Business

Warner Bros. Suspends Deals With Top Show Creators

When television and movie writers went on strike in May, studios quickly suspended certain first-look deals — mostly those for lesser-established writers. Star show creators like Mindy Kaling and J.J. Abrams were kept on the payroll. Worried about keeping them happy, even during a walkout, studios left their multimillion-dollar deals alone, shielding them from the pain of the strike.

No more.

In an escalation of the standoff between studios and the Writers Guild of America — it has entered its fifth month, with no end in sight — Warner Bros. moved late Wednesday to suspend deals with the 1 percent of television writers. That includes Ms. Kaling, a creator of the Max series “The Sex Lives of College Girls,” and Mr. Abrams, whose recent television efforts include “Duster,” a coming thriller set in the 1970s, according to two people briefed on the matter, who spoke on the condition of anonymity to discuss private suspension notices.

Warner Bros. also suspended deals with Greg Berlanti (“Superman & Lois”) and Bill Lawrence (“Ted Lasso”), among others, the people said.

A spokeswoman for Warner Bros. declined to comment. Representatives for the writers either declined to comment or did not return calls. A spokesman for the Writers Guild of America had no immediate response.

Top writers have contractual protections that will ultimately enable them to receive all the compensation promised in their original deals. Warner Bros. is doing what is known as “suspend and extend,” according to the people briefed on the matter, meaning that the studio will halt payments for the duration of the strike — and then, when work resumes, extend the contracts by the amount of time they were suspended.

The suspension of the A-lister deals suggests that the Alliance of Motion Picture and Television Producers, which bargains on behalf of studios, expects the strike to continue into the fall. (A representative for the studio alliance declined to comment.) Studio executives had signaled that Labor Day was an inflection point; the industry sitting idle beyond that date would have a severe impact on the 2024 release calendar, particularly for movies.

J.J. Abrams’s deal was also suspended. The move can exert more pressure on the striking writers guild.Credit…Jerod Harris/Getty Images

Warner Bros. Discovery said in a securities filing on Tuesday that the Hollywood strikes — tens of thousands of actors joined writers on picket lines in mid July, the first time both unions have been on strike at the same time since 1960 — would negatively affect its 2023 earnings by up to $500 million.

“We are trying to get this resolved in a way that’s really fair and everyone feels fairly treated,” David Zaslav, the chief executive of Warner Bros. Discovery, said at a Goldman Sachs event on Wednesday. “Having said that, in our guidance, we said that this would be resolved by September. And here we are in September. This is really a very unusual event — the last time it happened was 1960.”

Suspending the deals of prominent writers is one way for the studios to try and put pressure on the writers guild. During the last writers’ strike, in 2007, a small group of showrunners agitated for union leadership to settle with the studios as the stalemate wore on. That strike lasted 100 days; the current strike is now at the 128-day mark.

Studio officials and Writers Guild negotiators have not met formally since Aug. 23, when talks broke off for the second time and the companies publicly released their latest offer in an appeal to rank-and-file members. Studios were hoping the offer would look good enough for members to pressure their leaders to make a deal.

But the move seemed to have the opposite effect, instilling the 11,500-member Writers Guild with renewed resolve to keep fighting. “The companies’ counteroffer is neither nothing, nor nearly enough,” guild leaders said in a note to members on Aug. 24. “We will continue to advocate for proposals that fully address our issues rather than accept half measures.”

The studios defended their proposal as offering the highest wage increase to writers in more than three decades. The studios also said that they had offered “landmark protections” against artificial intelligence, and that they vowed to offer some degree of streaming viewership data to the guild, information that had previously been held under lock and key.

Both the writers and the actors have called this moment “existential,” arguing that the streaming era has deteriorated their working conditions as well as their compensation levels.

Nicole Sperling contributed reporting.

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