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The WGA and AMPTP are talking again. Why the studios were motivated to return to the table

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The WGA and AMPTP are talking again. Why the studios were motivated to return to the table

When film and television writers went on strike 108 days ago, most assumed the studios and streamers would hunker down for a long fight.

The companies, many of which are saddled with debt, could save money by cutting costly producer deals and pausing production of movies and TV shows. Industry news outlet Deadline quoted an anonymous executive who suggested that studios were ready to hold out until writers started losing their homes, which stoked outrage on picket lines.

As the negotiations resume, it’s still uncertain how much the Writers Guild of America and the studios are willing to bend to reach a compromise, or what precise shape a deal wouldtake. Sources close to the negotiations say the sides remain far apart on key issues.

But it’s become increasingly clear that the major studios and streamers, represented by the Alliance of Motion Picture and Television Producers, are motivated to end the work stoppages that have roiled Hollywood. The SAG-AFTRA actors’ union joined the WGA by going on strike last month.

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What changed? Several factors have prompted a new sense of urgency, according to interviews with multiple people close to the negotiations who were not authorized to comment.

The actors’ strike dramatically upped the stakes, wreaking havoc on production plans and creating more economic uncertainty for the major companies, including streaming giant Netflix, the Walt Disney Co., Warner Bros. Discovery, Paramount Global and NBCUniversal.

The economic reverberations have been felt throughout the city, with businesses including prop houses and other small firms struggling to make ends meet, prompting politicians such as Los Angeles Mayor Karen Bass to demand an end to the strikes.

“With each day that goes on, the economic damage is further intensified,” said Todd Holmes, associate professor of entertainment media management at Cal State Northridge, who estimated that the economic damage of the dual strikes on California was at least $3 billion so far and that it could balloon to $4 billion to $5 billion if the strikes were to stretch into October.

Media executives, many of whom remember the bruising writers’ strike 15 years ago, have insisted that they never wanted a prolonged fight, for these very reasons. The chief executives also recognized that they needed to be more involved after weeks of little progress.

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Netflix co-Chief Executive Ted Sarandos and Sony Pictures chief Tony Vinciquerra were initially among the most active executives to try to facilitate compromises, but in the last two weeks other leaders, including Universal’s Donna Langley and CBS Chief Executive George Cheeks — have helped to find common ground among the various companies.

Disney Chief Executive Bob Iger has also taken a more active role, along with producer and former studio chief Peter Chernin, who played a prominent role in the previous writers’ strike.

In recent weeks, movie studio executives have grown increasingly worried about the threat to their 2024 release slates. The studios need A-list talent to help them promote their projects, and they need to finish the ones in production. Sony recently pushed back the release of films including “Spider-Man: Beyond the Spider-Verse.”

Most network executives say they have enough reality-type shows and sporting events, including the NFL, college football and Major League Baseball, to take them through the fall. Nonetheless, legacy companies, which rely on advertising revenue, are eager to restart production of scripted programs to slow the decline of ratings and pump the brakes on cord-cutting.

“You don’t want to give the audience more reasons to leave,” said one veteran executive.

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Streamers are also under pressure, but for their own reasons.

Netflix’s Sarandos has advocated for renewing talks, sources say, despite the fact that many writers blame his company for fueling the labor dispute, which some have dubbed the “Netflix strike.”

In many ways, Netflix appeared to be the best positioned to weather the storm, and the least likely to cede to the demands of the Writers Guild. After all, Netflix had indicated that its vast library of movies and shows might help the service withstand the labor disputes better than most.

But Netflix needs fresh content to support its global service, which primarily relies on subscriptions. Without new shows, the company could lose customers to competing services. The strike paused or delayed production on some key shows, including “Stranger Things” and “Cobra Kai.”

