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Speaker 1: Welcome to Daily Variety, your daily dose of news and

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Speaker 1: analysis for entertainment industry insiders. It's Thursday, March twelfth, twenty

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Speaker 1: twenty six. I'm your host, Cynthia Littleton. I am co

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Speaker 1: editor in chief of Variety alongside Ramin Setuda. I'm in

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Speaker 1: la He's in New York, and Variety has reporters around

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Speaker 1: the world covering the business of entertainment. In today's episode,

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Speaker 1: we'll hear from Variety's Gene Mattis on the latest in

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Speaker 1: Hollywood's union contract negotiations process. SAG after has been in

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Speaker 1: the room with the Alliance of Motion Picture and Television

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Speaker 1: Producers for a few weeks. The Writer's Guild of America

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Speaker 1: is up next, starting on Monday. Gene will bring us

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Speaker 1: up to speed on the buzz and the vibes coming

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Speaker 1: out of the negotiating room in Sherman Oaks. But before

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Speaker 1: we get to that, here are a few headlines just

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Speaker 1: in this morning that you need to know. Stewie Takes

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Speaker 1: the Spotlight, a Family Guy spin off featuring the show's

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Speaker 1: foul mouth baby, has been given a two season order

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Speaker 1: by Fox. Disney's twentieth Television Animation is producing it's targeted

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Speaker 1: to premiere next season. Universal Pictures has made a big

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Speaker 1: u turn in strategy. The studio has committed to keep

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Speaker 1: its theatrical releases in theaters for a minimum of five

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Speaker 1: weekends for the rest of this year. By twenty twenty seven,

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Speaker 1: it'll be up to seven weekends. This is an about

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Speaker 1: face for the studio that trimmed its window to seventeen

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Speaker 1: days just a few years ago. It's a clear sign

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Speaker 1: of the industry rallying to shore up the moviegoing experience.

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Speaker 1: Sony Pictures Television has consolidated all production under President Catherine Pope.

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Speaker 1: Eli Holtzman and Aaron Seidman have exited their post as

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Speaker 1: head of unscripted for the studio. All of that activity

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Speaker 1: will now fall under Pope's supervision. All of these stories

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Speaker 1: and so much more can be found on Variety dot

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Speaker 1: com right now and now it's time for conversations with

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Speaker 1: Variety journalists about news and trends and show business. Gene

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Speaker 1: mattis Variety's main man on the labor beat, brings us

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Speaker 1: up to speed on where the talks stand sag After

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Speaker 1: is about to wrap up a few weeks of negotiations

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Speaker 1: with the AMPTP. The Writers Guild is up next on Monday,

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Speaker 1: and the DGA is scheduled to start on May eleventh.

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Speaker 1: The big question right now is will SAG after have

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Speaker 1: a deal by the end of this week or will

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Speaker 1: they pause their talks while the amptp engauges with the WGA.

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Speaker 1: Gene Mattis, thanks for taking a minute to talk to me.

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Speaker 1: You have been very busy keeping your eye on the

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Speaker 1: contract negotiation situation for not one, not two, but three

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Speaker 1: major unions.

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Speaker 2: Well four if you count the Writer's Guild Staff Union.

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Speaker 3: Yes, you are correct that the Hollywood labor situation is

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Speaker 3: getting kind of meta right now. Earlier this week, you

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Speaker 3: had a long conversation with the key players at the

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Speaker 3: Writers Guild of America, Michelle mulrooney, the president, Ellen Stutzman,

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Speaker 3: the executive director, and John August and Daniel Sanchez Witzel,

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Speaker 3: who are leading the negotiating team for the Writers Guild

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Speaker 3: of America. They have yet to sit down with the

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Speaker 3: companies the Alliance of Motion Picture and Television Producers, but

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Speaker 3: that day is coming, and you had an on the

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Speaker 3: record conversation with them to get a sense of their priorities,

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Speaker 3: their concerns. What did you learn gene.

