In May, when 11,500 film and television writers went on strike, Hollywood companies like Netflix, NBCUniversal and Disney responded with what amounted to a shrug. The exit wasn’t great, but executives had been waiting for it for months. They could ride it out.
The angry response from Hollywood’s corporate ranks when actors walked out on Friday was dramatically different. What started as a nuisance turned into a crisis.
To begin with, the actors’ union is much more powerful than the writers’ guild, with a membership of approximately 160,000 that includes world-famous celebrities trained in the art of delivering messages to a captivated audience. The film and television scripts that studios had banked in case of a writers’ strike suddenly became inert, bereft of actors to bring them to life. Many big-budget movies that were shot had to shut down immediately, including “Twisters,” “Venom 3,” “Deadpool 3,” and “Gladiator 2.”
In interviews, three studio chairs, who spoke on condition of anonymity because of the sensitivity of the labor situation, said Hollywood’s content factories could sit idle for a little more than a month — roughly until Labor Day — until there is a significant impact on the release. calendar for 2024, especially for movies. A work stoppage that stretches into September could force studios to delay big projects for next year by six months, making 2024 resemble the ghost town of recent memory started by the Covid-19 pandemic.
Studios just got the release schedule looking normal again, with one big movie following another. Another significant break in offerings can be devastating for theaters. This year’s box office has already been lackluster and, with striking actors barred from promotional efforts, films slated for the second half of 2023 could be affected – especially those with awards aspirations. One of the studio officials on Friday predicted that it could endanger at least one of the national cinema chains.
Bobbie Bagby Ford, the chief creative officer and executive vice president of B&B Theatresmid-sized chain with more than 50 locations in 14 states, said the strikes “impacted the industry at a difficult time.”
“The length of the ongoing strike will play a major role in its impact on cinemas,” Ms Bagby Ford said. “If it remains short enough to prevent an overwhelming backlog of films, the situation can be managed.”
Greg Marcus, chief executive of the Marcus Corporation – which owns the fourth largest theater chain in the country – agreed that the strikes were worrying but said they were less of a threat to the industry than the pandemic.
“Depending on the length of time, there could be a gap in a year,” Mr. Marcus said. “But it’s not like being closed for months on end, people debating the value of theater, and then big gaps due to production delays.”
Labor Day will arrive soon, which would seem to encourage studios to break the deadlock with the actors sooner rather than later. But there’s a problem: Studio executives were genuinely surprised by the reaction of the Screen Actors Guild to their proposed terms. They felt they had made significant concessions and were stunned by the union’s rhetoric, especially since they could amicably negotiate a lucrative one. new contract in 2020.
The proposed terms included increased pay, protections around the audition process and more favorable conditions for pension and health contributions. They also offered that dancers get an on-camera rate for rehearsal days.
In particular, the studios – acknowledging in private conversations that they made a mistake by largely ignoring the writers’ demands for guardrails around artificial intelligence – proposed terms for use of AI that their negotiators said would protect actors.
But it was not enough to avoid a strike. Duncan Crabtree-Ireland, the actors’ chief negotiator, said in an interview on Saturday that the studio’s offer was unreasonable. The terms of artificial intelligence endanger “the whole field of acting”, Mr Crabtree-Ireland said, adding that studios also did not offer actors a lucrative participation in streaming.
“Those are the core issues,” Mr Crabtree-Ireland said. “And the fact that the companies will not move them reflects a colonial attitude towards the workers who are the whole basis of the existence of their companies.” He said actors want to start bargaining again.
The Alliance of Film and Television Producers, which negotiates on behalf of the studios, disputed Mr Crabtree-Ireland’s characterization of its members’ attitudes, citing terms of its proposal including “a pioneering AI proposal that protects digital likenesses of actors. “
The frustration on the other side of the negotiating table was made evident by comments made Thursday by Robert A. Iger, the chief executive of Disney, who said during an interview on CNBC that workers are being “unrealistic.” Adding fuel to the fire was an article on the show business website Deadline, which quoted an anonymous studio official as threatening to “bleed out” writers until they “start losing their apartments.” The studio alliance said the anonymous executive did not speak for its members.
Although some executives see a short shutdown as an opportunity to cut costs, a long-term shutdown has the potential to wreak havoc in an entertainment industry already battered by the rise of streaming and struggles at the box office.
“While the media is trying to spin the double strikes as a positive when production spending stops, investors are much more concerned that this will be a long strike that hurts the performance of already completed movies and TV series,” said Rich Greenfield, an analyst at research firm LightShed Partners. .
If the twin strikes last only for a month or two, companies are likely to seize the shutdown as an opportunity to save money they would otherwise spend on pre-production — the work done before shooting begins — and bidding on scripts, Michael said. Nathanson, an analyst at SVB MoffettNathanson, who focuses on the media and entertainment industries. Some of those costs will be incurred later anyway, he noted.
They can also look at the shows and movies they have in the pipeline, pruning those that are too expensive, Mr. Nathanson said. He compared a short strike to a halftime break for a losing team that has to work out a new strategy.
The strike also threatens lucrative, long-term deals made by media companies during the streaming boom, when they were willing to spend staggering sums to lure creators like Shonda Rhimes, Ryan Murphy and JJ Abrams. Some long-term agreements have force majeure clauses that take effect on the 60th or 90th day of a strike, allowing the studios to cancel their contracts without paying a penalty. Mr. Greenfield said those clauses could theoretically let studios get expensive offers from the books, but invoking them would jeopardize relationships with top talent in the future.
If actors don’t return to work before the fall, it will hurt network television, which needs them for new shows coveted by advertisers, Mr. Nathanson said. He added that traditional US-based media companies are at a disadvantage compared to Netflix, the dominant streaming company, which can leverage its production facilities around the world.
“It’s as if the United Auto Workers went on strike, and suddenly you see more cars from Japan and Germany on the road,” Mr. Nathanson said.
Publicly, studio officials are urging Hollywood to get back to work. Mr. Iger said last week in an interview at the annual Sun Valley conference for business titans that the strike would have a “very damaging” effect on the entertainment industry.
There is little indication, however, that a deal is close.
The negotiating parties have all said they want to reach a fair deal, placing the blame for the stalemate on the other side. But they all admit privately that if Hollywood doesn’t thaw in time, everyone will get frostbite.
“There’s no such thing as a cost-saving strategy with the fall television season fast approaching and advertisers and consumers anticipating new programming,” said Ellen Stutzman, chief negotiator for the Writers Guild of America.