Financial Analyst Claims New WGA Deal Will Put Writers Out Of Work As Studios Cut Film And TV Productions
Financial analyst and YouTuber Valliant Renegade reacted to the recent deal the Writers Guild of America (WGA) signed claiming it will end up putting a number of writers out of work.
The Writers Guild of America West announced they had cut a deal with the studios earlier this week writing on X, “The WGA reached a tentative agreement with the AMPTP. Today, our Negotiating Committee, WGAW Board, and WGAE Council all voted unanimously to recommend the agreement. The strike ends at 12:01 am.”
The organization also shared a link to Memorandum of Agreement between the union and the studios.
Reacting to the deal, financial analyst Valliant Renegade shared on YouTube, “The union bosses of the WGA have declared victory against Hollywood studios; meanwhile, a lot of the rank and file writers, the union members themselves are probably going to be out of work and perhaps even looking for new careers.”
He went on to explain why, “So, pretty much as we predicted or as any economics textbook could have predicted of this, if there was going to be an artificial increase in labor costs then there was going to be a necessary offset by way of production costs.”
From there Valliant Renegade cited an article by Deadline’s Nellie Andreeva who notes the studios won’t be making as many TV shows and thus there won’t be as many jobs for the writers.
Andreeva states, “Accelerated contraction, more competition, reeled-in budgets, fewer overall deals and possibly more cancellations are some of the things industry sources are preparing for.”
To that point, Andreeva quoted an anonymous executive who informed her, “No one is buying. This is the worst marketplace that I have ever experienced.”
An anonymous writer also informed her, “Across the board, what I have heard from buyers is they will be buying less and making less.”
Another anonymous studio executive also stated, “The strike just sped up the inevitable pullback; I suspect everybody will be doing less.”
While Andreeva cited a number of anonymous sources. The Walt Disney Company CEO Bob Iger and Marvel Studios President Kevin Feige have made it abundantly clear they are cutting back the amount of shows and movies they plan on producing in order to cut costs.
Needham financial analyst reported that Iger and Disney plan to “lower output by Marvel Studios and lower the cost per unit” after attending an investor event at Walt Disney World earlier this month.
Earlier this year, during The Walt Disney Company’s Q1 FY 23 Earings Results call, Iger stated, “We have to be better at curating the Disney, and the Pixar, and the Marvel, and the Star Wars of it all.”
He added, “And, of course, reduce costs on everything that we make. While we are extremely what’s proud on the screen, it’s gotten to a point where it’s extraordinarily expensive. We want all the quality. We want the quality on the screen, but we have to look at what they cost us.”
Feige told Entertainment Weekly in February, “We want Marvel Studios and the MCU projects to really stand out and stand above. So, people will see that as we get further into Phase 5 and 6. The pace at which we’re putting out the Disney+ shows will change so they can each get a chance to shine.”
When asked if he would be spacing them out or putting out fewer shows per year, he responded, “Both, I think.”
Later in the interview he would reveal, “I think when we are doing about eight projects a year — and again, I said this is going to shift a little bit — they all have to be different. They all have to stand apart and stand alone and be different from one another.”
It’s not just The Walt Disney Company, Bloomberg reported in March that Netflix would begin cutting back the numbers of films it produced. The outlet’s Lucas Shaw reported, “Film chief Scott Stuber is attempting to scale back the company’s output so that he can ensure more of the titles are of high quality.”
The report came as Netflix centralized a number of its film production departments and let go of executives Lisa Nishimura and Ian Bricke.
In July, Bloomberg’s Shaw also reported that Amazon began looking at cost cutting measures for its Prime Video productions.
He claimed, “[Amazon CEO Andy] Jassy is now trying to get a better handle on why specific shows cost what they do, based on conversations with more than a dozen different people who either work at Amazon or have worked with the company on projects.”
In fact, just a couple of months after this report, Prime Video scrapped the second season of Peripheral despite previously announcing it had been greenlit.
Valliant Renegade then surmised, “And there you have it folks, Economics 101 as I mentioned earlier. When you artificially increase the price of labor beyond what the market can bear then the market is going to respond by producing less market, or the market is going to have to charge higher rates for that product in order to make up the artificial cost increase.”
“And what’s the one thing that Hollywood really can’t do right now? Charge advertisers more. Why? Because they’ve already been in an advertising slump for the last 12 months,” he elaborated.
Valliant Renegade concluded, “When it comes to strikes the unions always win. And I don’t mean the members. The union bosses always win and the members, perhaps, many of them have already signed their own career death warrants.”
What do you make of Valliant Renegade’s analysis that the WGA deal will put writers out of work?