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Speaker 2: The major thing with something we already knew, which is

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Speaker 2: that healthcare is going to be the dominant subject of conversation.

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Speaker 2: And really the question is, obviously the studios are going

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Speaker 2: to contribute more towards healthcare. The question is what are

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Speaker 2: writers called premiums in terms of out of pocket maximums,

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Speaker 2: that kind of thing, and so how much of cost

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Speaker 2: saving is going to balance out the increase in contributions

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Speaker 2: that the studios are going to make. So we didn't

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Speaker 2: get a ton of new information about that. They did

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Speaker 2: talk about their proposals in a couple of other areas

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Speaker 2: on AI and on the free work issue, but those

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Speaker 2: I feel like are going to be subordinate to the

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Speaker 2: major theme, which is healthcare.

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Speaker 3: You really pressed them on some issues about the healthcare

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Speaker 3: plan is in kind of similar situation to where it

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Speaker 3: was in twenty seventeen, very much underwater, although the whole

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Speaker 3: is deeper this time around. But I did see the

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Speaker 3: reporting that you put in to looking at what happened

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Speaker 3: then and what is likely to happen this time around.

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Speaker 3: In talking to the WJA leadership about the health plan situation,

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Speaker 3: did you get the sense that they had looked back

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Speaker 3: at twenty seventeen to try to figure out, like, what

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Speaker 3: went wrong? How did this get so deep in the hole.

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Speaker 3: In terms of remind us, what is the number that

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Speaker 3: that plan is in the red.

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Speaker 2: It was one hundred and twenty two million dollars over

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Speaker 2: twenty twenty three and twenty twenty four and more since then.

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Speaker 2: So yeah, it's quite bad.

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Speaker 3: Of course, the healthcare everywhere is a consistent problem across

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Speaker 3: the country. Short of asking the studios to write a check,

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Speaker 3: did you get any sense of any kind of creative

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Speaker 3: proposal so that they don't consistently face these kind of shortfalls.

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Speaker 2: They made the point that that has been a traditional

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Speaker 2: way of patching this up. Instead of getting a three

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Speaker 2: percent raise, you might get a two percent raise and

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Speaker 2: that other one percent goes into the health fund. Like

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Speaker 2: that's a very standard union way to handle this kind

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Speaker 2: of issue. It's just that the numbers are so big

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Speaker 2: this time around that it's sort of hard to just

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Speaker 2: resolve it with some little fiddling here and there. So

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Speaker 2: the big difference obviously between now and twenty seventeen is

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Speaker 2: twenty seventeen, we were talking about an expanding industry. So

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Speaker 2: it's a problem that the health fund is losing money

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Speaker 2: even while the business is going relatively well. But now

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Speaker 2: we have a contracting industry, and so what you have

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Speaker 2: is a bunch of writers got hired in twenty eighteen,

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Speaker 2: twenty nineteen, twenty twenty, twenty twenty two, and now all

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Speaker 2: of those writers are not working, but they are on

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Speaker 2: the health plant still, many of them. So they are

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Speaker 2: contributing to the cost but not contributing to the revenue,

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Speaker 2: if that makes sense. And so that is the major

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Speaker 2: structural problem that they're facing right now, and that is

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Speaker 2: why the numbers are so large, and there there could

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Speaker 2: be some talk I specifically asked about this issue of

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Speaker 2: extended coverage points where you can crew over a career

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Speaker 2: a large number of these points for years that you've

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Speaker 2: worked and years that you've met certain earnings thresholds, and

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Speaker 2: then you pay it down in the years when you

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Speaker 2: don't have those earnings. And that's meant to keep people

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Speaker 2: going in a freelance business where it's feast or famine sometimes.

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Speaker 3: Kind of a safety net that makes sense.

