new contract

Last year, studios and Hollywood labor unions lobbied hard to ensure animated movies and shows could compete for California’s expanded film and television tax credit program.

The payoff came last week, when three animated movies were among the nearly 40 film projects that received a production incentive in the latest round of awards, the California Film Commission announced Thursday.

Walt Disney Co.-owned 20th Century Studios received $21.9 million for “The Simpsons Movie 2,” Disney Entertainment Television got $3.5 million for “Phineas and Ferb” and DreamWorks Animation was awarded $24.7 million in credit allocation for a yet-untitled animated film.

The three are the first animated feature films to receive tax credits from the state of California. (Last month, two animated shows — a spin-off of “Rick and Morty” and “Stewie,” which branches off from the “Family Guy” cartoon — also received tax credits.)

I spoke with DreamWorks Animation Chief Operating Officer Randy Lake about the award, which he called a “potential game changer” for the Glendale-based studio known for the “Shrek” and “Kung Fu Panda” franchises.

“Unlike live-action, our projects are years long,” he said. “You’re talking about not just a job for six or nine months on set. It’s literally three or four years that these projects can take. It’s long-term employment.”

Like most of Hollywood, the animation industry has suffered from the effects of the 2023 dual writers’ and actors’ strikes, as well as the retrenchment in studio spending after the initial rush to invest in content for streaming services.

And like much of U.S. film and TV work — particularly in California — the animation business has been deeply affected by the increasingly rich tax credits offered by other countries.

Over the last 15 years, countries including Canada and Ireland have slowly built up animation hubs, aided by their local talent and lucrative production incentives specific to animation and visual effects.

For instance, visual effects and computer animation unit Sony Pictures Imageworks, which Lake ran for years, relocated its Culver City headquarters to Vancouver more than a decade ago.

DreamWorks, too, has outsourced work to partner studios, particularly in Vancouver and Montreal, as costs in the U.S. have increased and studios face pressure to rein in their production expenses while theatrical box-office revenue has become less reliable.

Just three years ago, DreamWorks cut about 70 jobs across its corporate functions, feature films, TV and technology departments. In 2024, Disney-owned computer animation studio Pixar laid off about 175 employees as it pulled back on its production of streaming series.

But with the recent tax credit allocation, DreamWorks will hire about 100 people in California for its upcoming untitled film. Those jobs would probably would have been outsourced to a third-party studio, Lake said. Keeping all of the jobs on that film in California helps improve collaboration among the teams and foster more creativity, he said. Today, DreamWorks has about 1,000 employees.

To understand why the new incentives are meaningful, consider that a DreamWorks Animation movie similar to the one that received the credit will typically have a crew of about 400 to 500 people.

That film is a big feature, though Lake declined to share details since the project hasn’t been announced.

Both the Animation Guild and studios have pointed to the incentive as a way to bring back animation jobs to the Golden State.

“Studios have been chasing animation tax credits in other states and countries for years, so it’s incredibly rewarding to see them use California’s for the very first time,” Marissa Bernstel, a trustee on the union’s executive board and member of the task force that helped lobby for the expanded production incentives, said in a statement last week. “The results feel very real, and I’m excited to see what future employment opportunities the incentive inspires.”

Lake said DreamWorks hopes to take advantage of the state incentives for all of its full-budget films.

“We’ll be applying for the next window,” he said, adding that he hoped they will be successful so “we’ll be able to have more and more of our films be fully produced in state. That’s the goal.”

Stuff We Wrote

Film shoots

Number of the week

Lionsgate’s “Michael” had a massive opening weekend with just over $217 million in global box-office revenue. In the U.S. and Canada, the Michael Jackson biopic hauled in about $97 million, far surpassing studio expectations.

The film, which stars Jackson’s nephew, Jaafar Jackson, as the late singer, chronicles the pop star’s rise from his early days in the Jackson 5 through the growth of his solo career. The movie ends in 1988 while Jackson is on tour for his hit album “Bad.”

The premiere for “Michael” marks the biggest domestic opening for any biopic, musical or otherwise. The 2015 movie “Straight Outta Compton” previously held the record for highest opening weekend total for a musical biopic, with $60 million in the U.S. and Canada, followed by the Queen biopic “Bohemian Rhapsody” in 2018, which had a $51.1-million domestic opening.

