Title: Potential Strikes by Actors and Writers Threaten Cash Flow in Hollywood
For the first time in over six decades, Hollywood is on the brink of facing simultaneous strikes by two guilds. While the writers have been on strike for the past 10 weeks, actors are now nearing their extended deadline of July 12 to negotiate a new contract with studios.
The ongoing writers’ strike has already caused significant disruption in film and TV production. If actors from the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) also join the picket lines, it could further worsen the turmoil in the entertainment industry.
The anticipation of no cash flow due to halted productions has left Hollywood insiders nervous. A top talent agent stated, There’s going to be no cash flow – they won’t be making anything.
Opinions on the outcome of a combined strike vary. Some believe that it could expedite a resolution to the impasse, while others fear it would prolong the industry’s paralysis.
Adding a new dimension to the situation, SAG-AFTRA, in anticipation of an impending strike, recently agreed with the studios to seek assistance from a federal mediator as a means to find a compromise, without extending their own deadline.
To provide a brief recap, both the Writers Guild of America (WGA) and SAG-AFTRA have been unable to reach new agreements with the Alliance of Motion Picture and Television Producers (AMPTP). Contentious topics include wages, the usage of artificial intelligence, and other issues concerning more than 350 studios, networks, and streamers, including industry giants like Netflix, Disney, and Amazon.
While the writers’ strike began in early May, SAG-AFTRA’s contract extension is set to expire on Wednesday night. Similar to their WGA counterparts, SAG-AFTRA members overwhelmingly voted on June 5 to authorize a strike.
The stakes have risen significantly with the ongoing writers’ strike. The last time writers went on strike in 2007-2008, it lasted for 100 days, leading to the shutdown of over 60 TV shows, a decline in ratings and ad sales, a loss of over 37,700 jobs, and a cost of more than $2 billion to California’s economy.
If actors also join the strike, the landscape, issues, and labor environment will change drastically. However, compared to the mid-2000s, the industry has undergone significant transformation. The rise of streaming services has disrupted the way writers and actors are compensated, while the emergence of generative AI technology has further complicated matters. Additionally, media conglomerates are grappling with mounting debt and struggling to offset declining traditional TV revenues with streaming profits.
Jonathan Handel, an entertainment lawyer with previous experience at the WGA, believes that a combined strike would be a lengthy and arduous battle due to the complex and existential nature of the issues at hand. The labor environment, which is currently experiencing a surge of support from other unions, may provide the necessary strength for both writers and actors to prolong their strike.
On the AMPTP side, disagreements among legacy studios, pure-play streamers, and tech companies could hinder collective action towards resolving the strike.
While companies like NBCUniversal and Disney heavily rely on fall TV seasons to attract viewers and satisfy advertisers, streaming giant Netflix might have a different perspective. As Handel suggests, Netflix would likely be happy to see fall TV collapse.
The previous writers’ strike in 2007-2008 ended after the Directors Guild of America reached its own agreement with the AMPTP, laying the groundwork for a subsequent deal with the WGA. In the past, the imminent Oscars telecast and pressure from industry heavyweights helped expedite the resolution process.
Although the directors have recently struck a new three-year agreement, writers and actors have unique concerns. The WGA is primarily focused on staffing writers’ rooms, while SAG-AFTRA members are more concerned about AI-related issues. With the Oscars several months away and talk of postponing the Emmys, a combined strike could potentially extend into the end of the year.
On a positive note, if SAG-AFTRA joins the WGA on strike, negotiations for both guilds are likely to occur simultaneously, which could lead to more efficient resolution of shared concerns. Media companies heavily reliant on fall TV ad sales may also pressure the rest of the AMPTP membership to find a swift resolution.
High-profile actors actively participating in strikes, coupled with the current wave of union support, could generate positive PR for the striking guilds. This, in turn, might incentivize media companies to expedite the resolution process. Industry stakeholders are hopeful for potential intervention from figures like Disney CEO Bob Iger, who played a key role in ending the 2008 strike.
The situation remains fluid, and external forces such as the Governor of California and even the President of the United States may exert pressure to bring about a resolution. Ultimately, a point will be reached where even streaming companies run out of content, necessitating a deal and the resumption of work within the industry.