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Speaker 2: But in a time when basically the whole industry is

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Speaker 2: upside down, a lot of people are using their points

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Speaker 2: to get health coverage but not doing work that contributes

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Speaker 2: money into the Health Fund, so they might want to

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Speaker 2: look at reforming that at some point. Now, what's going

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Speaker 2: to happen. What the answer was when I asked about

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Speaker 2: that is we're going to see how much the companies

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Speaker 2: want to give us, and then we'll know how much

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Speaker 2: we have to make up in terms of cost reductions.

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Speaker 2: So that's what we're going to end up with at

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Speaker 2: the end of this negotiation is probably the largest number

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Speaker 2: that's ever been given to the Health Fund, but then

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Speaker 2: also another number that we'll find out later of cost reductions,

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Speaker 2: and then I'll be up to the trustees of that

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Speaker 2: fund to specifically figure out what the modifications are to

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Speaker 2: the plan that are required to hit that number.

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Speaker 3: The devil will be in the details. And we know

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Speaker 3: that the industry, the creative unions are known for having

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Speaker 3: Cadillac plans, and that in this environment is going to

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Speaker 3: be where they're very sensitive to making even small changes.

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Speaker 3: At the numbers that you're talking about, one hundred and

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Speaker 3: twenty million over two years, that is utterly not sustainable.

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Speaker 3: It reminds me of what DJA National Executive Director Russ

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Speaker 3: Hollander told me when I sat with him a couple

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Speaker 3: of weeks ago, the number one issue is jobs, jobs, jobs.

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Speaker 3: All of this is the related fallout of the fact

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Speaker 3: that a great percentage of union members are not working

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Speaker 3: after coming off of an environment when they had more

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Speaker 3: work than they could accept in many years. So it's

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Speaker 3: a real seesaw dynamic. I want to follow up with

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Speaker 3: you on the issue of free work because in your

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Speaker 3: story you mentioned what a victory it was in twenty

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Speaker 3: twenty three for the Writer's Guild to get it's called

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Speaker 3: the second Step for feature film writers, which has been

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Speaker 3: a long, long standing, decades old complaint that studios would

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Speaker 3: get free rewrites and polishes out of writers if they

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Speaker 3: really wanted to see their script advance. And in your

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Speaker 3: conversation they mentioned that this has started to creep into television.

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Speaker 3: I found that interesting. How do you think they're going

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Speaker 3: to address that at the table?

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Speaker 2: Well, the one specific thing they mentioned was the idea

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Speaker 2: that basically the producer and a feature is they want

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Speaker 2: to designate that person as the studios representative. And that's

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Speaker 2: I mean, we're getting a little into the weeds here,

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Speaker 2: but basically what that means is if you hand your

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Speaker 2: script into your producer, then it is considered delivered and submitted,

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Speaker 2: and you are owed your payment for the first draft

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Speaker 2: or whatever draft you're on. And typically what happens in

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Speaker 2: real life without that provision is that it sort of

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Speaker 2: goes back and forth between the producer. How maybe you

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Speaker 2: could fix this, Maybe you can fix that. Yeah, you're right,

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Speaker 2: maybe I should fix that. And there's a lot of

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Speaker 2: extra work that goes on after the producer receives the script,

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Speaker 2: and that is not paid as though it's another step.

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Speaker 2: And so if you designate the producer as basically an

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Speaker 2: agent of the studio, then any subsequent work after that

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Speaker 2: would have to be paid. I don't know if the

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Speaker 2: studios are going to go for that. I mean, obviously,

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Speaker 2: as we discussed, this is something that's been an issue

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Speaker 2: for decades. It's been arbitrated, and the real thorny thing

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Speaker 2: is there's not a unified consensus among writers about how

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Speaker 2: to deal with this issue. So some writers are like,

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Speaker 2: if the producer wants me to do a little extra

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Speaker 2: work and it makes the script better, then it's in

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Speaker 2: my interest to make the script better. Or if it

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Speaker 2: makes it more likely it's going to get actually made,

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Speaker 2: why wouldn't I do that? And they're happy to do it,

