Class War Comes to Hollywood

Will high profile strikes in Tinseltown be the tipping point that unites working Americans?

As some of you may know, I am an entertainment lawyer. That may sound cool and a little glamorous, but it’s not. Over the past two decades, this business has become a relentless grind, a frenzied hustle.

It wasn’t always this way.

When I got my first gig at Walt Disney Television in 1999, the entertainment industry was actually fun and exciting. There wasn’t much turnover, and it wasn’t unheard of for lawyers to work at media companies for twenty years or more. The benefits, including Cadillac-level health care and generous 401Ks, were fabulous, and the perks were impressive. Disney, for example, awarded employees a “Silver Pass” for unlimited, free admission to theme parks every year for up to four people, in addition to free parking and a discount on food and merchandise.

A-list talent like Tom Cruise and Julia Roberts were industry royalty, but even those laboring below-the-line (casting directors, grips, costume designers, etc). could earn middle and upper middle class incomes without a college degree, if they worked hard enough and were skilled at networking. These people weren’t part of the One Percent; they sat a couple of notches below. Let’s call them Three Percenters.

Back then, studio and network chiefs respected the craft of making television and movies. They understood the need to earn profits (there’s a reason they call it the “business”), but they also embraced the goal of making art that was profitable. It was a difficult needle to thread, but when done right it allowed industry participants to enjoy the best of both worlds. And that’s what made Hollywood such a wonderful place to work.

But now those days are gone.

Hollywood successfully weathered cable television and VCRs, but the internet (or more precisely, streaming services such as Netflix, Amazon, and Hulu) has turned the industry inside out. Over the last ten years, however, panic has seeped into Tinseltown as media behemoths have madly scrambled to position themselves in a new media landscape that seems to shift almost daily. A flurry of mergers and acquisitions have consolidated film and TV divisions into a handful of conglomerates, with Apple, Disney, NBC/Comcast, Netflix, and AT&T/Time Warner leading the pack. Studios and networks are no longer run by creative geniuses like Louis B. Mayer or David O. Selznick; they’re helmed by bean counters obsessed with quarterly earnings and genuflecting to Wall Street (or China).

Companies that once lost employees only when they retired or vaulted to higher-paying positions now stage periodic layoffs to reduce head count. For the last 15 months, the entertainment business hasn’t gone more than a few weeks without job cuts at a major media company. Entire departments have vanished in the blink of an eye. It’s as if hydrogen bombs have been dropped randomly over Los Angeles, leaving gaping craters where careers and lives once existed.

Employee benefits have shriveled, too, and perks are almost non-existent (Disney no longer offers a Silver Pass; employees are awarded 1 or more tickets, depending on seniority, each year). Continued employment is the only perk that matters now. Life has changed dramatically for Three Percenters in Hollywood. Regardless of our job title or income, none of us feel secure. We’re all low-hanging fruit, ripe to be plucked.

I saw some of this coming when I quit my job at MTV Networks in 2011 and moved to Montana. No, I’m not psychic, and I didn’t anticipate the streaming revolution. But I was paying attention to the bigger picture. I could see distortions in my reality, i.e. the difference between the world presented to me by our government and the news media and the world I actually lived in, because I saw what was happening to Fifty Percenters, the vast swath of Americans beneath me on the class ladder.

My aunts, uncles, and cousins lived in southern California too, but east of the 405 freeway and light years away from the West L.A. circles I traveled in. Their grip on the class ladder was tenuous, at best. They held jobs as bank tellers and civil servants, but still lived paycheck-to-paycheck, working side hustles (long before the gig economy was a thing) to fill the gaps. They were part of the “new” middle class: struggling, stoic, silent, forgotten. Watching what they experiencing allowed me to see other disturbing cracks emerging in the economy. I began to notice local businesses coming and going at a faster clip, more homeless people gathering at freeway underpasses throughout the city, and more people presenting EBT cards to pay for groceries and other necessities.

My Three Percenters friends and colleagues in Hollywood weren’t picking up on any of this. They were seeing and living a completely different reality.

They were still making low to mid six figure salaries, driving high-end cars, taking exotic vacations, and eating at trendy restaurants. They were focused on jobs they were devoting increasingly insane hours to, trying to secure their spots on a ladder that was becoming more precarious than they cared to admit. When I mentioned what I saw happening east of the 405, I received blank stares or confused gazes. Their busy lives forced them to rely on “trusted” sources to tell them what was happening to people in places they didn’t live. Economic dislocation wasn’t breaking news back then. No one joked about inflation on late-night talk shows. Their world seemed mostly fine, and their lives were moving along more or less as expected.

So, why am I giving you this background? Because the past few weeks have made it increasingly clear that we’ve reached a pivotal moment in Hollywood. The people who were once oblivious to what was happening east of the 405 are getting a wake-up call of unimaginable proportions.

On May 2, the Writers Guild of America (WGA), the union that represents nearly 12,000 writers of film and television, went on strike. While that raised some eyebrows, it’s what happened two weeks ago that really made waves. On July 14 the Screen Actors Guild and the American Federation of Television and Radio Artists (SAG-AFTRA), the unions that represent 160,000 actors, joined the WGA on strike. For the foreseeable future, production in Hollywood has ground to a halt, and no one knows when it will resume (most insiders think the strikes will last until Fall).

In the meantime, a lot of people in the entertainment industry aren’t working.

I’m not just talking about highly-paid writers and actors; I’m talking about hundreds of thousands of other middle class Americans — from caterers to electricians to animal wranglers — who depend on Hollywood productions to feed their families and keep a roof over their head in an industry that’s becoming increasingly tenuous and downright scary.

Of course, it’s not unusual for these unions to strike. Actors and writers hit the picket lines in 1980 and 2007, respectively. But both unions haven’t been on strike simultaneously in 63 years, and I can’t emphasize strongly enough how much the landscape in this business has changed in the last six decades.

I won’t bore you with the list of union demands and the AMPTP’s response and position on these issues. Suffice it to say that studio and network execs think writers and actors are being greedy and “unrealistic,” and writers and actors think media companies are being greedy and selfish. I believe the truth lies somewhere in between, but I also believe that’s largely irrelevant. What matters far more is the bigger picture.

I think we are seeing a new front open in a class war that has been brewing for decades. The people being forced to take arms in his battle aren’t used to fighting, and they don’t want to fight. But unlike the troops who’ve quietly languished in the trenches of this war for years, they have the power to raise their voices and make a stink about it.

Until now, Hollywood has managed to avoid being dragged into this class conflict. Why? Because the entertainment industry and Tech are two of the remaining pillars propping up what’s left of the U.S. economy. They’ve remained intact, even as economic dislocation in manufacturing and retail has decimated the working and middle classes.

When Donald Trump cinched the White House in 2016, Hollywood didn’t give much thought to why white working and middle class Americans voted for him in droves. They dismissed the people who’d been thrashed by NAFTA and technological “advances,” whose jobs had been rendered obsolete and wages reduced to unsustainable levels. They accused these early casualties of class war of being racist for supporting the only candidate who bothered to speak to their plight. But now the technology that ended a way of life for millions of Americans is coming for writers, actors, and the hundreds of thousands of people who depend on them to earn a living.

Although negotiations between unions and the AMPTP have turned into a game of “he said, she said,” two issues sit atop a hill that both parties are willing to die on: residuals and artificial intelligence (A.I.).

In the past ten years, Hollywood’s entire business model has radically changed. More content is flowing from streaming services, or “streamers,” like Netflix, Amazon, and Apple. Whereas broadcast networks like ABC, NBC, and CBS frequently order as many as twenty-two episodes of a series each season, streamers often order as few as six or eight. Fewer episodes translate to less money for writers and actors. Moreover, residuals, the long term payments they receive when shows are re-run or go into syndication, are a significant source of income for actors and writers that helps them cover expenses while they are between gigs. Streaming services, however, pay next to nothing in residuals.

And then there’s A.I.

Computer generated graphics are already creating elaborate backdrops that reduce the need for on location shooting, but A.I. could take this several steps further. Might we see a ChatGPT-written episode of Grey’s Anatomy? Could media companies take an actor’s image from one show and use it in a completely different one, without their knowledge or consent? As things currently stand, it’s completely possible. (If you want a glimpse into every actor’s worst A.I. nightmare, I highly recommend you check out the “Joan is Awful” episode of Netflix’s dystopian series Black Mirror).

