SC39 - Sidecast: The 2026 MBA

0:01John August:Hey, this is John. And this is Drew. And this is a Script Note Sidecast, a short episode about one thing. Drew, we have not done a sidecast in a couple of years, I guess. Yeah, since 2023, probably. Yeah, those sidecasts were all about the negotiations and the strike back in 2023. This sidecast is about negotiations, but no strike. Over the weekend, the WGA reached a deal with the studios on the 2026 minimum basic agreement, the big contract that covers all of our work. The details of that agreement are now in the hands of members to vote upon. Last time you were a member of the negotiating committee, but this time you were the co-chair.

0:39John August:I was the co-chair along with Danielle Sanchez-Witzel. We had a fantastic committee of writers from both the West and the East, a few months of preparation, and then it was three very intense weeks in the room negotiating with the AMPTP. If you're a WJ member, you should have already gotten an email about Zooms this Saturday and next Wednesday to talk you through the deal and answer member questions. And if you are a member, you should definitely attend. But if you're not a member, you might still be curious about what's in the deal. So I thought you and I could spend a few minutes talking through it.

1:12Yeah, let's do it.

1:13John August:All right. So going into this negotiation, there was one clear priority. We needed to secure more money for our health plan. So after the five-month strike in 2023 and the industry-wide contraction, the fund for our healthcare was running dangerously low. How low is dangerously low? Well, we were on track to run out of money by the end of the year. Oh, low. Yeah, low. So we needed to refill that in order to stabilize the fund and put us on a sustainable path. We also needed to protect and defend everything we'd want in 2023, including writers room staffing and our protections in AI. Plus, we had specific things we needed to win for screenwriters, including a new page one rewrite, getting more writers covered by the guaranteed second step.

1:59John August:And of course, we always needed to raise minimums and residuals, especially for foreign streaming. So I remember in the 2023 negotiations that there was this two column list of what the WGA wanted and what the AMPTP was offering. Was it sort of the same situation here? We never got to the two column format, but it's the same basic idea. So the WGA comes in with a list of proposals. The AMPTP has the list of their proposals. You talk through them and then you start negotiating. And in some cases, you're able to meet the middle. But a lot of cases, we're rejecting their proposals. They're rejecting ours.

2:33John August:You might agree to mutual withdrawals and get kind of focused down to those key core issues. And this case, obviously, it was health. Well, I saw in the trades, it's like 280 million in new money going towards health. But I assume it's, I mean, the AMPTP is probably not just writing one big$280 million check, right? Exactly. And of course, the AMPTP is not kind of one thing. It's a consortium of all the different studios and collaborations. So going into this, we were seeking a one-time payment, which the company's rejected. Instead, we got really significant increases to the rates and contribution caps for health and pension.

3:08John August:So here it's worth explaining a bit more about how our health fund is actually how it actually works. Because health and pension are percentages applied on top of money that is paid to writers. So that money goes into special accounts that are managed by joint trustees. The trustees are both from the guild and from the companies. So for every dollar that a writer gets paid, a specific amount on top of that is put into the health fund. Except that when you reach a certain cap, the companies no longer have to kick in any new money on that project. And those caps have been set artificially low for way too long.

3:42John August:So one of the main ways we needed to raise money was by increasing those caps. For example, for a screenwriter, that cap was set at$250 ,000 per project. So if you made$300 ,000, you didn't get any additional contribution on that 50K. So in this new deal, that cap increases to 400K in year three. And there's similar increases for TV, including overall deals. So raising those caps is how you bring in more money. So does all that new money mean that the health plan is safe? Safer? The problem is that if healthcare inflation continues at 10 % or 12%, it will eventually eat everything. It'll eat the entire economy.

4:21John August:That's just math. So you can dump all the money you have into it, and it still won't be sustainable. So the plan has to change as well. So you have to restrain costs. So in the materials we sent out to members, we talk about a new plan option called Centivo, which is basically the UCLA system and Mount Sinai and New York. It has much lower premiums and deductibles. And for a lot of members, I think particularly newer members, they should probably switch to Centivo. We also have a service called Lantern for surgery, Hinge Health for PT. They all mean less money out of pocket for members and lower prices for the plan.

4:56John August:But even with all that, writers are still going to be spending more for their healthcare. That's just the reality. Monthly premiums are going to go up to$75 a month for Anthem or$25 a month for Centevo. And a lot of Americans right now who are listening to this, who are outside of Hollywood, are laughing about how low those premiums are. But you have to understand for WGA members who are used to$0 premiums, that is a big adjustment. I suspect we also have international listeners who are listening and shaking their heads at how absurd the American healthcare system is. And you know what? Fair. In this negotiation, we're trying to make the best we can of a terrible system.

5:32And the more you dig into the minutiae of health insurance, the more you long for systemic change because it does not make sense how we do things here. So what I'm hearing is you didn't solve American healthcare in the negotiation. No, Drew, we didn't.