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Speaker 2: and other writers are like, I'm not doing anything unless

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Speaker 2: you pay me, and so getting all writers to take

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Speaker 2: a firm, unified line on that has always been the challenge. So, yes,

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Speaker 2: they did get an incremental gain last time with the

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Speaker 2: guaranteed second step. It only applies in certain circumstances under

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Speaker 2: a certain income threshold. I thin it's two hundred percent

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Speaker 2: of the minimum. So I think they'd like to expand

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Speaker 2: the applicability of that guaranteed second step that that is

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Speaker 2: attended to remedy what they call a one step deal

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Speaker 2: that has been very common since probably the late nineties

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Speaker 2: that came in, and writers just hate that because basically,

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Speaker 2: you get one shot on the script and that's it,

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Speaker 2: and they would like to be involved in an iterative way,

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Speaker 2: and they would also like to be paid for the

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Speaker 2: subsequent iterations. So that's what we're talking about. And then

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Speaker 2: it's become an issue in TV because TV has taken

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Speaker 2: on some of the development timeline of film, certainly in

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Speaker 2: the prestige realm, and so it's taking longer and longer

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Speaker 2: to get to a green light, and people end up

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Speaker 2: writing and rewriting and rewriting and rewriting and not getting

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Speaker 2: paid for the rewriting.

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Speaker 3: Another unintended consequence of the massive change in the way

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Speaker 3: television is produced. Well, you spoke with the Writers Guild

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Speaker 3: just as they're gearing up for their sit down. Meanwhile, well,

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Speaker 3: the AMPTP has been now in for a couple of weeks,

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Speaker 3: has been talking to SAG after and I suspect that

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Speaker 3: this is a case of the lack of fireworks, the

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Speaker 3: lack of buzz about some issue coming out of the

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Speaker 3: negotiating room, even though there is a media blackout in

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Speaker 3: both sides. We all know that doesn't stop tongues from

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Speaker 3: wagging privately. But it's been relatively quiet. Of course, there's

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Speaker 3: been a lot of other things going on in the industry,

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Speaker 3: but it's been relatively quiet coming out of Sherman Oaks,

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Speaker 3: where the AMPTP has their headquarters and their purpose built

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Speaker 3: negotiating room. What is your basic sense of what's going

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Speaker 3: on with SAG right now.

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Speaker 2: Well, basically, they're going to keep talking I think until Friday,

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Speaker 2: and then they either have to have a deal or

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Speaker 2: they're going to have to stop talking until June because

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Speaker 2: the writers come in on Monday. So it's anybody's guess

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Speaker 2: obviously whether they get a deal or not, and maybe

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Speaker 2: they don't know, But the sense I got was that

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Speaker 2: things are being handled professionally, but not quickly. So obviously

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Speaker 2: they've taken a few extra days already, so it may

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Speaker 2: very well kick into June. There would be a little

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Speaker 2: more leverage probably for the actors at that point anyway,

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Speaker 2: so it might be in their interest too, That might

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Speaker 2: be in the writer's interests also for SAG to kick

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Speaker 2: into June, and that sort of keeps some of the

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Speaker 2: pressure more on the MPTP. Oh. Yeah, I would not

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Speaker 2: at all be surprised if they come out on Friday

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Speaker 2: and say, well, we've made some progress, but we're not

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Speaker 2: there yet, and we'll come back when you're done with

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Speaker 2: the writers in the director.

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Speaker 3: We know that AI is a big issue for all

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Speaker 3: three unions for obvious reasons. It's really really acute for actors,

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Speaker 3: and the discussion of synthetic performers has not slowed down,

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Speaker 3: and of course the headlines out of the big AI

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Speaker 3: companies have not slowed down, so once again that is

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Speaker 3: a big existential issue hanging over these negotiations. Have you

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Speaker 3: heard anything about AI being a flashpoint in these discussions.

