The Film and TV Industries

The International Alliance of Theatrical Stage Employees (IATSE) will vote Friday, Nov. 12, on the proposed Area Standards Agreement (ASA). The 49-page revised contract would increase wages by at least 3% each year, penalize productions for working through meals, enforce 10-hour turnarounds, and lengthen time off over the weekends. Already the terms of the renegotiated agreement have been met with some criticism from workers who believe it falls short when it comes to health plans and residuals.

However, a vote to not ratify would return negotiators of IATSE and the representative of major TV and film companies back to the bargaining table. The threat of a strike still looms as a last-resort option neither party desires.

On the West Coast, film crew workers will vote on a similar contract called the Basic Agreement. Together, both contracts cover approximately 60,000 film and TV workers across the U.S. There are 13 local unions on the West Coast voting on the Basic Agreement and 23 local unions throughout the rest of the U.S., including the IATSE Local 491 in Wilmington, voting on the ASA.

IATSE members cast ballots online starting Nov. 12, similarly to how they cast the strike authorization vote in early October. The results will be shared Monday, Nov. 15.

The strike authorization vote passed overwhelmingly, with almost all members participating and nearly all agreeing to give the IATSE president power to call a work stoppage. The Alliance of Motion Picture and Television Producers (AMPTP) quickly agreed to resume bargaining after the vote, which had beforehand been at an impasse.

The film workers union called off the strike after negotiations wrapped on the Basic Agreement on Oct. 16. It was just days before picketing was expected to commence.

This is the first time in the union’s history that members under the ASA will have a say in finalizing the contract.

“I was told that the role would be a six-year commitment to play a smart, strong leading lady, a confident high-powered lawyer meant to counterbalance the existing male lead, and that the role had been written specifically with me in mind,” Dushku said during the hearing.

“However, in my first week on my new job I found myself the brunt of crude, sexualized, and lewd verbal assaults. I suffered near constant sexual harassment from my co-star. This was beyond anything I had experienced in my 30-year career.”

While she did not refer to her former co-star Michael Weatherly by name, she opened up about specific instances of harassment she experienced working with a lead actor.

Dushku said, “[The lead actor] frequently referred to me as ‘legs.’ He would smell me and leeringly look me up and down. Off script, in front of about 100 crew members and cast members, he once said that he would take me to his rape van and use lube and long phallic things on me and take me over his knee and spank me like a little girl. Another time he told me that his sperm were powerful swimmers.”

In one particular incident Dushku said that her co-star “shouted out that he and his buddy wanted to have a threesome with me and began mock penis jousting while the camera was still rolling. Then, as I walked off to my coffee break between scenes, a random male crew member sidled up to me at the food service table and whispered, ‘I am with Bull. I want to have a threesome with you too, Eliza.’”

Dushku alleges that after speaking to the unnamed co-star about his comments, he told her “no one is more respectful of women than me. I grew up with sisters.” According to Dushku, Weatherly texted the head of CBS Studios that she had a “humor deficit” and that “he didn’t want me on the show.” She was fired the next day.

Due to the arbitration clause in her contract, Dushku was ushered into silence. She testifies the clause “would be used to keep what had happened to me a secret and would protect CBS and the sexual harassment perpetrator who had blatantly retaliated against me for trying to stop the harassment in my workplace.”

According to Deadline, her testimony part of the committee hearing titled “Silenced: How Forced Arbitration Keeps Victims of Sexual Violence and Sexual Harassment in the Shadow.” It’s being held as lawmakers consider new legislation which would eliminate forced arbitration clauses in employment, consumer, and civil rights cases.

The actor stated to members of the House Judiciary Committee that she was able to come forward now as she was responding to a congressional subpoena. “Countless others who are bound by arbitration are not so fortunate,” Dushku said.

In 2018, the New York Times first reported the $9.5 million settlement Dusku was paid by CBS to stay silent about the harassment, which included a non-disclosure agreement. CBS and Weatherly then released their own statement, offering their version of events to the public. Viewing this as a breach of the settlement agreement, Dushku went public with her experience in a op-ed to the Boston Globe.

The Judiciary Committee has scheduled a vote on the bill on Wednesday. Weatherly continues to maintain his role on Bull, which is in the midst of airing its sixth season.

Iger had stunned the world in February of that year by resigning as Disney’s chief executive, effective immediately. He elevated Chapek, whom Iger and the board had long seen internally as the front-runner for the position given his operational experience and decades at the company. Iger would stick around as executive chairman and direct the company’s “creative endeavors” to help with the transition.