Also, the writers’ strike has shined a harsh light on labor tensions Netflix is facing in such countries as Korea, home of the popular series “Squid Game.” Korean artists, including actors and writers such as “Squid Game” creator Hwang Dong-hyuk, are pushing Netflix for more pay for creators — echoing demands of writers marching outside the company’s Sunset Boulevard offices.

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In earnings presentations this year, Sarandos has struck a conciliatory tone, saying he was “super committed” to getting agreements done. Other executives have taken a similar tack to tamp down the rhetoric. Iger, who previously took heat for describing union demands as “not realistic,” more recently told investors that he was “personally committed” to finding solutions to the WGA and SAG-AFTRA strikes.

The alliance that represents the major studios met with the WGA negotiating committee Tuesday, during which the union responded to the companies’ latest proposals. The AMPTP declined to comment. The WGA has not commented on any of specifics of the alliance’s new offer.

Union members such as “The Wire” creator David Simon have warned fellow writers against trusting press leaks from studio sources, calling such disclosures “tactical.”

There has been movement on two major sticking points, sources said, raising hopes that the two sides might finally find a path to a deal.

The WGA has demanded that there be a minimum number of staffing for TV series writers’ rooms. Writers said they have suffered economically as the number of episodes in a season has gotten shorter on streaming services, with fewer writers involved in development.

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Studios have attempted to address that issue in their latest proposal, which indicates a step forward. Variety reported that showrunners would get “significant authority to set the size of the staff,” factoring in a show’s budget. It is not clear, however, that such a system would sufficiently address the WGA’s concerns.

The topic is fraught for studios, in part, because they don’t want writers to set quotas on the number of people the companies must hire. Studio executives said some writer-producers have indicated that they want more flexibility to determine their own staffing needs.

Studio executives say they want a solution that would allow some leeway while providing more opportunities for early-career writers to be more involved in the process to learn what it takes to run a show.

Streamers also have been criticized by actors and writers for not providing enough data to explain how they determine success. Writers are seeking a payment system that would reward them financially in the event that their shows were to succeed. The studios offered to share data on how many hours people watched programs on streaming services, Bloomberg first reported.

Despite glimmers of hope, the strikes drag on.

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Bryan Behar, a writer, executive producer and showrunner on “Fuller House,” posted on social media this week that while a lot of his enthusiasm had gone after 106 days of striking, his “resolve” hadn’t gone away.

“And it won’t,” Behar posted on X, formerly known as Twitter, with a selfie at the Fox lot. “Not until the AMPTP steps up to make a fair deal. Hasn’t happened yet.”

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Cookies, Cocktails and Mushrooms on the Menu as Justices Hear Bank Fraud Case

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Cookies, Cocktails and Mushrooms on the Menu as Justices Hear Bank Fraud Case

In a lively Supreme Court argument on Tuesday that included references to cookies, cocktails and toxic mushrooms, the justices tried to find the line between misleading statements and outright lies in the case of a Chicago politician convicted of making false statements to bank regulators.

The case concerned Patrick Daley Thompson, a former Chicago alderman who is the grandson of one former mayor, Richard J. Daley, and the nephew of another, Richard M. Daley. He conceded that he had misled the regulators but said his statements fell short of the outright falsehoods he said were required to make them criminal.

The justices peppered the lawyers with colorful questions that tried to tease out the difference between false and misleading statements.

Chief Justice John G. Roberts Jr. asked whether a motorist pulled over on suspicion of driving while impaired said something false by stating that he had had one cocktail while omitting that he had also drunk four glasses of wine.

Caroline A. Flynn, a lawyer for the federal government, said that a jury could find the statement to be false because “the officer was asking for a complete account of how much the person had had to drink.”

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Justice Ketanji Brown Jackson asked about a child who admitted to eating three cookies when she had consumed 10.

Ms. Flynn said context mattered.

“If the mom had said, ‘Did you eat all the cookies,’ or ‘how many cookies did you eat,’ and the child says, ‘I ate three cookies’ when she ate 10, that’s a false statement,” Ms. Flynn said. “But, if the mom says, ‘Did you eat any cookies,’ and the child says three, that’s not an understatement in response to a specific numerical inquiry.”