Critics’ reviews of “Michael,” however, were largely negative. Many noted the plot sidesteps the child sexual abuse allegations against Jackson and said the film presents a more one-dimensional view of the singer.

An earlier cut of the film did end in 1993 and addressed the allegations, but that ending had to be scrapped due to a clause in a legal settlement with an accuser that stipulated he could never be pictured or mentioned in a dramatization of Jackson’s life. Jackson and his estate have denied that the pop star abused children.

What I’m watching

I finally finished the Hulu series “Paradise” this last week, which kept me guessing about literally everything all the way until the end. I’m interested in seeing where this genre-morphing show goes next season.

Members of the Writers Guild of America have officially ratified their newest contract with the Alliance of Motion Picture and Television Producers.

More than 90% of the 11,000 voting members in both WGA East and West registered their support of the new agreement. The voting period closed Friday at noon, after the union first struck a tentative deal earlier this month.

The new contract includes a robust healthcare plan in which studios pay over $320 million to sustain the health fund, higher residual rates — including a provision for a “success bonus” for the most popular streaming shows from 50% of the base residual to 75% — and language on the licensing of work for AI training.

“The first reaction [from members] was relief that we were not going to be going into a period of labor strife or strike authorization vote, in the midst of this contraction,” said John August, the co-chair of WGA’s negotiating committee, referring to the ongoing challenges in the industry. “Members want to work, and they want to get back to doing their job.”

Negotiations between the union and film and TV studios began in March, as the union’s current contract expires May 1. August said that, at the beginning of the negotiations, expanding the healthcare plan was a top priority. The union was able to secure increases that would raise the cap that companies pay to as high as $400,000 by 2028.

Union officials say the current cap has remained unchanged for two decades as healthcare contributions have steadily declined because there are fewer working writers.

But under the new contract, members would, for the first time, have to start contributing to their healthcare costs to the tune of $75 per month. The earnings threshold to get coverage would increase by about $7,000 to $53,773, leaving many members concerned about the higher cost.

“This is all difficult. Healthcare in America is not a good situation. But we were really mindful, as we always are, of trying to make sure the career of writing is sustainable,” negotiating committee co-chair Danielle Sanchez-Witzel said.

Additionally, the contract terms have been extended from the WGA’s usual three years to four — though it is not the first time the guild has added more time to its deal with the studios. Sanchez-Witzel clarified that the four-year period for the new contract ”is, by no means, a standard. This is just what we needed this year and what we agreed to for this cycle.”

“We were here in 2026 trying to get some things that we didn’t get earlier [in previous negotiation cycles] and happy for the progress we made,” she said.

The WGA is the first of the Hollywood unions to strike a deal with the studios. AMPTP congratulated the WGA on the ratification in a statement released shortly after the vote totals were announced.

“This deal reflects a collaborative approach that supports both writers and the industry’s long-term stability,” AMPTP said.

SAG-AFTRA and the Directors Guild of America still need to negotiate new contracts.

The actors’ union began its negotiations in February and extended those talks in March, but paused to allow AMPTP to finish its deal with the writers’ union. SAG-AFTRA’s and the DGA’s contracts expire June 30.

Amid the bustle and glitz of last week’s CinemaCon in Las Vegas, one question loomed over the annual trade convention — how will the proposed Paramount Skydance-Warner Bros. Discovery deal affect the movie theater business?

That anxiety showed up in a state of the industry speech from Cinema United trade group President Michael O’Leary, who reiterated his organization’s opposition to further industry consolidation.

It showed up in a trailer for Amazon MGM Studios’ upcoming film “Spaceballs: The New One,” when a voiceover poked fun at Hollywood studios “merging willy-nilly” as images of the Paramount sign and Warner Bros. water tower flashed across the screen.

And the subject again took center stage — literally — when Paramount Chief Executive David Ellison himself gave a speech during his studio’s presentation at Caesars Palace. He sought to reassure the assembled movie theater operators and exhibition executives that the combined company would indeed release a minimum of 30 films a year.

“I wanted to look every single one of you in the eye and give you my word,” he said during an onstage speech, in which he also committed to a 45-day theatrical window and 90-day period before films go to streaming services. “People can speculate all they want, but I am standing here today telling you personally that you can count on our complete commitment. And we’ll show you we mean it.”