5:48John August:Not even close. We stabilized our health fund and hopefully made it sustainable so that it's not always a crisis. And just doing that took hundreds of millions of dollars. That's what it came down to. Well, you said another big topic was AI. And in 2023, the Guild was, you were the first union in the country to establish some big protections on AI. What were you aiming for in this round? Yeah. So for listeners who don't know, in the 2023 strike, we established that a writer is a human being, that material generated by AI systems, it's not literary material or source material for the purposes of our contract.

6:25John August:That means AI can't rewrite you, and you're never fighting for credit against an AI system. The companies also can't require you to use AI, and they have to disclose whether anything they give you is AI generated. They're also required to meet with us to discuss how they're using AI. So we've met individually with each company over the last year, and those meetings are sort of off the record, but they are candid and frank, and it gives a really good insight into what the companies are doing. So in this negotiation, we need to protect all those things we want in 2023. And fortunately, the companies weren't trying to make any rollbacks there.

7:03John August:But the Disney Sora deal showed that the companies do have plans for AI. They're going to try to monetize their IP for use in AI. And that's material we wrote. That's reuse. That's residuals. And that's a framework that we're actually really familiar with. We wanted to establish that reuse of our material to create AI outputs requires negotiation with the guild about terms and remuneration. The problem is that AI residuals are still amorphous and weird and kind of hypothetical. If you allow the metaphor here, I think it's like trying to build a cage to hold the Loch Ness monster. You don't know how big the cage needs to be.

7:45John August:You don't know if the monster even exists. So it's kind of hard to set the specifications. And so in this negotiation, all we were trying to get to is that if they're going to use our material to create AI outputs, they have to negotiate with us. That's it. And that's what we got. So of course, like the Disney store deal, it fell apart while we were in the room negotiating, like that thing isn't going to be around anymore, but something else will replace it. And so now we know that whatever does happen, we're going to be ready to get in there and negotiate. They are required to give us written notice whenever they license their IP to create AI outputs.

8:20John August:We then go in and meet with them. We see what their use is, if we can find terms for it. Realistically, I don't think there's going to be a significant going to have money in AI off of our work or the course of our contract, but it's going to give us transparency into what these deals actually look like. Some of them are going to be just purely promotional and not worth anything, but some of them could be really lucrative. And we need to know what these contracts look like to be ready for the next negotiation. Which will be in 2030, right? That's right. May 1st, 2030, which feels like the future.

8:50John August:2030 is just a weird, a weird, I don't know, just crossing over into that next decade. It's strange. It sounds weird to me. The companies came into this negotiation saying they wanted a five-year deal. We ended up at a four-year deal rather than our traditional three-year deal. And there are pros and cons to a longer deal. And I can argue both sides on that. But the reality is we took the four-year deal in order to get the hundreds of millions of dollars we needed for the health plan. That was the biggest point of leverage we had is that the companies really, really, really wanted a longer contract.

9:22John August:And we took every penny we could to get that. One thing I'm excited about is the page one rewrite. How does that work? All right. So you and I both know what a page one rewrite is. Every writer knows what a page one rewrite is. That's when they're essentially throwing out the existing script and you're coming in and writing a new script. We all know what that is, except business affairs claims they don't know what it is, that it's just a common rewrite. And so we needed to define and set terms for what a page one rewrite is. So this is the official definition. It is the making of revisions, modifications, or changes to an assigned screenplay when the writer is directed by the company to replace all or substantially all of the existing screenplay.

10:02John August:That's a pretty good definition. And what's helpful about that definition is we could set a new rate for it, which is between a common rewrite and a non-original first draft. So it's like around 80 % of full freight. So that's that scale. So most writers, most screenwriters are not working at scale. You're working above those scale minimum. but having a percentage there, having it sort of locked in as a concept means that even if your lawyers or your reps are negotiating for a page one rewrite at an overscale price, they have a basis for arguing for a higher rate for you. So it's giving me more money in a lot of screenwriters' pockets.

10:38John August:So that's a really helpful thing to have won in this contract. And we've tried for years to get this. And so it's great that we got it this time. We also built on some stuff we got in 2023. We were able to expand the number of writers who are covered by the guaranteed second step. So now if you're hired to write a first draft for up to 225 % of scale, you are guaranteed to also have a rewrite. And that helps lower earning writers in two ways. First, it's just more money in your pocket. And second, it helps push back against the free work that so many writers are asked to do in order to get to their optional steps on their contract.

11:13John August:When you only have one draft, you feel all this pressure to take every note because you know it may be your only shot. When you know there's a guaranteed rewrite, that gives you the space to say no, or at least say, hey, I get that note. I understand it. Let me do that in my next step, the actual rewrite that they're supposed to be paying you to do. Also on the topic of free work, we now have language in the MBA that makes it clear that only the studio executive who is named in your contract can request work or accept delivery. So while the word producers is not in there, that's really what this is about.

