The Burbank studio alerted several top showrunners late Wednesday that it was halting payments to producers for their staff salaries, office space and other compensation, due to the bitter Writers Guild of America work stoppage that began May 2, said numerous people familiar with the matter but not authorized to comment.
Warner Bros. and its sister HBO unit put dozens of other agreements with writer-producers on hiatus earlier this year.
But this week’s action was noteworthy because it hit some of the biggest names in television. Their deals were not canceled entirely; instead, payments will now stop for the duration of the strike, the knowledgeable people said.
Other major studios, including Universal Pictures, Paramount and Disney Entertainment, are expected to quickly follow suit. Major film producers could also see their deals affected, executives at two studios said.
For the media companies, suspending deals brings additional cost-savings as their once-bustling film lots have become ghost towns.
Netflix’s big spending on talent put pressure on Hollywood’s other studios to offer generous deals to attract and retain their top producers and keep their content pipelines humming. But some of those deals are coming under more scrutiny as studios look to cut costs.
Studios have the ability to cancel producer deals outright, a provision in contracts known as “force majeure,” meaning that a massive disruption, such as a strike, could be grounds for a contract termination.
The suspensions, first reported by Deadline, could carry a side benefit by spurring movement in the stalled talks between the WGA and the Alliance of Motion Picture and Television Producers. The performers’ guild, SAG-AFTRA, followed the writers in mid-July after a collapse in its talks with AMPTP, which includes Warner Bros. Discovery, Netflix and the Walt Disney Co.
Previously, studio executives hadn’t wanted want to create additional headaches by alienating some of their most lucrative producers. So the producers continued to receive compensation from studios as they worked on various TV projects, some of which were in post-production.
Now, the producers must find other ways to pay their staff, or furlough them. The move widens the financial pain being felt across the entertainment industry and the businesses that support it.
“We’re not going to continue to pay people who are not working,” said one executive not authorized to comment on the matter.
Having their deals cut off could be a catalyst to motivate some producers to become more involved in negotiations between the WGA and the media companies. Studio executives have become increasingly frustrated by the lack of progress in talks and have been aggressively looking for ways to build momentum to resolve the strikes before their businesses sustain lasting damage.
In an effort to build support for a deal, the AMPTP last month released details of its Aug. 11 offer. But the move triggered outrage among striking writers, who condemned the move as an end-run around the WGA negotiating committee.
WGA member David Slack, in a message Thursday on the platform X, formerly known as Twitter, suggested the suspensions could be part of a negotiating ploy.
“Studio CEOs should be talking about their response to out 8/15 counter, but instead, they’re suspending big overalls. Why? Simple.1. They need the money. 2. They’re hoping to trick a group of high-level writers into publicly criticizing the Guild,” wrote Slack, a former WGA board member who’s written on such prominent shows as “Person of Interest” and “Law & Order.”
For months, top media executives have expressed exasperation over what they describe as the WGA’s unwillingness to bend on major issues, including the size of writers’ rooms and additional compensation for successful streaming shows.
Privately, the executives have said some showrunners were also frustrated by the stalemate because their projects were in limbo. Guild officials have strongly disputed the claim of any division in the ranks and accused their counterparts of offering half measures.
(Al Seib / Los Angeles Times)
On the picket lines, there has been strong solidarity with the WGA leadership.
“There is no schism,” Matthew Weiner, “Mad Men’s” creator, said on a picket line outside Netflix late last month. “That’s all made-up information coming from the AMPTP.”
Three sources close to the companies who were not authorized to speak publicly said some showrunners have sat on the sidelines because they didn’t want to be ostracized for being out of step with the guild’s leadership at a time when there was support nationwide for increased union activism.
A Warner Bros. spokeswoman declined to comment.
Like other studios, Warner Bros. is grappling with the economic fallout of the strikes.
Earlier in the week, Warner Bros. Discovery disclosed to the Securities and Exchange Commission that its profits for the year could be $300 million to $500 million less than previously forecast because of the work stoppages. The company previously estimated the strikes would be resolved by Labor Day but now many hope that the disputes will be resolved by early October.
“If we can get a result soon, then the longer-term impacts will be minimized, but there are real industry challenges here,” Warner Bros. Discovery Chief Executive David Zaslav said Wednesday during a Goldman Sachs Communacopia + Technology Conference in San Francisco.
Warner Bros studio, in a file photo, is typically a bustling hub.
(Dania Maxwell / Los Angeles Times)
One of Warner Bros.’ most prolific producers, Berlanti, had his deal suspended this week, according to the knowledgeable sources.
The creative force who guided Max’s “The Flight Attendant, Netflix’s “You” and DC Comics-based TV hits, including “Arrow,” “Superman & Lois,” had negotiated a new four-year deal earlier this year — before the strikes — with Warner Bros., his longtime home.
Abrams, who runs the Bad Robot production company with his wife, Katie McGrath, also saw their mega-deal suspended. The powerhouse writer-director-producer, best known for directing movies such as “Star Wars: The Force Awakens” and creating shows including “Lost,” signed one of the richest deals of the industry with Warner Bros. in 2019, when the company was owned by AT&T.
Kaling, former star of “The Office” and “The Mindy Project,” had been working on her latest creations, the animated show “Velma” for Warner Bros. Discovery’s streaming service Max and “The Sex Lives of College Girls,” which was shut down by the strikes earlier this summer
Bill Lawrence, one of the creators of Apple TV+ hit comedies “Ted Lasso” and “Shrinking,” also had his deal suspended.
They were not the first of the big-name showrunners to have their deals temporarily canceled. Chuck Lorre, the creator of “The Big Bang Theory,” “Young Sheldon” and “Two and a Half Men,” had his deal suspended in May to adhere to WGA stop-work guidelines.
Producer, writer and director John Wells, the force behind “ER,” saw his overall deal with Warner Bros. paused in June, according to the knowledgeable people.
Staff writer Wendy Lee contributed to this report.