Justice Sonia Sotomayor asked whether it was false to label toxic mushrooms as “a hundred percent natural.” Ms. Flynn did not give a direct response.

The case before the court, Thompson v. United States, No. 23-1095, started when Mr. Thompson took out three loans from Washington Federal Bank for Savings between 2011 and 2014. He used the first, for $110,000, to finance a law firm. He used the next loan, for $20,000, to pay a tax bill. He used the third, for $89,000, to repay a debt to another bank.

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He made a single payment on the loans, for $390 in 2012. The bank, which did not press him for further payments, went under in 2017.

When the Federal Deposit Insurance Corporation and a loan servicer it had hired sought repayment of the loans plus interest, amounting to about $270,000, Mr. Thompson told them he had borrowed $110,000, which was true in a narrow sense but incomplete.

After negotiations, Mr. Thompson in 2018 paid back the principal but not the interest. More than two years later, federal prosecutors charged him with violating a law making it a crime to give “any false statement or report” to influence the F.D.I.C.

He was convicted and ordered to repay the interest, amounting to about $50,000. He served four months in prison.

Chris C. Gair, a lawyer for Mr. Thompson, said his client’s statements were accurate in context, an assertion that met with skepticism. Justice Elena Kagan noted that the jury had found the statements were false and that a ruling in Mr. Thompson’s favor would require a court to rule that no reasonable juror could have come to that conclusion.

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Justices Neil M. Gorsuch and Brett M. Kavanaugh said that issue was not before the court, which had agreed to decide the legal question of whether the federal law, as a general matter, covered misleading statements. Lower courts, they said, could decide whether Mr. Thompson had been properly convicted.

Justice Samuel A. Alito Jr. asked for an example of a misleading statement that was not false. Mr. Gair, who was presenting his first Supreme Court argument, responded by talking about himself.

“If I go back and change my website and say ‘40 years of litigation experience’ and then in bold caps say ‘Supreme Court advocate,’” he said, “that would be, after today, a true statement. It would be misleading to anybody who was thinking about whether to hire me.”

Justice Alito said such a statement was, at most, mildly misleading. But Justice Kagan was impressed.

“Well, it is, though, the humblest answer I’ve ever heard from the Supreme Court podium,” she said, to laughter. “So good show on that one.”

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SEC probes B. Riley loan to founder, deals with franchise group

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SEC probes B. Riley loan to founder, deals with franchise group

B. Riley Financial Inc. received more demands for information from federal regulators about its dealings with now-bankrupt Franchise Group as well as a personal loan for Chairman and co-founder Bryant Riley.

The Los Angeles-based investment firm and Riley each received additional subpoenas in November from the U.S. Securities and Exchange Commission seeking documents and information about Franchise Group, or FRG, the retail company that was once one of its biggest investments before its collapse last year, according to a long-delayed quarterly filing. The agency also wants to know more about Riley’s pledge of B. Riley shares as collateral for a personal loan, the filing shows.

B. Riley previously received SEC subpoenas in July for information about its dealings with ex-FRG chief executive Brian Kahn, part of a long-running probe that has rocked B. Riley and helped push its shares to their lowest in more than a decade. Bryant Riley, who founded the company in 1997 and built it into one of the biggest U.S. investment firms beyond Wall Street, has been forced to sell assets and raise cash to ease creditors’ concerns.

The firm and Riley “are responding to the subpoenas and are fully cooperating with the SEC,” according to the filing. The company said the subpoenas don’t mean the SEC has determined any violations of law have occurred.

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Shares in B. Riley jumped more than 25% in New York trading after the company’s overdue quarterly filing gave investors their first formal look at the firm’s performance in more than half a year. The data included a net loss of more than $435 million for the three months ended June 30. The shares through Monday had plunged more than 80% in the past 12 months, trading for less than $4 each.

