[ And now they don’t want to pay their employees.]
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THE BUSINESSMEN BROKE HOLLYWOOD  
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Xochitl Gonzalez
July 17, 2023
The Atlantic
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_ And now they don’t want to pay their employees. _

, David Butow / Redux

 

The Hollywood machine—from script writing, to shooting and
production, to late-night talk-show PR—has officially ground to a
halt.

On Thursday, the actors went on strike. The 160,000 members
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SAG-AFTRA, led by Fran Drescher, the fearless sitcom nanny, stopped
working after talks with the studios collapsed. They join the ranks of
the Writers Guild of America, whose members (myself included) have
been on strike since May.

Our two unions have not been on strike together since 1960. The
writers’ pickets at shooting locations had already shut down an
estimated 80 percent of productions. Now SAG’s strike rules dictate
that actors not only can’t shoot or do voice-over work for
productions; they also cannot attend red carpets or promote any Motion
Picture Association projects—something that was already a challenge,
given that the writers’ strike had shut down the nighttime talk
shows that were such a staple of the press circuit.

Much like the writers, actors are looking for increases in their
residual pay—compensation that’s akin to royalty
checks—once-reliable income that has all but vanished in the pivot
to streaming. Actors are also seeking protections against artificial
intelligence using their voice and image.

Bob Iger, Disney’s CEO, called these expectations “just not
realistic.” He accused the strikers of “adding to a set of
challenges that this business is already facing that is quite frankly
very disruptive and dangerous.”

This was a bit rich, coming days after a studio executive
told _Deadline_
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their strategy was “to allow things to drag on until union members
start losing their apartments and losing their houses.”

Eviction is a pretty cruel labor-negotiation strategy.

Hollywood’s CEOs _are _suffering. Not primarily from labor
disputes or industry disruption or public-relations issues, but from
vincible ignorance, which seems to be endemic in C-suites of all
industries. Under pressure to deliver to Wall Street, too many CEOs
have lost the plot of their own movie. They are not running companies
to profitably deliver a good product, such as a book or a cup of
coffee or, in this case, a movie or TV show. They are running
companies to deliver good profit. The quality of their product has
ceased to matter.

If you doubt this, consider that when Emmy nominations were announced
last week, the lions’ share went to HBO Max, a prestige platform
that has ceased to exist by that name
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because Warner Bros. Discovery took the streaming arm of the legacy
brand and folded it into a messy app crowded with low-budget reality
programs. We are in the upside-down.

Writers and actors have been caught up in the pivot to streaming, the
mad logic of which has upended long-standing working practices
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slowly begun to replace human instinct with artificial intelligence
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and obliterated workers’ income streams.

The actor Mark Proksch, for example, made more money off residuals
from one season of guest appearances on _The Office_,_ _under the
old system, than he has in five seasons of starring in _What We Do in
the Shadows_, under the new system_._

Now, just as Hollywood workers are arguing that we need to adjust our
compensation models to fit the streaming era, the studios are telling
us that we cannot be fairly paid, because the streaming model is
broken. And we’re being told this by the very studio
executives—many of them multimillionaires
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broke it.

This is another aspect of C-suite ignorance: Bonkers executive
compensation has utterly detached leaders from the lives of the people
they employ. The fact that David Zaslav, the CEO of Warner Bros. and
Discovery, earned $247 million in 2021 makes it very hard to swallow
his refusal to budge on issues that are costing middle-class actors
thousands of dollars a year in lost income.

You can argue all you like about whether anyone should ever earn this
much, but these are leaders who have made some disastrous business
decisions.

The pivot to streaming was extremely profitable for the brief moment
when everyone was trapped at home during a pandemic. People couldn’t
spend money on concerts or eating out or traveling, so they felt
comfortable spending an abnormal amount on streaming services.

Hollywood CEOs saw the success of Netflix and raced to copy a model
without knowing whether it was sustainable, a model that relied on the
constant production of new (and costly) entertainment content created
by unionized talent. They were wrong about the business, but they were
even more wrong to presume that labor would comply. The actors and
writers didn’t make this pivot; why should they pay the price?

If the pivot to streaming was such a mistake that these businesses
truly are going under—a case that’s hard to make, given the size
of these executives’ compensation packages—we will have to suffer
too. But if we suffer during lean times, we should also share in the
profits during fat ones. That is what the negotiations are about. The
only way that executives will be able to right this ship is to return
to making unmissable programming, and they won’t be able to do that
without us.

Absent good script writers, Hollywood executives have taken their
lines from Marie Antoinette. But the revolutionaries are already
outside, dismantling the palace. In London, the cast
of _Oppenheimer_ walked out
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the film’s premiere. Press tours for _Barbie_ have been halted;
even the stars’ pink-laden social-media accounts have gone dark. The
Emmys will likely be postponed
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Comic-Con will be sans actors or writers. I am desperately hopeful
that the studios will realize sooner rather than later that even if it
hurts shareholders for a time, good entertainment, long-term, is
always good business.

_Xochitl Gonzalez
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writer at The Atlantic. She is the author of the novel Olga Dies
Dreaming and was a finalist for the 2023 Pulitzer Prize for
Commentary._

* actors
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* strike
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* Hollywood studios
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* selfish profit
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