Visualizing and Quantifying the WGA-AMPTP Negotiations Part I: Overall Compensation
The WGA and AMPTP Are About $150 million Apart…Where Do They Settle?
Negotiations have a sort of Kabuki theater aspect to them nowadays. (By the way, I’m not an expert in high-level negotiations like, say, an agent or M&A banker, but I have done a few high-level negotiations, so I’m not a know-nothing novice either.)
See, at this point, everyone has been trained, usually in business school, on the same principles. In particular, the concept of “anchoring” negotiations.
A robust body of evidence shows that whoever “anchors” a negotiation higher tends to get final outcomes closer to what they want. Say you’re an agent negotiating a raise for a star actor in a TV series. You want them to make $250K per episode. Well, you don’t ask for $250K, since the studio will naturally counter at a lower number, and then you won’t get the raise you want for your client. So you ask for $275,000. But the studio knows this—and assuming they only want to pay $225K—they counter at $175,000. But you know that that’s what they’ll counter, so you actually ask for $300,000...and so on.
The problem is both sides know about “anchoring”, and know the other side knows this (or should!) and you get situations where each side deliberately bids way above or below where they actually plan to settle.
Of course, this applies the WGA-AMPTP negotiations. The most public WGA negotiator, Adam Conover, even warned WGA members back in February that the AMPTP would likely open by proposing cuts to writer pay. Meanwhile, the L.A. Times and others reported that the WGA asked for $600 million in increases. But both sides knew they’d meet somewhere in the middle eventually. (Trust me, I’d love to tell you what the AMPTP actually opened with, but no one has reported it yet.)
Such is life in negotiations.
For a data wonk like me, the single most interesting thing that happened after the strike started was that I finally got the data I need to analyze how far apart the two sides are from each other. A day after they went on strike, the WGA released a two page document outlining their demands. Even better, the WGA told us the specific numbers they asked for, so I can analyze them myself. (Something that, correct me if I’m wrong, that despite the deluge of coverage, no one else has actually done yet?)
Once the numbers are out there in black and white, we can actually model them.
So that’s the plan. Today, I’m going to look at how far apart the two sides are. The next time I write about this—probably not next week, since my plan is to write about different things so it’s not all WGA/AMTP all the time—I’ll look at the ramifications of the proposed increases to TV minimums. In a future article, I’ll look at other issues, like residuals. And I'll probably write about a lot more topics, depending on how long the strike lasts.
My focus from here on out—actually as it’s been the entire time—is on the strategy of each side in this negotiation. (To avoid repeating myself in each WGA post’s introduction, read my explanation/philosophy on that here and another pre-article caveat here.) And since “strategy is numbers”, that was my focus when I debunked myths, and it will be my focus today.
Overall - How Far Apart Are the Two Sides
(If you want an explanation of my methodology, it’s at the very end of this article.)
Let’s start with the highest level look, the total impact of the proposed increases to wages from both the WGA and AMPTP. As I showed a couple of weeks back, at the highest level, the story of the WGA is told by how many members are getting paid and the total amount they take home. The WGA leaders echoed this saying, “It’s about compensation, compensation, compensation.”
To set the table, here’s both of those numbers, including both TV and Film screenwriters:
This was the same chart I referenced from Variety in my “debunking” article. I’ve since got my hands on all the data myself. As a reminder, this is the total pay reported to the WGA by writers for pension, health insurance and dues purposes. One source also told me that these numbers do NOT include over-scale pay or producing fees, so the total take-home pay by writers is higher by some unknown amount.
Here’s the growth of writing compensation over time, as reported to the WGA, which has been driven by the growth of TV pay in particular:
In March, the WGA began negotiations with the AMPTP. According to the trades, the WGA put out their initial set of demands, as I mentioned above, and it totaled to a $600 million increase per year, an 34% increase over 2019’s peak and an 39% increase over 2021’s peak. Unfortunately, we don’t know AMPTP’s initial offer, but the WGA did warn it could be low. My gut is it was fairly small or flat.
Naturally, the AMPTP countered and, depending whose math you use, they countered at either a $41 million raise or a $97 million raise. Then the writer’s countered at $429 million. So you want a visual? Here you go:
That chart goes by time,1 but we could also go from highest to lowest, because then you can basically see where the ultimate compromise lies:
Ignoring all the rhetoric, what this boils down to is where the two sides settle. If we assume the AMPTP offered a minimal $25 million raise as their initial offer, and the WGA did ask for $600 million, then “meet in the middle” logic implies somewhere around a $300 to $325 million increase.
How Much Would the Proposed Increases Boost Writer Pay?
But what does those numbers mean? Well, let’s return to our first look at total compensation. Basically, you can see how the WGA thinks it would improve things: