Hollywood writers begin strike as guild says studios have ‘closed the door’ on labor

Hollywood writers are on strike for the first time in 15 years, causing an industry-wide production shutdown.

After failing to reach an agreement with production studios by Monday’s midnight deadline, the Writers Guild of America (WGA), which represents thousands of television and film writers, called a strike to start Tuesday at midnight.

In a statementthe WGA said the committee “began this process with the intention of reaching a fair deal, but the responses from the studios have been woefully inadequate given the existential crisis the writers are facing.”

“The behavior of the companies has created a gig economy within a union workforce, and their steadfast position in this negotiation betrayed their commitment to further devaluing the writing profession,” the guild added.

“From their refusal to guarantee a weekly level of employment in episodic television, to the creation of a “daily rate” in comedy variety, to their blocking of free work for screenwriters and AI for all writers, they closed the door to their workforce and opened the door to writing as a fully independent profession No such deal could ever be contemplated by these members.

The WGA had negotiated with the Alliance of Motion Picture and Television Producers (AMPTP), which negotiates on behalf of studios such as Netflix, Amazon, Apple, Disney, Warner Bros. Discovery NBCUniversal, Paramount and Sony.

The 6-week talks focused on compensation issues caused by the streaming boom, in addition to other fundamental changes in entertainment like the recent wave of cost-cutting that prompted media giants Disney (DIS) at Warner Bros. Discovery (WBD) to carry out massive layoffs and suspend several projects.

“The AMPTP presented a comprehensive proposal to the Guild last night, which included generous increases to writers’ compensation as well as improvements to streaming residuals,” AMPTP said in a statement. “The AMPTP has also indicated to the WGA that it is prepared to improve this offer, but is unwilling to do so due to the magnitude of other proposals still on the table on which the Guild continues. to insist.”

The story continues

Yahoo Finance sought additional comment from major Hollywood studios involved in the talks, but did not immediately respond.

How we got here

The television and film industry today is being significantly reshaped by the impact of streaming services.

Streaming shows often have fewer episodes and less residual revenue compared to traditional network television, which often means less money in writers’ pockets.

At the same time, the majority of studios are no longer just “pure play” production houses. Instead, they have their own streaming divisions, which has brought a new set of challenges as direct-to-consumer losses mount.

“Whether this is a dot on the radar or an extended strike like in 2007 remains to be seen,” Scott Purdy, head of US media industry at KPMG, told Yahoo Finance. “In the short term though, consumers should prepare for some of their favorite TV shows to be delayed and potentially enter a period where there is a limited amount of new content to watch. Well, watch to see how it affects subscription decisions with inflation – pinched consumers who were already reassessing their spending habits.”

Late-night TV shows will be the first to feel the impact.

Seth Meyers, who hosts NBC’s “Late Night,” say this weekend said these changes “not only affect writers, [they effect] all the amazing non-writer staff on these shows. … What the writers are asking for is not unreasonable.”

Studio executives said they have enough scripted content in the bank to avoid disruptions to the content pipeline.

“We have a large base of upcoming shows and movies from around the world, so we could probably serve our members better than most,” Netflix (NFLX) co-CEO Ted Sarandos said during the interview. quarterly call on the company’s results last month.

David Zaslav, CEO of Warner Bros. Discovery echoes similar sentiments at the company’s Max Streaming launch presentation last month, telling reporters, “We’ve prepared. We’ve produced a lot of content and we’re launching a product on May 23. So we’re ready to launch guns blazing in terms of our product and our platforms around the world.”

The box office should also be safe, according to industry executives: “For movies coming out this year, the strike really doesn’t have an impact,” the CEO of IMAX (IMAX) said on Monday. Richard Gelfond at Yahoo Finance Live. “It’s a question of how long it will last and what will happen next year.”

The writers’ strike is likely to have serious economic repercussions, as the last strike demonstrated.

According to estimates by the Los Angeles County Economic Development Corp., this strike, which lasted 100 days from November 2007 to February 2008, cost the Los Angeles County economy $2.5 billion.

“I don’t think you want a writers’ strike,” Citi’s Jason Bazinet previously told Yahoo Finance Live. “At the end of the day, the street doesn’t like the uncertainty that comes with a strike.”

Alexandra Channel is a senior reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at [email protected]

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