The timing of a CEO change at arguably the world’s most famous entertainment company couldn’t have been worse. Just weeks after Iger stepped down, Disney began closing its theme parks around the world during the initial stages of the Covid-19 quarantine.

Iger and Chapek seemed to be ready for the pandemic challenge together.

“I can’t think of a better person to succeed me in this role,” Iger said March 11, 2020, during the company’s annual shareholder meeting, a day before the company closed its parks.

Chapek returned the optimism.

“I’ve watched Bob [Iger] lead this company to amazing new heights, and I’ve learned an enormous amount from that experience,” Chapek said.

One month after those comments, with everyone stuck at home, then-New York Times media columnist Ben Smith published a story after reaching Iger by email. He reported Iger wasn’t going to turn Chapek to the wolves as a brand-new CEO while the world was falling apart. Iger told Smith he would stick around to help run the company.

“A crisis of this magnitude, and its impact on Disney, would necessarily result in my actively helping Bob [Chapek] and the company contend with it, particularly since I ran the company for 15 years!” Iger said in his email.

Chapek was furious when he saw the story, according to three people familiar with the matter. He had not expressed a need or desire for extra help. He wasn’t looking for a white knight. Iger had postponed his retirement as CEO three times already. Chapek felt he was essentially doing it again, leaving him as a hapless second banana, according to people familiar with his thoughts. Chapek was already reporting to Iger, the board’s chairman, anyway.

The Disney board had little interest in starting a brawl, especially given the state of the company and the world, the people said. Three days after Smith’s story was published, Disney accelerated its timeline and named Chapek to its board.

“It was a turning-point moment,” said one of the people familiar with Chapek’s reaction to Iger’s interview with Smith.

Since that incident, Iger and Chapek haven’t been able to mend their relationship, according to about a dozen people familiar with the matter who spoke with CNBC for this story. The people asked to remain anonymous because the relationship and discussions about it are private.

In the months that followed, Chapek began making key decisions about Disney’s future — including a dramatic reorganization of the company and outing actress Scarlett Johansson’s salary following a dispute over her Marvel movie “Black Widow” — without Iger’s input. Internal messages about business strategy from both men would sometimes conflict, as it became clear the executives weren’t speaking with one voice, several people noted.

While much of the public narrative has centered around Iger’s “long goodbye” — he departed as chairman in January — Chapek, 61, has actually been firmly in control of Disney for more than 18 months.

Normal times would have allowed Iger and Chapek to work more closely. Instead, the two executives barely spoke to each other. Chapek has a small circle of close confidants with whom he makes major decisions — longtime right-hand man Kareem Daniel, chief of staff Arthur Bochner, and, to some degree, Chief Financial Officer Christine Mc Carthy, whom Iger promoted to the role in 2015, according to people familiar with the matter.

Iger hasn’t been part of that circle.

In December, just days before his departure as executive chairman, Iger threw himself a going-away party, inviting more than 50 people at his house in Brentwood, a suburban Los Angeles neighborhood. He spoke at length about his time at Disney in front of the crowd. Chapek attended, but there was little interaction between the two men, according to people who attended the party. Guests — including veteran Disney executives and on-camera talent, such as broadcasters Robin Roberts, David Muir and Al Michaels — sat at two long tables at Iger’s house.

Iger and Chapek sat at opposite tables. Chapek sat near several of his direct reports, including Daniel. Iger sat next to film director and mogul Steven Spielberg. While Iger spent about 10 minutes publicly praising former colleagues, he barely mentioned Chapek, said the people.

“It was extremely awkward,” said one of the guests, who asked to remain anonymous because the party was private. “The tension was palpable.”

Both Iger and Chapek declined to comment on their relationship with each other.

Iger’s shadow

Chapek’s decision to move away from Iger showed chutzpah, but it also put him on an island against a Disney icon, who also happened to be the chairman of his company and a large shareholder. He also hasn’t been able to benefit from the myriad relationships Iger developed from decades at Disney.

Anyone succeeding Iger, who had been Disney’s CEO since 2005, was going to have a difficult time filling his shoes. Iger was generally beloved by Hollywood and highly respected as a CEO, particularly after orchestrating a series of intellectual property acquisitions — of Pixar, Marvel and Lucasfilm — which will likely go down in media history as three of the smartest deals ever. Iger, 71, has even flirted with running for president of the United States.