It’s true that Paramount has nearly doubled its theatrical releases since Ellison took over. As he noted in his speech, the storied studio is now planning 15 films this year, up from eight in 2025.

But as I’ve written previously, theater owners and other studio executives question how releasing 30 movies a year across the combined Paramount-Warner Bros. would work — not only in terms of giving each film the proper marketing campaign to succeed in theaters but also because of the massive cost cuts that will inevitably occur once the merger is final.

Still, Ellison’s commitment to 30 films a year got a round of enthusiastic applause — and at least one high-profile boost.

A day earlier, AMC Entertainment Holdings Inc. Chief Executive Adam Aron told me in an interview that he backed Ellison’s takeover of Warner, saying he and AMC believed in the tech scion’s talent as a filmmaker and a movie executive, as well as his pledge to release those 30 films a year.

“We’re enthusiastic that David will fulfill his promises,” Aron said. “And that in the end, this will prove to be a good thing for our company and our industry.”

Not everyone shares that enthusiasm.

More than 4,000 people have now signed an open letter opposing the Paramount-Warner deal, arguing that consolidating two studios will lessen consumer choice and job opportunities for creatives, particularly at a time when Hollywood is already struggling. (Notable signatories include “Dune” director Denis Villeneuve, actors Glenn Close and Emma Thompson, as well as director and producer JJ Abrams.)

O’Leary of Cinema United similarly wasn’t convinced.

“While recent pledges attempt to address the threats of consolidation to our industry, they are not yet sufficient in addressing our concerns,” he said in a statement released hours after Ellison’s speech. “We remain open to tangible commitments that will ensure a vibrant global theatrical exhibition industry for years to come.”

Elsewhere at CinemaCon, the mood was upbeat.

Warner Bros. film chiefs Mike De Luca and Pam Abdy struck a triumphant tone after an award-winning year for the studio, capped off by the best picture win for “One Battle After Another.”

They unveiled footage from new films like the upcoming “Digger” from director Alejandro G. Iñárritu and brought out lead actor Tom Cruise to a sustained standing ovation from the audience. And both De Luca and Abdy espoused optimism for the future of the theatrical business. The studio plans to release 14 films this year and as many as 18 for 2027.

“The film business has always required smart betting, and we have 4 billion reasons from last year to think we’re holding the right cards,” De Luca said during the presentation, referring to the studio’s worldwide box office revenue last year.

“We all know they’re not all going to work. That comes with taking swings,” Abdy said of the studios’ films. “There’s no version of this business that’s risk-free. But our job is to step up, make our bets and own it when it doesn’t work.”

But the end of the presentation felt more somber, with the executives asking the heads of Warner Bros.’ labels to come to the stage and be recognized. Shortly after, they asked Warner Bros. employees in the audience to stand for applause. It was hard to escape the feeling that this may be the end of an era.

Stuff We Wrote

Film shoots

Number of the week

1,000

Last week, Walt Disney Co. began a sweeping round of layoffs that’s expected to cull 1,000 jobs across multiple divisions.

As my colleague Meg James reported, the cuts hit Disney’s television and movie studios, sports giant ESPN, its product and technology unit, corporate functions and marketing. Even Marvel Studios’ visual development team was affected.

The layoffs are one of the first major moves under new Disney Chief Executive Josh D’Amaro, who took the reins of the company last month. In a message to employees, he said the company needed to “constantly assess how to foster a more agile and technologically-enabled workforce to meet tomorrow’s needs.”

What I’m watching

Some friends and I watched “Fukushima: A Nuclear Nightmare” this past weekend, a truly eye-opening documentary that explains what happened during the March 11, 2011, nuclear accident and whether the world has learned anything from it.

When the heads of three Los Angeles Unified School District unions stood side by side at City Hall to announce their new contracts after nearly going on strike hours earlier, one of them looked out of place.

Max Arias was decked out in a purple letterman’s cardigan emblazoned with “99,” for Service Employees International Union Local 99. United Teachers Los Angeles President Cecily Myart-Cruz wore a tie-dyed T-shirt that read “Solidarity LA.”

And then there was Maria Nichols, who looked like the school principal she once was.

Shiny black shoes. Black slacks. Light makeup. Tight smile. The only flash of color was her green V-neck union T-shirt, the logo peeking out of a black blazer.