B. Riley and Kahn — a longstanding client and friend of Riley’s — teamed up in 2023 to take FRG private in a $2.8-billion deal. The transaction soon came under pressure when Kahn was tagged as an unindicted co-conspirator by authorities in the collapse of an unrelated hedge fund called Prophecy Asset Management, which led to a fraud conviction for one of the fund’s executives.

Kahn has said he didn’t do anything wrong, that he wasn’t aware of any fraud at Prophecy and that he was among those who lost money in the collapse. But federal investigations into his role have spilled over into his dealings with B. Riley and its chairman, who have said internal probes found they “had no involvement with, or knowledge of, any alleged misconduct concerning Mr. Kahn or any of his affiliates.”

FRG filed for Chapter 11 bankruptcy in November, a move that led to hundreds of millions of dollars of losses for B. Riley. The collapse made Riley “personally sick,” he said at the time.

One of the biggest financial problems to arise from the FRG deal was a loan that B. Riley made to Kahn for about $200 million, which was secured against FRG shares. With that company’s collapse into bankruptcy in November wiping out equity holders, the value of the remaining collateral for this debt has now dwindled to only about $2 million, the filing shows.

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Griffin writes for Bloomberg.

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Starbucks Reverses Its Open-Door Policy for Bathroom Use and Lounging

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Starbucks Reverses Its Open-Door Policy for Bathroom Use and Lounging

Starbucks will require people visiting its coffee shops to buy something in order to stay or to use its bathrooms, the company announced in a letter sent to store managers on Monday.

The new policy, outlined in a Code of Conduct, will be enacted later this month and applies to the company’s cafes, patios and bathrooms.

“Implementing a Coffeehouse Code of Conduct is something most retailers already have and is a practical step that helps us prioritize our paying customers who want to sit and enjoy our cafes or need to use the restroom during their visit,” Jaci Anderson, a Starbucks spokeswoman, said in an emailed statement.

Ms. Anderson said that by outlining expectations for customers the company “can create a better environment for everyone.”

The Code of Conduct will be displayed in every store and prohibit behaviors including discrimination, harassment, smoking and panhandling.

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People who violate the rules will be asked to leave the store, and employees may call law enforcement, the policy says.

Before implementation of the new policy begins on Jan. 27, store managers will be given 40 hours to prepare stores and workers, according to the company. There will also be training sessions for staff.

This training time will be used to prepare for other new practices, too, including asking customers if they want their drink to stay or to go and offering unlimited free refills of hot or iced coffee to customers who order a drink to stay.

The changes are part of an attempt by the company to prioritize customers and make the stores more inviting, Sara Trilling, the president of Starbucks North America, said in a letter to store managers.

“We know from customers that access to comfortable seating and a clean, safe environment is critical to the Starbucks experience they love,” she wrote. “We’ve also heard from you, our partners, that there is a need to reset expectations for how our spaces should be used, and who uses them.”

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The changes come as the company responds to declining sales, falling stock prices and grumbling from activist investors. In August, the company appointed a new chief executive, Brian Niccol.

Mr. Niccol outlined changes the company needed to make in a video in October. “We will simplify our overly complex menu, fix our pricing architecture and ensure that every customer feels Starbucks is worth it every single time they visit,” he said.

The new purchase requirement reverses a policy Starbucks instituted in 2018 that said people could use its cafes and bathrooms even if they had not bought something.

The earlier policy was introduced a month after two Black men were arrested in a Philadelphia Starbucks while waiting to meet another man for a business meeting.

Officials said that the men had asked to use the bathroom, but that an employee had refused the request because they had not purchased anything. An employee then called the police, and part of the ensuing encounter was recorded on video and viewed by millions of people online, prompting boycotts and protests.

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In 2022, Howard Schultz, the Starbucks chief executive at the time, said that the company was reconsidering the open-bathroom policy.

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