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Speaker 2: Yeah, I think definitely. For SAG it's probably their number

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Speaker 2: one thing. Obviously, the strikes in twenty twenty three were

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Speaker 2: all about AI on some level, and they were pretty

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Speaker 2: good in the sense of the deals that resulted from

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Speaker 2: that kind of laid down the rules of the road

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Speaker 2: in terms of if we're going to incorporate AI, like,

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Speaker 2: how will we do it? If AI is a tool,

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Speaker 2: what does that look like, what are the rules for

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Speaker 2: using that? And how do we make sure it doesn't

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Speaker 2: undercut writers? How do we make sure it doesn't undercut actors?

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Speaker 2: But actors can still license their voices if they want

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Speaker 2: to license their images if they want to, and you

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Speaker 2: can make an AI version of James Earl Jones if

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Speaker 2: you want to, and you pay as a state. Basically,

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Speaker 2: so all of those rules were kind of laid down.

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Speaker 2: But what's unfinished about it is, well, what if I

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Speaker 2: just take your performance and feed it into a soup

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Speaker 2: of fifty thousand other performances and then create a unique

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Speaker 2: performance out on the other end of that that doesn't

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Speaker 2: look like anything that you guys created, And that's an

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Speaker 2: issue for the writers, it's an issue for the actors,

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Speaker 2: and basically the studios did not agree to any restrictions

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Speaker 2: on any of that. So I think from the writer's standpoint,

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Speaker 2: from the actor's standpoint, that's still the big unfinished business

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Speaker 2: from twenty twenty three is like, how do we claim

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Speaker 2: some control over our performances, our scripts being used to

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Speaker 2: train AI and so far they don't have any control

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Speaker 2: over that, and I think they would like to assert

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Speaker 2: some control over that. So that is sort of the

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Speaker 2: primary thing for SAG and one of the key things

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Speaker 2: for the WJA gene.

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Speaker 3: Thank you for monitoring it, thank you for doing the

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Speaker 3: reporting and knowing all the wonky arcane things to ask.

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Speaker 3: To keep everybody on their toes as we close out

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Speaker 3: today's episode, here's a few things we're watching for. You

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Speaker 3: might have heard, but the oscars are happening on Sunday.

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Speaker 3: All you need to know can be found at Variety

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Speaker 3: dot com. Read my colleague Clayton Davis's predictions, and peruse

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Speaker 3: are voluminous coverage of the movies and the players in

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Speaker 3: this year's race. It all comes to a head on

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Speaker 3: Sunday at five pm Pacific on ABC, and keep your

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Speaker 3: eye on Variety dot com for all the headlines you need.

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Speaker 3: The South by Southwest Festival begins today in Austin, Texas.

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Speaker 3: Variety has a big slate of events happening there starting

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Speaker 3: Friday with our True Crime Summit. Nancy Grace will kick

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Speaker 3: it off in a conversation with our publisher, Dale Lawrence,

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Speaker 3: who is an enormous true crime buff. If you're not

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Speaker 3: in Austin, head to Variety dot com for all of

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Speaker 3: our coverage. We love to hear from our listeners, so

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Speaker 3: please send thoughts, scripes, and other feedback about Daily Variety

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Speaker 3: to podcasts at Variety dot com before we go. Enormous

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Speaker 3: congratulations to Kevin Broderick and Christine so. Kevin is managing

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Speaker 3: director of the Lippin Group. Christine is principal analyst at Paramount,

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Speaker 3: and they both also answer to Mom and Dad. The

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Speaker 3: two welcome their second child, baby boy, Callum Owen Broaderick,

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Speaker 3: on March fifth. What a blessing. Thanks for listening. This

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Speaker 3: episode was written and reported by me Cynthia Littleton, with

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Speaker 3: contributions from Gene Modis stick Snick's hick Picks.

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Speaker 1: Please leave us a review at the podcast platform of

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Speaker 1: your choice, and please tune in Monday for another episode

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Speaker 1: of Daily Variety eight