Studios and Streamers May Terminate First Look & Overall Deals With Writers

As the WGA strike rages on, major Hollywood studios and streaming platforms that have been struck by the work stoppage may look to sever their ties with many creatives altogether. A new report from Variety based on over half-a-dozen anonymous sources knowledgeable on the inner workings of these companies says that they may be planning to invoke force majeure clauses on the first look and overall deals they’ve inked with writers in order to terminate them. This process could begin as soon as August 1 with the vast majority of deals in danger being on the television side.

A force majeure clause, or “act of God” clause, allows for deals between writers and studios to be torn up due to unforeseen circumstances that prevent the writer from filling their obligations. With the writer strike approaching the 90th day which is traditionally when the option to terminate contracts kicks in, next week could see many of these deals start to be killed as a drastic measure. The move would take away a financial safety net for a lot of writers even though it hardly matters financially to studios considering their deals are currently suspended anyway.

Granted, ending these contracts en masse isn’t new when it comes to industry labor strikes. In fact, the last strike in 2007-2008 saw a similar scenario where many writers’ deals were ripped up as soon as it was possible. Streaming, however has made things a lot more complicated as studios have increasingly looked to lock down creatives with overall deals which fund their projects under their studio or first-look deals that give that particular studio or streamer priority when it comes to their new projects. A lot of bigger overall deals, like Netflix’s colossal deal to lock up Ryan Murphy, Shonda Rhimes‘ massive pact with the streamer, or M. Night Shyamalan‘s first look deal with Warner Bros., have protections against force majeure to prevent studios from cherry-picking what to terminate. The middle class of writers isn’t so lucky, and the vast majority of smaller deals are likely to end should studios take this path.

Hollywood Would Face a Messy Path With Mass Deal Terminations

Even if it’s unlikely creators on the level of Rhimes and Murphy will see their contracts ended, it’ll mean another black eye in the public relations space if they terminate any deals at all. Again, the money they would save is negligible because many deals are already suspended. On top of that, they risk losing writers, producers, and showrunners to their closest rivals if they kill their deals. Legal issues would also be in play in this case. “They have a legal problem unless you’re gonna force majeure all the deals” argued David Goodman, co-chair of the WGA negotiating committee, in an interview with Variety. They have very few good reasons to go through with this other than to further stack pressure on writers.

Cruelty has been the name of the game for major studios and streaming platforms regardless of whether it makes sense. Anonymous executives outright admitted in a much-publicized report that the goal of the strike was to bleed out the striking workers. Disney CEO Bob Iger also had no qualms going on about how unreasonable and “very disturbing” it is for writers and actors to ask for fair pay and working conditions. Rather than coming to the negotiating table, these studios are opening up new AI-focused jobs that could expedite the process of removing the human element from content.

Stay tuned here at Collider for more on whether the studios will go through with force majeure deal terminations. With the dual strike still going, read our detailed write-ups on the WGA and SAG-AFTRA strike for more on what each one means for you.