Arias and Myart-Cruz gave impassioned speeches hailing the last-minute deals, which still need to be approved by union members and the school board. Nichols, who leads the Associated Administrators of Los Angeles/Teamsters Local 2010, started with a joke about her mere year and 10 months as a union leader.

“I’m the new kid on the block,” the 60-year-old said. “But we made a commitment. It’s not about equality, it’s about equity. … We are all better today for our collective work.”

AALA’s tentative contract calls for raises of more than 11% for the LAUSD’s 3,000 principals, assistant principals and middle managers — a lower percentage increase than SEIU’s 24% and UTLA’s 14%. But the contract also secured a 40-hour week with flex time off for extra hours, addressing long-standing complaints about grueling schedules.

On top of all that, Nichols has led her members into a new era.

“For a long time, principals have been perceived” as a class apart from other school employees, Arias said at the City Hall news conference Tuesday.

Not only are they many workers’ bosses, but with median salaries of $160,139 for elementary schools and $174,628 for higher grades, they make a lot more money. When UTLA went on strike in 2019, AALA stayed on the job.

This time, AALA and the other two unions vowed to all go on strike together if any one of them failed to get a contract.

“So them coming in,” Arias continued, “really shows our members that it is important to start figuring out how we work in solidarity.”

Nichols “called us and said, ‘I know that you guys have already been rolling, but I want to join in,’” Myart-Cruz added. “Having the leadership to be able to articulate that message to her administrators is a great thing. Solidarity is a great thing, but we now have unity.”

“I may be the new kid on the block,” Nichols told me afterward with a grin, “but I’ve been fighting for better schools for 42 years.”

We met a few days later at AALA’s Echo Park office.

“Excuse the mess,” Nichols cracked as we walked to her corner suite. She now wore a bright red pantsuit, union pins on her lapel. Hundreds of signs reading “Enough is Enough” leaned upside down against desks and cabinets. Chips, water and other snacks were piled inside collapsible carts.

“This was all going to be used for the strike,” she said. “You know what they say — expect the best but prepare for the worst.”

AALA /Teamsters 2010 President Maria Nichols hugs UTLA President Cecily Myart-Cruz during a news conference announcing a tentative agreement between LAUSD and the unions representing teachers, principals and workers at City Hall in Los Angeles on April 14, 2026. Above them is SEIU Local 99 President Max Arias.

(Robert Gauthier / Los Angeles Times)

A breakfast of blueberries and yogurt sat untouched as Nichols recounted her life story. She moved to Los Angeles at age 5 from her native Peru to join parents who left after a military coup. A star volleyball setter at Fairfax High, she gave up a University of Arizona scholarship her freshman year after breaking her wrist and finding it “too hard to watch the games and not be involved.”

Back home, she joined LAUSD as a bilingual teacher’s assistant while pursuing a degree in physical therapy at Cal State Northridge. Thanks to a succession of bosses she called “angels,” she stayed in public education. She worked in San Fernando Valley elementary schools as an assistant, a teacher and an assistant principal before a decade-long run as principal at Vena Avenue Elementary in Arleta, which was designated a California Distinguished School during her tenure.

That led to a promotion as a regional director for Valley schools, a job she loved despite the difficulties of shrinking budgets and enrollment. Nichols credited then-LAUSD Superintendent Austin Beutner with granting autonomy to principals in the district.

“We were all administrators from the field that had served time in this district and gone up the ranks,” she said. “That disappeared with [current Supt. Alberto] Carvalho. Gone. Gone.”

She pointed to a flow chart on the wall, titled “Ready for the World,” that Carvalho’s team distributed after he arrived in 2022. He brought in his own people instead of empowering existing administrators, she said.

“It’s a great plan,” Nichols said with no sarcasm while reading its goals aloud. “Because that is what we want. But we don’t invest in staff because we have a shortage. … We can’t have joy and wellness if your people are drying on the vine because they’re exhausted.”

Friction between principals and teachers over budgets and educational strategies increased. Frustrated, Nichols attended her first AALA meeting about two years ago.

“There were like 20 people there. And I thought, ‘This is it? This is where we are?’” she recalled.

Some principals urged her to run against the union’s incumbent president. One of them was Kathie Galan-Jaramillo, whom Nichols had hired to lead Sylmar Leadership Academy.

