months and it seems like everybody sort of figures out a way to make it work.

19:35They've been able to really get the wealthier members, especially in the Actors Guild, on their side. There was a famous letter signed by a few hundred of the richest and most famous actors in Hollywood, basically telling the leadership of the Actors Guild, like, don't make a big compromise or don't compromise your values. Go for a big deal. We support you. I think the writers, it's a little murkier. You do have some writer producers who are maybe not on board with everything, but they're not going to come out and say it. And that letter ended in an interesting way because they were telling the leadership of the Actors Union, we're concerned you may not be as willing to go out on strike as we are.

20:13and the leader of the union, Fran Drescher, responded by adding her own name to the letter to herself. Can I just ask, on the actor's side, there was one demand that I saw, and it kind of reminded me of some of the issues, Joe, that we saw with truckers idling at the ports. And, you know, they sign up for a job that's for X amount of money and supposed to take X amount of hours or days, and then they wind up spending a lot of time just waiting to take on the loads. And the actors are complaining about not being paid for audition times, which if anyone has ever done acting or modeling, you know that you can spend all day going to castings and come away with nothing in some cases.

20:57How thorny is that issue? And what are the proposals actually to fix that? Because it seems like a difficult one. The issue of free labor is one that I'd say both the writers and actors are unified in. And obviously, the type of labor is different. But writers don't want to have to do a bunch of drafts of something without getting paid more money. Actors don't want to have to spend all this money going for auditions without getting paid something in return. I'm not sure how that's going to get solved. There are a bunch of asks that the writers and actors have made that are fairly fundamental structural changes to how the industry works, those being some big examples.

21:34And I don't get the sense from the studio side that there's a lot of interest in giving on them. You know, they feel like if they give the writers and actors more money on some of the core issues that the free labor thing may be overlooked. But there's no question that that Hollywood has long preyed on the fact that there are thousands, if not millions of people who would love to be famous. And so they can get them to do a bunch of work for free. Well, this is going to be my other question, which is how much leverage do the studios actually have here? Because it seems there is this endless stream of starry eyed wannabe stars who potentially would be more than happy to, I guess, break union lines and go for things.

22:21It's a really good question, and I'm not sure I know the answer. I think that the conventional wisdom is that the studios and big media companies have more leverage than the writers and actors, because at a certain point, you're going to have a lot of these writers and actors who have bills. If they don't work and they don't make money for months and months and months, it's going to start to negatively impact their lives in ways that they won't be able to make rent. There are all these horrible things that could happen to them. the media companies, they will suffer a little bit from not having new product and not being able to make money.

22:54But a lot of the ways those companies make money are unaffected, right? They have deals for their cable networks of pay TV distributors where they get paid fees every month, they get paid no matter what, right? As long as the ratings don't fall off a total cliff, they have backlogs of programming and library that they can put on, right? CBS doesn't have as much new programming to put on in the fall because of the strike, but they can still do reality TV, which is not part of these. So there's going to be Survivor. They can still do news. So there'll be 90 minutes of 60 minutes. They can still do sports.

23:23So there'll be football coming in the fall. And then they're part of a company where they can take a show like Yellowstone, that's a big hit for the Paramount Network, and put it on CBS to an audience that probably hasn't seen Yellowstone before. What about international TV? I mean, that's a huge thing. When I turn on Netflix, it's like, here's a hot show that's in Korea or a show from Israel or a show from Poland or something like that. Does that implicitly undermine the bargaining position of the US-based actors and writers that presumably there are a lot of people working internationally who are not engaged in the same actions right now?

23:58I don't know that it's undermining them, but it has put some of the unions abroad in an uncomfortable position, right? I think people in the UK in particular are a little uncomfortable because they want to show solidarity with their peers in the US and there have been marches, you know, famous actors like Brian Cox from Succession shouting, AI will not replace us or to screw you studios. But if you have productions that are filled with actors that are not in the US unions, they can continue, right? Like House of the Dragon, the Game of Thrones spinoff for HBO, pretty much all the actors in that work in the UK.

24:31And so they can keep shooting that or in South Korea, which has become a huge producer of film and television, those productions continue. And that's why a service like Netflix is in a fairly good position relative to some of its peers, because so much of its productions come from outside of the U.S. Josh, I'd be curious to get your thoughts on the leverage held by corporations in, you know, 2023 versus, say, a decade or even two or three decades ago. Well, to take a step back, the U.S. legal system gives companies a lot of leverage over workers with or without a union. People in the United States generally can be fired for almost any reason, with a couple exceptions.

25:16That's not the case in most of the industrialized world. The process of forming a union and getting it recognized is difficult. As we've seen at places like Starbucks, even when workers successfully, legally, formally form a union, actually getting a union contract can be difficult and may not happen for years, if at all. And in contract negotiations, both sides are legally required to negotiate in good faith. But the penalty for not negotiating in good faith, if you're the company, generally is being ordered to come back and negotiate in good faith. There are no punitive damages for violating labor law as a company, the way that there could be if you were polluting the river or something.