Chapek, meanwhile, has a harder exterior and at times, according to colleagues, struggles with emotional intelligence — which happens to be Iger’s strength.

The differences between the executives’ leadership styles have come to light quickly in Chapek’s tenure.

Disney’s public spat last year with Johansson over compensation after “Black Widow” streamed on Disney+ at the same time it hit theaters during the pandemic embarrassed Iger, who prided himself on smooth relationships with A-list talent. While the controversy happened under Chapek’s watch as CEO, Iger was still chairman and working with creative talent.

This month, Chapek’s public acknowledgement that he let Disney employees down by not fighting harder against Florida’s “Don’t Say Gay” legislation has been another reminder to Iger loyalists that Disney’s brand may be at risk with Chapek at the helm. Weeks before, Iger took a public stance against the legislation.

The messy execution has angered Disney employees. Deadline reported it spoke with several longtime Disney employees who said Chapek’s handling of the situation led to “the worst week they’ve ever had working at the company.” Several Disney employees have called Iger in recent weeks to express their disappointment in Chapek, according to two people familiar with the matter. Chapek met with creative leaders at Disney earlier this month to hear their concerns about his response to the bill, CNBC previously reported.

Perhaps the biggest division between Chapek and Iger was a more mundane one — Chapek’s decision to remove so-called profit-and-loss, or P&L, power from many of Disney’s veteran division leaders and consolidate all of that control under Daniel.

While public controversies generate headlines, it’s likely to be Chapek’s internal changes, and how successful they become, that will determine his future as Disney’s CEO.

Centralizing Disney leadership

In October 2020, about eight months after he took over as CEO, Chapek announced Disney was strategically reorganizing its media and entertainment businesses. This was Disney’s second major reorganization in less than three years. The key part of the announcement was the following:

“The new Media and Entertainment Distribution group will be responsible for all monetization of content —both distribution and ad sales — and will oversee operations of the Company’s streaming services. It will also have sole P&L accountability for Disney’s media and entertainment businesses.”

Those two sentences upended how Disney has done business for decades. The change gave Daniel, the leader of the new Media and Entertainment Distribution group, called DMED internally, one of the most important jobs in the history of media. The decision was instantly polarizing, leading to a burst of internal frustration among some veteran Disney employees who no longer controlled the budgets of their divisions, according to people familiar with the matter.

Chapek wants to streamline Disney so content decisions across distribution platforms can be made in synchrony. Instead of division heads running their own fiefdoms, Chapek and Daniel can steer Disney by controlling the budgets of each group and deciding where content ends up — streaming or cable or broadcast or movie theaters. Executives can then focus on making content, or selling ads, or building streaming technology, with direction from Chapek and Daniel. Historically, the heads of Disney TV or ESPN or Hulu or film would run their entire businesses.

Conceptually, Chapek’s idea actually isn’t all that different from what Iger had begun to put in place with the organization of Disney+. In early 2018, Iger met with Robert Kyncl, chief business officer at Google’s You Tube, according to people familiar with the meeting. Before Google, Kyncl had worked for seven years at Netflix, overseeing content partnerships.

Kyncl told Iger if he wanted Disney to start trading at Netflix-like multiples — which were, at the time, orders of magnitude higher than Disney’s — Iger needed to run operations like a technology company. Google separated its content and distribution divisions. The same roles didn’t live within smaller groups, the way Disney had been structured for years.

Kyncl declined to comment to CNBC about the meeting.

If Disney wanted investors to see its burgeoning streaming service as the growth engine in a digital-first world, Iger realized he needed to centralize power around Disney+. According to two people familiar with the meeting, Iger urgently asked then-Disney head of strategy Kevin Mayer to return from the Consumer Electronics Show in Las Vegas so Iger could show him a new organizational structure, which he drew on a whiteboard in front of Mayer. Mayer would become the head of Disney’s new direct-to-consumer unit, in charge of the company’s streaming platforms: Disney+, Hulu and ESPN+. Disney officially reorganized in March 2018.

Power struggles followed. Mayer and Disney TV studio head Peter Rice fought about who had the authority to decide which shows aired on Disney+. Rice’s principal issue was that content executives could no longer have direct conversations with Hollywood talent and tell them whether Disney would make their show or not. Rice feared losing greenlight power would affect Disney’s relationship with Hollywood. If studio executives didn’t have the power to approve projects, they’d quickly lose credibility with creators, who would want to speak with the people at Disney who possessed that authority.