“Our union was very small, and it was very difficult for us to stand for what we believe in,” Galan-Jaramillo said. “But Maria knew all of the things and hurdles that we [administrators] had to do and go through, and the expectations.”

To prepare for negotiating a new contract, Nichols studied the existing one.

“It was so weak. The language was so antiquated,” she remembered thinking, especially when it came to making sure members weren’t being overworked. “And then I looked at UTLA’s contract and I said, ‘Holy crap. No wonder they get everything.’”

At the end of 2024, 85% of AALA members approved a Nichols-backed merger with Teamsters 2010, which represents higher education workers in California, to shore up their resources and try a different, tougher mindset.

“She has what’s lacking among many leaders — she has the judgment and humility to say, ‘I have things to learn and I’m up to it,’” said Teamsters 2010 Secretary-Treasurer Jason Rabinowitz, who sat with Nichols in contract negotiations. “And she’s a learner and quick study. That’s not always easy to do, because labor leaders have ego.”

After contract talks hit an impasse in February, Nichols reached out to Arias and Myart-Cruz to share research and strategy. They sold her on a united front. But initially, not all AALA members embraced the move, with some questioning why the union would still strike after getting a new contract.

“I was getting a lot of push back from members — ‘But if we get a TA [temporary agreement], why would we strike?” Nichols said. “But it wasn’t about the TA anymore. It was about the coalition. It was about sticking together. It was about power and unity. … My folks were not used to that.”

Nichols expects that AALA members will ratify the agreement.

“We’ll be done, and in May, we [Arias and Myart-Cruz] will go out and have some dinner, and, you know, adult beverages,” she said with a loud laugh.

Maria Nichols, head of the LAUSD principals union, AALA/Teamsters 2010, at her AALA office in Echo Park.

(Robert Gauthier / Los Angeles Times)

Then comes what she describes as the new alliance’s “heavy lies the crown” moment.

LAUSD plans to bankroll the contracts with money from Sacramento that may or may not come through, even as it plans to cut more than 600 jobs and school enrollment keeps dropping. SEIU’s new contract includes extra hours for members — who include custodians, bus drivers and cafeteria workers — so they can qualify for health benefits, Nichols pointed out.

“They deserve it,” she said, citing her respect for them because her father was a dishwasher and her mother cleaned houses. “But that impact of health benefits, it’s going to be directed at school budgets. OK, great. We got all of these wins, but how is that going to impact our budget at schools? Where’s the money going to come from?”

But these were issues for another day.

The conference room table was now covered in stacks of the same green T-shirt Nichols had worn at City Hall.

“We were going to give them out during the strike,” she said as her staff busied for a flurry of meetings. “But we’ll still give them out. We’ve got a job to do.”

It has been just one day at CinemaCon in Las Vegas, and there’s already a palpable sense of relief in the air.

Attendance at this year’s show is up about 5% from last year, according to Cinema United, the trade group that organizes the four-day convocation of thousands of movie theater owners, studio executives and industry folks at Caesars Palace.

Groups of people wearing orange-colored lanyards are everywhere throughout the hotel and casino, with many filling the Colosseum on Monday afternoon for a presentation from specialty film companies Angel Studios, Sony Pictures Classics and StudioCanal.

“The energy in every room reflected a sector that believes deeply in its own future,” said Stephanie Silverman, owner of the Belcourt Theatre in Nashville who serves on Cinema United’s strategic planning committee. “For independents, that sense of collective purpose is powerful — we’re not just holding on, we’re building toward something real and lasting.”

Amid such upbeat sentiment, CinemaCon allows theater owners and their business partners to see what’s coming from each studio and get a snapshot of the year ahead.

On Monday, Provo, Utah-based Angel Studios showed footage from their upcoming film “Young Washington,” about the early life of the first U.S. president, as well as a trailer from an animated retelling of George Orwell’s “Animal Farm.”

“Theatrical isn’t fragile,” Shelley Schulz, vice president of domestic theatrical sales and exhibitor strategy at Angel Studios, said during the presentation. “It’s not fading. It’s evolving.”

European indie film studio StudioCanal also unveiled some of its upcoming films, including scenes from a new animated “Shaun the Sheep” movie that got laughs from the audience, before bringing out director Danny Boyle to applause and cheers to speak about his new film “Ink,” about the beginnings of the British tabloid “The Sun.”

