Exclusive: WGA Screenwriter Earnings Likely Broke Records in 2022...
The Most Important Story of the Week for 20-July-2023
(Welcome to the “Most Important Story of the Week”, my bi-weekly strategy column analyzing the most important news story of the last two weeks. I’m the Entertainment Strategy Guy, a former streaming executive who now analyzes business strategy in the entertainment industry.)
Since I’m now writing for The Ankler every other week, my goal is to have my “most important story” column go out in alternating weeks. While I know a lot of my readers would love to have this column go out weekly, quite a few are fine with it every other week. (And that helps my sanity/work flow. For now.)
Of course, I’m due to write for The Ankler this week, so why am I publishing a “Most Important Story of the Week” column today? Because we have a most important story traffic jam! SAG-AFTRA going on strike is huge, huge news…but so is Microsoft-Activision winning their trial against the FTC. (And in addition to those stories, Netflix had their earnings call yesterday, CAA is flirting with a sale, and Bob Iger made lots of “news with no news” about selling ABC too.) In fact, I think the Microsoft-Activision story could be—only could be—even more important, long term, for the entertainment industry than the strikes.
So today, I’m focusing on Hollywood’s labor negotiations. I’ll get to SAG-AFTRA going on strike in a second, because first, we got a juicy piece of data from the WGA that, as far as I can tell, only one (just one!) single, solitary news outlet even covered it.
And it’s literally the most important data we need during a strike…
Visual of the Week - The WGA Made Approximately $1.9 Billion in Earnings in 2022
In the WGA-AMPTP negotiations, what’s the most important part of that strike?
It’s what the writers get paid, right? I mean, that’s what this whole fight is over.
So you’d think that if a major report came out showing exactly what writers do get paid, that’d be huge news. That’s what this huge strike, which shut down all of Hollywood, is all about! Pay! That’s all anyone would want to talk about, right?
Around this time of year, the WGA releases their annual financial statements. (Sometimes the reports come out in 29-June last year and the year before; other years they come later.) With their financial disclosures, the guild includes a report on the state of the industry, including total income reported by members. The report just came out and here’s the key graphic:
That’s only the WGA’s member dues, collected from writers, because that’s all the WGA reported as part of their financial disclosures this year. Unlike past years, they didn’t include how many writers got paid or what they got paid.1
It’s worth remembering the EntStrategyGuy iceberg analogy: since companies and organizations are self-interested, they only voluntarily release information that makes them look good. That means most companies or organizations try to keep any data that makes them look bad hidden. Indeed, if writer pay had plummeted in 2022, the WGA likely would have released that information to justify why they’re asking for pay increases and to bolster their argument that there’s never been a worse time to be a writer.
Again, it’s not bad to be self-interested; everyone is! But as news consumers, it’s our job to understand when self-interest is at play.
Anyways, I really wish we knew the WGA total reported income, since it’s such a crucial data point in this fight. To show you the data we’re missing, I’ll plot the WGA’s fees against the “total reported earnings” to the guild:
Huh, the fees and earnings seem to move together. Which makes sense, since fees are a portion of earnings. Hmmm. Let’s put that in a scatter plot to double check…
Yeah, they’re super correlated. So at this point, we could use the slope of the line to make a forecast for writer earnings in 2022…
So I would say it’s likely writer earnings hit an all-time high in total terms. Of course, inflation. Here’s adjusting for that:
(Remember, according to my sources, “total reported earnings” for writers only includes WGA minimum scale payments made to writers and excludes any producer fees. So while we know “total reported earnings” was likely around $1.9 billion, that’s the floor, as total writer compensation was much higher. However, writers do report if they received “over-scale” pay, which is how the WGA collects that data, which they publish most years as well. But not this year. We also don’t know the “distribution” of pay, meaning how much goes to the top 50%, to 10% and top 5% of writers versus all writers.)
I think a couple of factors could have influenced this increase.
As speculated by the WGA, the rise in total earnings was due to an increased volume of work to get ahead of the strike, which explains this record-setting year. Deadline also pointed out that, before the 2008 previous strike, there was also a surge in salaries. But in 2007, the surge was under 10% and this growth is much larger than that.
Deadline speculated that inflation could also be to blame for this big rise and…that doesn’t make sense to me. Again, from what I have been told, these “total reported earnings” aren’t actually the total earnings. Again, they are the “reported” earnings. And writers don’t report more than the minimums to minimize their payments to the guild. Since minimums haven’t increased with inflation—that’s what the WGA is fighting for!—inflation likely didn’t drive this increase.
The other factor is just that 2022 was a return to normal production after two years of pandemic restrictions amidst the end of the content bubble, which has probably finally burst. Which makes sense, since Hollywood did release a record number of shows in 2022, according to FX Research.
I would add, “total earnings” also don’t get us to the key issue: how much did writers make per capita? Meaning per person? In the past, we could find the “mean” average by dividing the number of working writers by the total, but again the WGA didn’t provide that data. Here is where I plotted total earnings against employed writers:
If the number of writers stayed flat in 2022—which I doubt—then the average pay went way up. If went up with the total rise in pay, then the averages likely stayed the same, but many more writers were working. But we just don’t know either way.
Some quick bullet point thoughts on this:
To be fair to Deadline, at least they wrote about this! As of noon on 19-July, none of the other trades had reported on this report and its data or lack thereof. (Check for yourself by scrolling their strike coverage.)
Again, why didn’t more outlets cover this (lack of) news story? The media loves writing about writer pay! How many articles have you seen about writers being underpaid, not getting residuals, etc, using anecdotes from social media or interviews with writers on the picket lines? Isn’t the raw data a much better source of truth? If so, why would the WGA withhold it? More articles were written about “treegate” than the WGA not releasing this huge source of data!
Yes, there is some irony that one of the biggest fights in the negotiations is over “data transparency” from the streamers and…we have a lack of data transparency here. (To be clear, I think the lack of ratings transparency from the streamers is one of the biggest issues in entertainment. No one wants more data than me!)
By the way, I normally dislike "Exclusive" headlines, but I searched the trades and didn't see anyone estimating writer earrings in 2022, so it is "exclusive" to my readers.
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Most Important Story of the Week - SAG-AFTRA Starts a “Double Strike”. How Long Will It Last? And How Much Damage Will It Do?
The most common question I get on the strike is how long it will last. And if I could tell you that, I’d be really good at predicting the future.