Not surprisingly, the WGA and SAG-AFTRA want restrictions on a technology that could easily displace tens of thousands of writers and actors. Like factory workers in Detroit, they realize they could find themselves in an industry where humans eventually become superfluous or obsolete. Once that happens, the cascading effect will be felt far and wide. Virtual writers and actors won’t need agents or managers. Productions that rely on A.I. won’t need caterers, wardrobe or trailers.

But the stakes are just as high for studios and networks who are relying on technology to give them an economic edge in an increasingly dire landscape.

To put it bluntly, the entertainment industry is stagnating and has been for years. Consumers have less money, which reduces advertising revenue; streaming services aren’t adding many new subscribers, and are even losing some; and inflation keeps pushing production costs higher. Media companies are being squeezed harder than ever to produce profits to keep their stock prices from tanking, and the only way they are able to do that now is by cutting costs.

So it comes as no surprise that the AMPTP has dug in its heels and is prepared to fight a war of attrition. According to one insider, “[t]he endgame is to allow things to drag on until union members start losing their apartments and losing their houses.”

Losing the roofs over their heads? It’s a reality that Three Percenters never contemplated or expected.

On the eve of the strike, SAG-AFTRA president Fran Drescher delivered a fiery rant that’s gone viral. She expressed “shock” at the way “disgusting” media companies are treating their “working class” and warned that “[w]hat’s happening to us is happening across all fields of labor.”

We’ve never heard words like this coming from the mouth of any celebrity:

“Because at some point, the jig is up. You cannot keep being dwindled and marginalized and disrespected and dishonored.”

…

“If we don’t stand tall right now…we are all going to be in trouble. We are all going to be in jeopardy of being replaced by machines…and big business who cares more about Wall Street than you and your family. Most Americans don’t have more than $500 in an emergency.”

You could almost mistake Drescher for Norma Rae (if Norma Rae had been completely clueless about what had been happening to workers outside her factory for decades). You could almost imagine this rant coming from an angry, middle aged white guy who lost his job on the Ford assembly line, or the grocery cashier displaced by self-checkout machines, or the travel agent whose clients now book on Expedia — the people who were desperate enough to vote for a man Drescher likely despises, for the same reasons she’s rallying her troops to action.

Should you shed crocodile tears for writers or actors? Of course not.

Most of these people will land on their feet. Savings will be shaved, a mortgage payment or two may be skipped, vacations will be put on hold. They’ll make up much of what they lost when the AMPTP finally comes to the table with a deal that gives them some (but not all) of what they want. Because Hollywood isn’t Detroit — yet.

But anyone with common sense can see what’s happening and where things are headed. A previously pampered industry is awakening to the reality that it’s being dragged into a class war that it never expected to fight. As the economy continues to contract, relentlessly and irreversibly, the Norma Raes in Hollywood will increase in number. More and more, the rank and file will face the desperation that the rest of America has quietly struggled with for decades. Maybe not today or tomorrow. But sooner than they think.

This week, the U.S. credit rating was downgraded from AAA, which means the cost of borrowing money, and repaying our debt, is going to get higher. More countries are de-tethering from the dollar, which means demand for our currency will slow, leading to higher inflation. You don’t need a masters in economics to know what comes next. Companies will face mounting pressure to cut costs, and Americans from all walks of life will find it harder to make ends meet. She may not be willing to admit it now, but I think Drescher is beginning to realize that her troops and the legion of Trump’s deplorables are both on the losing side of a war that’s squeezing 99.99% of Americans into the swelling class of “have-nots.”

Until now, Drescher and her ilk couldn’t see what they had in common with the people they loathe because elites have armed themselves with the most powerful weapon in this war: propaganda. They own the media and political establishment that pit Americans against each other, relentlessly dividing us into factions based on our politics, our race, our sexual orientation, our gender, and any other “identity” they can use to separate us from one another. Because the one thing the elite class cannot afford in this war is a united front among its victims. They’re absolutely terrified that one day we might awaken to what we have in common, shatter the illusion of division, and focus our attention and anger on the people and institutions responsible for destroying our country and our way of life. Their terror is justified, because that day is coming. It’s just a matter of time.

If you want to learn more about what sustains this illusion and what we can all do to overcome it, check out my book:

Available on Amazon