Iger had to solve the disputes by making control decisions on the fly. Mayer won the main argument — he would have greenlight power for Disney+. Mayer left Disney in 2020 to become Tik Tok’s CEO, months after Iger chose Chapek as CEO.

Mayer and Rice declined to comment for this story.

While Chapek didn’t consult Iger about his October 2020 reorganization, he did cite many of the same principles that Kyncl and Iger discussed in 2018.

“Managing content creation distinct from distribution will allow us to be more effective and nimble in making the content consumers want most, delivered in the way they prefer to consume it,” Chapek said in a statement announcing the changes.

When he became CEO, Chapek went on a listening tour of executives to find out what was working and what wasn’t. He heard from both distribution and content executives that the current arrangement had become dysfunctional.

Chapek decided to reverse Iger’s decision to have greenlighting authority rest with the head of the streaming services. He gave that power back to content heads, who have more money than ever before to make programming — Disney plans to spend a record $33 billion on content for fiscal 2022. That’s largely pleased Disney’s content leaders, who can now tell creators directly whether Disney will work with them, according to people familiar with the matter.

But with Daniel getting P&L control, long-term Disney executives also lost the ability to run the businesses of their own divisions. Some creative leaders didn’t mind, preferring to focus on making content rather than selling advertising or working on wholesale distribution agreements with pay-TV providers. Others didn’t appreciate their loss of control over budgets.

Kelly Campbell’s decision to leave her job running Hulu to lead NBC Universal’s Peacock in October was at least partially motivated by her desire to have more control over a business than what Disney allowed her, according to a person familiar with her thinking.

Campbell declined to comment for this story.

One film executive told CNBC that Disney operated smoothly when Alan Bergman, chairman of Disney Studios, and Alan Horn, former chief creative officer of Disney Studios, were in charge of the studio’s P&L. Film producers knew standard facts, such as a movie’s marketing budget or a film’s release date. In the new world, with Daniel in charge, it’s much harder to find out answers because the creative point people simply don’t know, the person said.

Others saw Chapek’s restructuring as simply pushing the envelope on a trend Iger already started —making it clear to Wall Street that streaming was the company’s new priority. By putting Daniel in charge of a variety of different budgets, Chapek could more easily steer all of Disney in the same direction. Decisions could be made more quickly.

This month, Disney put its new Pixar movie “Turning Red” directly on Disney+ instead of in theaters first. That decision would have taken “months” under Iger’s structure, with division heads flexing their power and knowledge of the market, according to three people who participated in the discussions. Instead, the debate took weeks, with Pixar executives ultimately agreeing that the movie should go to Disney+ first, the people said. “Turning Red” is the No. 1 film premiere on Disney+ globally to date, based on number of hours watched in the first three days.

As with any corporate reorganization, the proof will be in the results. Disney has a target of 230 million to 260 million global Disney+ subscribers by the end of 2024, compared with about 130 million Disney+ subscribers today. If Disney can get there, Chapek and Daniel can claim success — assuming they also revive the company’s shares, which have fallen about 30% in the past 52 weeks, even as crowds have returned to Disney’s theme parks around the world.

Kareem Daniel

Daniel’s P&L oversight for all movie, TV and film distribution, advertising, sales, technology and other divisions — jobs that used to be done by a cadre of Disney employees with 20 or 30 years experience each — gives him one of the most powerful jobs ever created in media. Disney’s fiscal 2021 revenue topped $67 billion and has a market capitalization of about $240 billion. Disney routinely outspends all other global companies by billions of dollars a year on entertainment content.

Iger never agreed with giving Daniel so much control. The former CEO felt stripping division heads of their budget control wasn’t the right structure for Disney because the company was too diverse and complex.

Daniel is a polarizing figure among colleagues who have worked with him.

He’s described by five former and current co-workers as smart, hard-working and gregarious. He studied electrical engineering and got an MBA from Stanford. He’ll slap people’s backs and is fun to engage with outside of work, three of the people said. He’s demanding of his direct reports and holds them accountable, the people said.

Daniel is Black, an extreme rarity among the primary leaders of global media companies. He’s the first Black senior executive ever to report directly to the Disney CEO in the history of the company. That carries weight with certain employees, who respect the symbolism of a minority leader in such a high-profile role.

