The Writer’s Just Got a Big Raise…But Just How Big?

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(Welcome to the “Most Important Story of the Week”, my bi-weekly strategy column analyzing the most important (but often not buzziest) 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. Please subscribe.)

We don’t have to wonder what the story of the week was…the WGA announcing, and then WGA board ratifying a deal with the AMPTP is clearly the biggest story of the last two weeks. (Currently, the writers are voting on the deal, but everyone in town expects them to approve it.) Obviously, this means the town won’t go right back to work—uh, the actors are still on strike!—but it clears the way significantly.

All that said, once the strike ended…it seems like every trade publication wrote on article on the sorry state of the film industry. (Articles they seemingly held until after the strike ended…)

Seriously, everyone wrote an article like this. EVERYONE! 

TV Business Faces Further Contraction As Marketplace Reopens: ‘The Bubble Has Burst’

Streaming’s post-strike content contraction is coming

The Post-Strike State of TV and Movie Writing: Matt and Lucas Shaw debate whether writers will migrate toward movies as TV production slows down in the wake of the strike

Peak TV Is Over. A Different Hollywood Is Coming

Will the WGA deal still improve the situation for writers, despite this drawdown? (Spoiler alert: My data says yes.)

So let’s look at the WGA deal. I’ll update some of the charts I made throughout the strike, then I’ll provide my thoughts on where the WGA could go next. Then we’ll dive into a few big streaming stories that would have claimed the top spot. That, and a host of M&A news…

Before that, I mentioned some shout outs for your truly last week, then my researcher pointed out that a bunch of people mentioned us in September or late August, and I meant to share those links with you as well. 

Remember, if you’re a journalist, always feel free drop me a line! I’d love to chat. 

Most Important Story of the Week – The WGA Deal in Numbers

At the start of the strike, I decided to dig into the WGA salary numbers to understand the writer’s financial situation. Then, after both sides released their proposals when the strike started, I dug in further to understand how far apart each side was. Now that the strike is resolved, we can update those numbers for the last time, to understand how much the WGA gained here.

(Quick note: I didn’t do this exercise for SAG-AFTRA, since their agreement with the studios is much more complicated, serving multiple types of actors.)

Let’s start with the headline number: the WGA announced (and implicitly the AMPTP agreed) that this deal would net them $233 million per year. Those last two words—“per year”—really matter too. I had assumed past deals were also in “per year” terms, but they weren’t, they were in “per three year deal term” terms. So let’s update our big chart:

For context, past deals announced gains over the course of the terms (including 2020, a gain of $200 million) and 2017 (a gain of $130 million over the term). Those net out to $66.6 million and $40.3 million, roughly. (I couldn’t find 2014, 2011 or 2008. If you know those, send me a note!) 

Let’s make a chart for that:

(Of course, I didn’t update the for inflation, which has definitely gone up compared to 2020 and 2017. Inflation-adjusted raises was one of the main WGA negotiating points. I don’t have time to model that just now, but these gains well exceed inflation.)

So yeah, more than doubling the total gains (over $500 million during the term compared to $200 million) is a big raise.

And now we can put the new deal in terms of “increases per year” to the average salary, and it’s considerable. If a similar number of writers are employed, that raise is roughly $39K per year per working writer, or $117K per person over the term:

Lastly, we can put this change in context of WGA total earnings per year. As a reminder, we don’t have 2022 earnings yet (the WGA said they’ll release it after their deal is ratified, but I estimated it here), and 2023 will be dramatically lowered due to five months off work. Here are my estimates for how that will shift, if content spending stays roughly flat.

(Reminder, these numbers are NOT inflation adjusted. To estimate future content spending, I took the three year average from 2019 to 2022.)

As I mentioned above, now that the deal is signed, basically every news outlet came to the conclusion—that I did, oh, five years ago—that streaming isn’t a good business and that peak TV was unsustainable. The big question is, “Did the writers do enough to save themselves from this contraction?”

Assuming content declines by 25% (from 600 roughly English language scripted shows per year to 450), here’s how total writer compensation could change:

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The Entertainment Strategy Guy

The Entertainment Strategy Guy

Former strategy and business development guy at a major streaming company. But I like writing more than sending email, so I launched this website to share what I know.


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