Later this week, Warner Bros., Universal, Amazon MGM, Paramount and Disney will unveil footage from their upcoming releases and likely bring their major stars on-stage to build excitement about this year’s slate.

As I reported Monday, a string of recent hits like Amazon MGM Studios’ “Project Hail Mary” and Universal Pictures, Nintendo and Illumination’s “The Super Mario Galaxy Movie” have pushed year-to-date domestic box office revenue about 23% higher than the same time last year.

The upswing signals that the exhibition business is embarking on its long-awaited recovery from the devastating downturn that occurred in the aftermath of the pandemic.

Studio executives and theater operators chalk up the improved prospects in part to a better and more plentiful crop of bankable movies that are bringing people back to the multiplex.

Exhibitors feel better about the lineup this year — it’s full of major franchises like “Star Wars” and Marvel superheroes as well as well-known animated titles such as “Toy Story 5” and “Minions & Monsters.” Also coming are anticipated films from acclaimed directors Christopher Nolan and Steven Spielberg.

“We’re getting into that cadence we needed in terms of having good movies, different types of movies being released every weekend,” Cinépolis USA Chief Executive Luis Olloqui told me ahead of CinemaCon. “This year in general, we’re feeling more confident, more optimistic.”

It’s quite the turnaround from the anxiety I heard last year leading into CinemaCon, when theater owners grappled with the box office downturn and the general shakiness of the industry.

Not to say that this year is all roses.

As I wrote, there are still major question marks facing the industry, including how Paramount Skydance’s proposed acquisition of Warner Bros. Discovery will affect the business. Paramount Chief Executive David Ellison has said the combined company will release 30 films a year, but exhibitors fear that cost cuts from the deal could impede that goal, which many believe is unrealistic.

And Hollywood is still going through a painful retrenchment.

Just last week, Sony Pictures Entertainment said it would cut hundreds of jobs across its film, TV and corporate divisions. Then came the news about upcoming layoffs at Disney, which could number as many as 1,000.

It hasn’t been much better in the exhibition space, either. In February, Dallas-based Look Dine-In Cinemas abruptly closed three Southern California locations; then, in March, the iPic chain filed for Chapter 11 bankruptcy protection and said it planned to pursue a sale of its assets.

A better box office this year wouldn’t solve all of these problems, but it would inject more hope into an industry that has been in turmoil since the pandemic.

Stuff we wrote

Film shoots

Number of the week

Warner Bros. Discovery Chief Executive David Zaslav could get as much as $887 million to leave the company after the Paramount Skydance acquisition.

That amount “represents one of the highest golden parachute estimates ever observed,” investor advisory firm Institutional Shareholder Services wrote in a recent report. The firm said support for the proposal “is not warranted.”

Warner shareholders will vote April 23 on the proposed takeover.

What I’m watching

For years, one of the shows on my weekly must-watch list is “Ghosts,” the delightful comedy about a couple who moves into a historic mansion haunted by its previous inhabitants. After a long week, the antics of Viking ghost Thorfinn always make me laugh.

The Writers Guild of America and the Alliance of Motion Picture and Television Producers have reportedly reached a tentative four-year deal for a new contract.

Negotiations between the union and film and TV studios began in March, with union leaders prioritizing more robust healthcare benefits, streaming residuals and protections against the misuse of AI tools.

Puck co-founder and reporter Matt Belloni first reported news of the tentative deal Saturday. The agreement represents a departure from standard practice, adding one more year to the WGA’s usual three-year contract. Additionally, it includes health plan and pension increases, bumps in streaming pay and protections that will police licensing for AI training.

The new contract is still subject to ratification following a vote by union members. The WGA and AMPTP did not immediately respond to requests for comment.

This tentative deal is a promising signal that the Writers Guild could avoid a strike after 2023’s historic work stoppage that lasted 148 days.

Separately, the Writers Guild of America West’s staff union has been on strike since mid-February.

The union’s current contract is set to expire May 1. WGA is the first of the Hollywood unions to reach a deal. SAG-AFTRA and the Directors Guild of America still need to reach an agreement with the studios.

The actors’ union began negotiations with the studios in February and extended those talks in March, but paused in order for the AMPTP to finish negotiations with the writers’ union. SAG-AFTRA and DGA’s contracts each expire June 30.