Like Chapek, Daniel has worked in a variety of Disney units, including studio distribution, consumer products, games and publishing, Walt Disney Imagineering, and corporate strategy. He’s been close to Chapek for two decades, first working for him as an MBA intern in 2002. When Daniel moved to corporate strategy, he again worked with Chapek on a variety of projects in 2007 and 2008. He worked under Chapek in distribution for Walt Disney Studios in 2009, when he was part of the M&A team that bought Marvel Entertainment, before following him to consumer products in 2011.

Chapek was particularly impressed with Daniel’s consumer focus when the two worked together to shorten the theatrical window from four months to three months at the end of 2009, according to a person familiar with the matter.

But some of the same people who note Daniel’s strengths also told CNBC the job may be too big for him — or almost anyone.

“He arguably has the most important job at Walt Disney, outside of CEO, and he has almost no experience running any of these businesses that were previously run by people that had decades of experience,” said one former coworker.

Chapek disagrees with that assessment, according to a person familiar with his thinking. He understands the job is massive in scope but feels that Daniel is suited to handle it given his varied experiences at Disney, including as president of consumer products, games and publishing, and president of operations at Walt Disney Imagineering.

Since his promotion announcement in October 2020, Daniel hasn’t done any published or televised interviews. He declined to comment for this story.

‘One Disney’

Ideally, Chapek would like consumers to experience a more unified digital Disney experience, whether it’s logging into Disney+ or buying merchandise from the online Disney store or managing theme park experiences with Disney’s Genie service, which is a kind of digital concierge. Internally, some employees informally speak of this grand challenge of unifying Disney technology and experiences as “One Disney.”

Chapek and Daniel want to hasten the pace of Disney’s digital transformation. In January, Chapek established company goals to “set the stage for our second century, and ensure Disney’s next 100 years are as successful as our first.” Two of the main themes were breaking down silos and innovation.

Disney, by nature and history, isn’t a technology company, even though it’s trying to restructure itself to be like one. In general, its employees don’t have the same type of technological know-how that you’d find at Apple and Google.

That’s problematic for a company that wants to trade at a technology-like multiple. According to a person familiar with the matter, Disney has struggled to build back-end technology to sell advertising on all of its streaming services — Hulu, Disney+ and ESPN+ — and traditional distribution channels. Disney+ and ESPN+ run on streaming infrastructure from BAM Tech, a spin-off of MLB Advanced Media that Disney bought in 2017. Hulu has its own separate infrastructure.

Chapek and Daniel are still trying to streamline the organizational structure. Disney hires people dedicated to marketing or selling ads for its streaming services, ESPN, ABC and Disney’s entertainment cable networks, including some from its acquisition of 21st Century Fox. Those jobs can be duplicative and work against a “One Disney” experience.

Chapek has several times mentioned Disney building its own metaverse, although he hasn’t gone into detail about what exactly that means. Last month, Chapek promoted veteran executive Mike White to be Disney’s senior vice president in charge of “next generation storytelling.” In a memo seen by CNBC last month, Chapek said White’s goal will be “connecting the physical and digital worlds” around Disney entertainment.

Chapek will also have to decide what to do with Disney’s current assets. Some media analysts, such as Light Shed’s Rich Greenfield, have argued Disney would be best off spinning out ESPN and combining it with a digital sportsbook. But that hasn’t been Chapek’s priority. ESPN relies on traditional TV affiliate fees, and it may not be strategically aligned with Disney’s direct-to-consumer ambitions, but the company has no plans to spin off or sell the sports network, said people familiar with the matter. ESPN has considered licensing its name to sports betting companies, but Disney isn’t interested in buying one, the people said.

Chapek will need time to show his own employees and shareholders that he can be trusted to accomplish goals he lays out. Nearly everyone interviewed for this story said that while Chapek may not be a “people person,” he’s a skilled and determined operator. Disney’s fiscal first-quarter results blew away analyst estimates on earnings per share, revenue and total Disney+ subscribers.

Several current Disney executives noted that Chapek’s No. 1 priority — setting up Disney for a digital world where streaming dominates and legacy distribution models fade away — is exactly what Iger believed in. That adds an element of sorrow to the men’s failed relationship. Their end goals are the same.

It’s possible Disney employees and the broader media and entertainment world simply get used to Chapek’s method of leadership with time. Chapek clearly isn’t Iger, but perhaps his biggest challenge will be convincing everyone it’s OK not to be.

Chapek’s contract is up at the end of February 2023.

