I’m going to start this week with a bit of a physics lesson. Bear with me, it comes back around.
I’ve been reading an interesting book, “Master of Change” by Brad Stulberg. In it, he brings up the concepts of Homeostasis versus Allostasis in managing rapid change, which I can use here to illustrate where I’m going with my views on what recovery from the strikes may look like.
Homeostasis is the process from which you start at a set point, for example you are healthy. A deviation from the set point occurs, for example, you get a cold. Your body fights the cold and when you recover, you return to the set point. That’s Homeostasis. Allostasis on the other hand, is the process of a deviation from the set point, but instead of eventually returning to the same set point, you return to a new and different set point. It could be better or worse than the original, but the new set point helps you to adapt to future deviations in more effective ways.
I saw a blogpost from a journalist today that said, “the Writer’s strike is over and the CEOs lost!” Yeah, not exactly. Everybody lost, especially BTL workers and IATSE and everybody else won. I know the WGA negotiators have to claim victory, well, because if they had only won 7 and 1/2 cents (Pajama Game Reference) and Work From Home rights from 6am to 7am on every 3rd Friday of the month they’d be claiming victory.
Yes, the deal looks good, and the WGA made major gains so maybe they did win. However, if the CEOs had wanted to, they could have made the same deal on May 2nd that they made on September 24th. Don’t fool yourselves, this is the deal they were always going to make. They didn’t just swallow hard and agree to the WGA demands.
From the Gang of Four CEO’s perspective, manufacturing a prolonged strike forced the studios to all stop production at the same time, creating no competition among themselves while they all saved 100s of millions to contract and reboot their streaming businesses to a version that might actually be profitable. Plus the two quarters of better earnings reports they could take credit for to their stockholders helps them keep their jobs. I will maintain to the grave that they wanted this to happen, and the WGA itself led their constituency right over the cliff. But then again, with no contract, what the hell were they supposed to do? See what I mean? Not much to take credit for, not much to take blame for. Just another day in Hollywood.
The Studios orchestrated this, and long before May 2nd. They were pulling the plug on production from the beginning of the year. This “pause” was planned well in advance, and made a reality by intractability of not only their positions, but the mere lack of willingness to have meaningful dialogue before the strike and right up until after Labor Day.
So now what? Now we all try to recover from Capitalism at its most obvious. How do we do that? Slowly. The deviation from the last set point has not been a cold that was over in a week. It is a major health event that will take years to adjust to. Try as I might, I was not able to find any relevant data or studies showing short and longterm effects from labor stoppages to provide context. Any statistics I did find only covered regular employees, and not free-lancers of which so much of the industry is made up of. So, we’re left with our experience to draw from.
2007-2008, when the Writers went out for 100 days in the midst of a real estate crash and the Great Recession provides the best and most recent comparison. The most pressing question is, how does anyone striking or affected by the strikes make up for lost income? The answer to that one is you really don’t. You lick your wounds and move on. It’s like in the Dark Ages when they came through the village in the morning with a wagon shouting bring out your dead! You dragged Grandpa’s carcass out of the hovel, and got on with your life.
We will not be able avoid a new and different set point where we will have to adapt to a new and different version of work as we know it.
I was running an agency during the 2007-2008 strike, though much smaller than now with low overhead. Even so, I wasn’t sure if I would make it financially, but did by the skin of my teeth, because I was very focused on TV Commercials, and we were still in the broadcast and cable era. While watching my agent friends in Features and Television struggle at that time, I became a big proponent of diversification lest someday the tables were turned and Commercials became the focus of a strike, which it eventually did. So, as WPA developed, my droning mantra of a balanced roster probably made everyone around me roll their eyes hundreds of times daily.
I still believe in diversification to hedge downturns. However, not at the level of CAA, WME and UTA, (see my last blog on those dynamics,) their vastly over diversified holdings are toxic to creativity and subjugates the Artist. Fine for movie stars and moguls, but if you’re trying to build a career, you will be left behind on the path of least resistance in service to shareholder returns. Plus, their lack of action during these strikes to leverage the AMPTP should not go un-noticed. The concentration for big agencies during the strikes on shedding agents and further diversification into far flung businesses should tell Artists all they need to know about their intent and plans for the future.
Here’s what I think we can expect in getting to a new set point and, you guessed it “acceptance of Allostasis”: SAG/AFTRA will settle with the AMPTP during October. We’ll see an uptick of projects going into prep. We hear from studio sources that some projects are just waiting to flip the switch, further convincing me that the studios are orchestrating the end of the strikes as much as the beginning. Netflix never stopped production, they just continued offshore with non-union crews and talent for specific markets. I don’t believe they’ll ever really be back. Our talent is now too expensive.
The actual set point is, January 2024 is when most will be back to work in an industry that will now produce 15%-20% fewer projects per year. Not even with significant salary and residuals gains can the WGA and SAG/AFTRA members expect amortized yearly income to increase over the next three years, based on the fact that by January, they will have lost at least eight to ten months of salary.
“I get knocked down, but I get up again, cause you’re never gonna keep me down…” – Chumba Wumba.
But, certainly all is not lost. The Allostasis of the moment demands us to all stay lean, mean and creative. I actually love the position that WPA is in, as the big agencies become more bloated and more dependent on debt, acquisitions and the aims of hedge fund managers, we remain independent, true representatives of Artists. Lithe and agile, and when it comes to diversification, only in support of our Artists and employees.
I suggest you do a version of the same. When your finances begin to recover, stay lean and mean for an extra eight months at a minimum to cover the lost revenue. That’s the best way to stay true to your art.
Hollywood is the lovechild of Art and Capitalism. Success depends on your ability to adapt and evolve. Onward.