11:45John August:it. It's a way for the guild and for individual writers to push back against unpaid work solicited by producers that producers pass. It gives them a basis for actually going out to producers and saying, you got to quit this. You're not allowed to be doing this. That is great. What's changing in TV? So the biggest thing in TV is if-come deals. So an if-come deal is where the studio has you under contract to write a pilot, but only if you're able to set up the pilot on a network. and they're pretty common. But writers are often held hostage to if-come deals because they're unable to staff on another show because they're locked in first position on this hypothetical show.

12:24John August:So now writers on if-come deals are in no position until they are paid to start writing that draft. So rather than being held in first position, they're in no position. So they're free to get other work during that time. And for mid-level writers in particular, this is a big win because it gives them the flexibility to pursue their own projects while also being available for staffing. So that's a really necessary change. We also closed some loopholes in TV and narrowed other ones. There's a weird thing that happens in TV when it's based on existing IP that you can end up with an episode that has a credited teleplay, but no story credit.

12:58John August:And that's fixed now. So it means that potentially more residuals for the writer. In some cases, there was only one credited writer, but they're only getting like 60 % of the residuals they should have been getting because there was no credited story person. So now that one credited writer gets the whole residual amount, which is important. Also in 2023, we established that shows produced in the US and Canada have to have additional writers on set beyond just the showrunner. And this is crucial training for writers, but it's also just better for the show. It's ridiculous not to have writers on set.

13:33John August:So we got that in 2023, but there was this weird loophole where if the writer's room overlapped by even a day with production, you didn't have to send the writers to set, which is just dumb. And truly, honestly, it is just dumb that writers and production only applies to US and Canada. It should be worldwide because we're shooting our own shows all over the world. And there's just so much dumb stuff that's in the NBA because we cannot convince the studios to get rid of it. But on this, we at least made some progress. So now the overlap with production has to be at least three weeks. Otherwise, you get your writers on set and they get to go to set and be writers on set like they should be.

14:08A question I've gotten in the email is, so why are there people picketing? You know, is the WGA on strike? What's going on there?

14:16John August:Yeah, that is a fair question and an understandable confusion. So the Writers Guild is not on strike. The Writers Guild staff union, who are the people who work at the Writers Guild West, are on strike and they have been on strike for several weeks. They have their own NECOM who's negotiating their deal, which is completely separate from our deal. But the WGA Negotiating Committee has no involvement in those negotiations. They are two separate things happening. They have an overlap of names, but they're really very different things. So what are the next steps for the NBA? So this Saturday and next Wednesday, there are Zooms for WGA members.

14:49John August:And then voting opens up on April 16th and runs through April 24th. And the contract expires May 1st? That's right. So we'll be done with six days to spare. Next up after that is DGA and SAG-AFTRA. They'll be negotiating their contracts, and I hope they can get what they need for their members as well. How are you feeling? I'm feeling good. Exhausted, relieved, proud. This was a more normal negotiation in that it wasn't high drama at all moments. It's been a while since we've had that because 2023, of course, led to the strike. 2020 was in the middle of the pandemic. 2017 was probably the closest comparison because in that one, we needed a lot of money for our health plan.

15:31John August:In that negotiation, we got like$66 million. So$280 million is a lot of money. And we were able to do it without a strike authorization vote like we took in 2017. But I'm really clear-eyed about what we gained and what the impact will be from members. We stabilized the health plan, but we also had to kind of pull off the blinders for members that you really need to start thinking about your health insurance. It's always just sort of been their like gravity. And now you have to make choices each year about whether it be on Anthem or Centivo, about which surgeons to pick. And that's just the reality of healthcare in 2026 in America.

16:05John August:I feel confident that we got every last cent we could have out of this negotiation, which is great, but it's never everything you wanted or even close to what writers deserve. So we got what we needed. And that's, I guess, the most you can hope for in a negotiation. And I realize I'm saying we a lot. And that includes this incredible negotiating committee made of volunteer members from the East and West who gave up weeks of their lives to sit in weirdly bright rooms and go through the minutiae of all of these different proposals and counterproposals. Of course, we had our incredible executive staff.

16:39John August:They're the ones who crunch the numbers and understand the esoteric legal issues involved in all of this. It is a massive undertaking to do a negotiation. And we are so well served by the dedicated people working at the Guild and volunteering as members. And I think that's it, Drew. Another sidecast for the books. We remembered how to do this. We did it. But also you did it again, too. So congratulations. Thank you. Thank you. It was very much the experience I kind of expected and that it's difficult. And there's moments where you're just kind of fighting your way through it and figuring it out.

17:12John August:It does feel like writing and that you're making thousands of tiny little decisions with the end goal of creating this document that reflects your intentions and your ambitions. The difference is rather than a script, the document is the MBA, which is this completely undecipherable thing that no human being should ever read. But it is the fundamental protection for writers. It defines how we are going to be paid, how we are going to be compensated and treated. And every negotiation, you're just trying to make progress on that document. And I think we did. And we did what we could in this negotiation.

17:45John August:I feel really good about the outcome. I love it. Thanks, John. Thanks, Drew.