Iger regrets how the change of control has transpired, one person said. But he’s also not returning to Disney, he told Kara Swisher in a January interview.

“I was CEO for a long time,” Iger said. “You can’t go home again. I’m gone.”

More than eight months after the Rust tragedy put a spotlight on gun safety on set — especially at the lower-budget level — there’s increased awareness, but real change has been limited and halting. What modest shifts are detectable appear to be propelled by the newfound liability concerns of business affairs departments at the studio level. And as outrage subsides, reform legislation is stalled or abandoned.

The Hollywood Reporter reached out to many of the industry’s leading armorers about how their day-to-day work on productions has been affected since Alec Baldwin fatally shot cinematographer Halyna Hutchins on the movie he starred in and produced. Perhaps wary of the stigma surrounding Rust, most were reluctant to speak on the topic at all. But one trend emerged in multiple interviews: an increased adoption of Airsoft guns — which are replicas that don’t use gunpowder and shoot projectiles with vastly lower muzzle energy — in lieu of firearms retrofitted for blanks. When Airsoft guns are used, they’re augmented with visual effects, including smoke and muzzle flashes (typically the case when firearms are used, too)...

Oftentimes, Airsofts are used in conjunction with firearms. For example, Fast X — the big gun-centric movie currently in production from Universal — incorporates Airsofts but still uses firearms for some scenes and performances.

Carpenter notes an irony — it’s studio and network lawyers who are driving the change: “Guess who’s still doing it the same way [using blanks]? The little productions. They’re the ones who are probably going to have the safety issue. The bigger ones figure, I would assume, that there’s more to lose.” As evidence that the larger productions are paying more attention to the use of firearms, even if for liability, Carpenter says he was pleasantly surprised when he recently showed up for a day of work on AMC’s Interview With a Vampire and the call sheet prominently featured a notation that there was a “licensed and accredited armorer on set.” This was, Carpenter explains, “the first time I’d ever seen it, and I’ve worked on a lot of shows.”

Bruce Wentzel of South Africa’s Hire Arms, which has been responsible for weapons on the likes of Hotel Rwanda and The Interpreter, agrees that there’s been a shift toward Airsoft. “We have a couple of jobs out here where they’re now going to do everything digitally because of safety concerns; everybody’s noticing a drop-off.” He’s left wondering if his niche is in danger. “People like myself — who have many, many millions invested in historically correct pieces, and pieces being converted to blanks — are thinking, ‘Well, [if] this is going to be the future, what’s the point?’” ...

Beyond creative approaches such as these, the ability to regulate gun use through legislation hasn’t made strides. In mid-May, two competing California bills — one backed by industry trade group the Motion Picture Association, the other by several industry unions including SAG-AFTRA, the Directors Guild and several IATSE Locals — were killed in a state senate committee when both parties failed to reach a compromise on a unified approach. One bill, SB 829, sought to tackle firearm regulations specifically, while SB 831 took a more sweeping approach to set safety, seeking to install an independent “set safety supervisor” who could pause productions autonomously to address concerns.

Sen. Anthony Portantino, the author of the MPA-backed SB 829, chairs the committee where the two bills stalled and made the decision to hold them up. He says both sides have continued talking, and he doesn’t believe they’re “that far apart,” but that “they need to come up with a compromise solution” for legislation to move forward. “I’m challenging both sides to do the right thing,” he says.

It’s pretty well known and even darkly joked about across all the visual-effects houses that working on Marvel shows is really hard. When I worked on one movie, it was almost six months of overtime every day. I was working seven days a week, averaging 64 hours a week on a good week. Marvel genuinely works you really hard. I’ve had co-workers sit next to me, break down, and start crying. I’ve had people having anxiety attacks on the phone.

The studio has a lot of power over the effects houses, just because it has so many blockbuster movies coming out one after the other. If you upset Marvel in any way, there’s a very high chance you’re not going to get those projects in the future. So the effects houses are trying to bend over backward to keep Marvel happy.

To get work, the houses bid on a project; they are all trying to come in right under one another’s bids. With Marvel, the bids will typically come in quite a bit under, and Marvel is happy with that relationship, because it saves it money. But what ends up happening is that all Marvel projects tend to be understaffed. Where I would usually have a team of ten VFX artists on a non-Marvel movie, on one Marvel movie, I got two including myself. So every person is doing more work than they need to.

