Who Can Solve Hollywood’s Labor Problems?

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“To survive in Hollywood, all you need is an occasional miracle.”
An amateur philosopher named Ronald Reagan once directed those words to me, referring to the unexpected labor crisis of 1960. Hollywood’s actors had shocked their industry by voting to strike and now looked to their leader, Reagan, then president of SAG, to advance a solution.
Reagan was far from a resolute figure at the time. He had won his following as a crusading liberal Democrat but had now decided he was a Republican. A true believer, Reagan nonetheless forged ahead, soon finding his instant miracle and taking bows for putting the industry back to work (more on that below).
Hollywood today is looking for another Reagan miracle even though neither the industry’s structure nor its economics makes much sense to its audience or the stock market. Indeed, if Reagan was surprised in 1960 he would be even more bewildered at this moment when, once again, Hollywood is searching for leadership.
In Reagan’s era, Hollywood was ruled by a club – one that has since become extinct. “The tech companies now in control haven’t a care or a clue about the entertainment business,” as Barry Diller puts it. Like other industry leaders, Diller fears the devastating impact of a long-term stoppage.
The agendas of companies like Apple, Amazon or even Netflix are not in sync with those of today’s studio power players. Leaders like Bob Iger or David Zaslav have dropped comments triggering the sort of “class warfare” tensions reminiscent of 1930s, not the 2020s. Powerful agents like Bryan Lourd or Ari Emanuel have attempted to become calming influences. But they, too, have warred in the past with the WGA over packaging fees and ancillary production entities.
In generations past, Hollywood’s miracles often took the form of hit pictures — hence optimists draw encouragement from the promising prospects now lined up on the runway. Tom Cruise’s latest Mission: Impossible has already taken flight, to be followed – even topped — by Oppenheimer, Barbie and others.
‘Barbie’ and ‘Oppenheimer’ hit theaters this week Warner Bros./Universal
If they live up to expectations, their impact could go far beyond the box office: A major hit could re-energize a creative community that has succumbed to the woes of streamerville.
Hollywood veterans remember vividly the extraordinary impact of Titanic in reversing a major sag in the late ‘90s. Earlier, In the 1960s, surprise indie hits like Midnight Cowboy and The Graduate silenced doubters who’d feared that the 40% defection of filmgoers would be a permanent phenomenon.
So could a few hits once again remind the community of Reagan’s miracles? Says one CEO who declines to be quoted: “The writers and actors strikes will likely choke off a possible resurgence. The stars will have to sit on the sidelines and the festivals will perish.”
Today’s conditions, of course, contrast sharply with those of the Reagan Moment – the cast of characters is different and so is their motivation.
In the Reagan era, the leaders who gathered around the bargaining table had grown up together in the industry and understood the obstacles ahead. Not only was the box office fading but the antitrust crusaders had suddenly decreed that the studios must exit the distribution business.
At the same time, Hollywood stars were adding a new word to their vocabulary: residuals. It became Reagan’s mission as SAG president to persuade the studios that residuals were now a key to future peace.
The upshot: An urgent dialogue between Reagan and the powerful Lew Wasserman who, while president of Universal, had formerly been Reagan’s agent. As members of the club, the time had come for some gentlemanly bargaining: Wasserman could steer residuals to the stars while SAG could reciprocate with important concessions that would help Universal. It was all within club rules.
As a miracle worker, Reagan, of course, would soon shift his ambitions from acting to a more intriguing horizon; there was a life beyond Hollywood. As an aspiring political figure, he was eager to explain his intentions and strategies to someone like me – I was then the New York Times reporter in Los Angeles covering both politics and Hollywood.
As an ex officio member of the media club, I would understand his belief in miracles. And I would also realize that the true subtext of the Wasserman-Reagan negotiations had more to do with long-term political support and funding than with residuals or TV packaging structures.

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