The other thing with Marvel is it’s famous for asking for lots of changes throughout the process. So you’re already overworked, but then Marvel’s asking for regular changes way in excess of what any other client does. And some of those changes are really major. Maybe a month or two before a movie comes out, Marvel will have us change the entire third act. It has really tight turnaround times. So yeah, it’s just not a great situation all around. One visual-effects house could not finish the number of shots and reshoots Marvel was asking for in time, so Marvel had to give my studio the work. Ever since, that house has effectively been blacklisted from getting Marvel work.

Part of the problem comes from the MCU itself — just the sheer number of movies it has. It sets dates, and it’s very inflexible on those dates; yet it’s quite willing to do reshoots and big changes very close to the dates without shifting them up or down. This is not a new dynamic.

I remember going to a presentation by one of the other VFX houses about an early MCU movie, and people were talking about how they were getting “pixel-fucked.” That’s a term we use in the industry when the client will nitpick over every little pixel. Even if you never notice it. A client might say, “This is not exactly what I want,” and you keep working at it. But they have no idea what they want. So they’ll be like, “Can you just try this? Can you just try that?” They’ll want you to change an entire setting, an entire environment, pretty late in a movie.

The main problem is most of Marvel’s directors aren’t familiar with working with visual effects. A lot of them have just done little indies at the Sundance Film Festival and have never worked with VFX. They don’t know how to visualize something that’s not there yet, that’s not on set with them. So Marvel often starts asking for what we call “final renders.” As we’re working through a movie, we’ll send work-in-progress images that are not pretty but show where we’re at. Marvel often asks for them to be delivered at a much higher quality very early on, and that takes a lot of time. Marvel does that because its directors don’t know how to look at the rough images early on and make judgment calls. But that is the way the industry has to work. You can’t show something super pretty when the basics are still being fleshed out.

The other issue is, when we’re in postproduction, we don’t have a director of photography involved. So we’re coming up with the shots a lot of the time. It causes a lot of incongruity. A good example of what happens in these scenarios is the battle scene at the end of Black Panther. The physics are completely off. Suddenly, the characters are jumping around, doing all these crazy moves like action figures in space. Suddenly, the camera is doing these motions that haven’t happened in the rest of the movie. It all looks a bit cartoony. It has broken the visual language of the film.

Things need to change on two ends of the spectrum. Marvel needs to train its directors on working with visual effects and have a better vision out of the gate. The studio needs to hold its directors’ feet to the fire more to commit to what they want. The other thing is unionization. There is a growing movement to do that, because it would help make sure that the VFX houses can’t take bids without having to consider what the impacts would be. Because a lot of the time, it’s like, you get to work on a Marvel show, and you’ll work on that for cheaper just because it’s cool.

Some of the problems I mentioned are universal to every show and every project. But you end up doing less overtime on other shows. You end up being able to push back more on the directors. When they say something like, “Hey, I want this,” you can be like, “This doesn’t make sense.” Not every client has the bullying power of Marvel.

Months before the Justice Department blessed the $43 billion Warner Bros. Discovery merger, 30 members of Congress warned the agency in a letter that the resulting competition vacuum could allow the newly formed giant to ignore what consumers want. Among the antitrust concerns they pressed was that it could dampen diverse and inclusive programming — which has become a common criticism after WBD canned its $90 million HBO Max film Batgirl, the first DC movie led by a Latina, Leslie Grace.

“There’s been no indication with Batgirl that they’ll shop it around,” Rep. Joaquin Castro, D-Texas, tells The Hollywood Reporter. “So this incredibly gifted Latina actress and wonderful story get thrown down the drain for a tax write-off.”

In the four months since the deal closed, CEO David Zaslav has overhauled the entertainment powerhouse. During an Aug. 4 earnings call, he trumpeted a 10-year plan for DC and a “reset” that involved shelving Batgirl — part of a cost-savings push and pivot back to creating projects for theaters. “It’s not about how much,” said Zaslav, speaking of their content offerings. “It’s about how good.”

The message was clear: Batgirl doesn’t live up to Warners’ new standards for theatrical releases and has no place in its streaming plans. (Blue Beetle, starring Xolo Maridueña as DC’s first Latino superhero, in December was scheduled for an August 2023 theatrical release after initially being destined for HBO Max.) So far, WBD has taken an $825 million write-down on content — axing projects like Scoob!: Holiday Haunt, Wonder Twins and J.J. Abrams’ big-budget sci-fi drama Demimonde — to help pay off $50 billion-plus in debt it racked up to complete the deal.

Experts question if these moves indicate that the newly-merged company has too much market power under antitrust laws, which seek to promote innovation, choice and product variety. Merger enforcers consider if a deal will incentivize a company to “withdraw a product that a significant number of customers strongly prefer,” according to the DOJ and FTC guidelines. “You have to ask if this combined entity has sufficient market share to act unilaterally with respect to the traditional parameters of competition, like pricing and output,” says USC law professor Jonathan Barnett. “You’d be concerned by some of the post-closing actions.”

Castro agrees that the company’s plans to slash spending on content raises antitrust issues, observing that there’s “already been large cuts throughout the company and they’re anticipating more.” He also notes that the prospect of having a long-labored project killed for tax purposes will scare off talent. “I don’t know if that was the best way for David Zaslav and his new team to introduce themselves to Hollywood,” he says. “I don’t see people wanting to do business with them.”

WBD’s reputation with creators and viewers has indeed taken a hit. “It’s hard not to feel like this is a pattern,” says Gordita Chronicles showrunner Brig Muñoz-Liebowitz. Her HBO Max series about a 12-year-old Dominican girl (Oliva Goncalves) in 1980s Miami adjusting to life in the U.S. was also canceled — despite critical acclaim and popularity. The series was the seventh-most-watched comedy among all comedies released in 2022, according to analytics shop Whip Media. Muñoz-Liebowitz adds, “I would think they’d want to grandfather the commitments they made into their future decision-making and not alienate the consumers they have.”

WBD, which declined to comment for this story, said the move was inspired by a strategic shift away from live-action kids and family programming — though the show isn’t listed under the “family” category on HBO Max, only “Latino.”

With the decisions to shelve Batgirl and pass on a second season of Gordita Chronicles, Warner Bros. Discovery may be glossing over the significance of the Latinx community — a group that is drastically underrepresented in Hollywood. Even though Latinos make up about 19 percent of the country, they account for only 6 percent of roles, according to a 2021 UCLA diversity report. “The new Warner Bros. Discovery leadership is relying on formulas and cost-saving measures that have historically excluded marginalized communities,” says Rafael Agustín, CEO of the Latino Film Institute. “They assume they are doing everything right for their bottom line, not realizing how badly not investing in diversity and inclusion today is going to hurt their business in the future.”

HBO Max’s offerings have been as well known for their cultural diversity as for their quality and ambition. Some of the streamer’s stickiest content has been facilitated through partnerships with Japanese animation house Studio Ghibli and Crunchyroll, which specializes in anime distribution. (HBO’s licensing deal with Crunchyroll expired in January.) But the goodwill and competitive edge garnered from embracing a wide collection of titles across several genres, like Insecure, A Black Lady Sketch Show and Studio Ghibli’s Spirited Away, may now be eroding. “It seems like self-harm, to be honest,” Muñoz-Liebowitz observes. “Say you were a fast-food restaurant and you have a really popular menu item. When you’re bought by another company, would you get rid of the item? It doesn’t make sense to get rid of something popular just because you’re making a business change.”

In addition to content itself, another indicator of whether Warner Bros. Discovery is running afoul of the merger guidelines is what the newly merged entity ends up charging for a combined HBO Max/Discovery+ service when it launches in 2023. Under antitrust law, an acquisition’s effect on price is the heaviest factor in weighing a merger. It’s worth looking at the aftermath of AT&T’s purchase of Warner Media before the Texas phone giant gave up on its entertainment ambitions. Less than two years following the Justice Department’s unsuccessful effort to block the deal — the agency’s first challenge to a vertical merger in 40 years — AT&T raised Direc TV prices even though it promised during its legal battle to lower post-merger bills.

HBO Max is among the most expensive streaming platforms at $14.99 monthly, and it remains to be seen how much appetite there is among consumers for a price hike to add Discovery+ offerings. There may not be much overlap in the demand for content across the two platforms. The company said itself during its quarterly earnings call that HBO Max skews male, specializes in scripted content and appointment viewing, and is the “home of fandoms,” while Discovery+ skews female, focuses on unscripted programming and comfort viewing, and is the “home of genredoms.” Viewers may revolt if Zaslav is misinterpreting the synergies offered by the marriage of HBO Max and Discovery+ into a single service. “When there’s consolidation and only a few companies are controlling the market, they become more monopolistic,” Castro says. “There’s a greater chance they’ll be able to raise prices on consumers and limit selection.”