Labor Day looms as crisis point in Hollywood impasse

Labor Day looms as crisis point in Hollywood impasse

In May, when 11,500 film and television writers went on strike, Hollywood companies such as Netflix, NBCUniversal and Disney reacted with a shrug. The walkout didn’t go well, but officials had been expecting it for months. They could ride it.

When the actors walked out on Friday, the angry reaction from Hollywood’s corporate world was dramatically different. What started as an inconvenience has become a crisis.

For starters, the actors’ union is far more powerful than the writers’ union, with a membership of around 160,000 comprising world-renowned personalities who have mastered the art of enthralling audiences. Film and TV scripts that studios had been saving in case of the writers’ strike suddenly go dormant and actors don’t have the ability to bring them to life. Shooting on several big-budget films, including “Twisters,” “Venom 3,” “Deadpool 3” and “Gladiator 2,” had to be immediately halted.

In interviews, three studio presidents, 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 — until roughly Labor Day — until that there should be no serious impact on the release. Calendar for 2024, exclusively for movies. The work stoppage till September could force studios to delay major projects for next year by six months, making 2024 a ghost town of memory set in place by the recent Covid-19 pandemic.

Studios had normalized release schedules again, with big films coming one after the other. Another significant reduction in offerings could be disastrous for cinemas. This year’s box office has already been disappointing and, with striking actors barred from promotional efforts, films scheduled for the second half of 2023 could be affected – especially films with award aspirations. One of the studio’s executives predicted Friday that it could put at least one of the national cinema chains in jeopardy.

Bobby Bagby Ford, Chief Creative Officer and Executive Vice President B&B TheaterOne midsize chain with more than 50 locations in 14 states said the strikes have “hit the industry at a difficult time.”

Ms Bagby Ford said, “The duration of the ongoing strike will play a significant part in its impact on cinemas.” “If it remains small enough to contain the huge backlog of films, then the situation can be managed.”

Greg Marcus, Chief Executive Officer Marcus Corporation – which owns the country’s fourth-largest theater chain – agreed that the strikes were troubling, 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 of over a year,” Mr Marcus said. “But it’s not like being shut down for months, people debating the value of theatricality, and then having big hiatuses because of production delays.”

Labor Day will arrive with heartstrings, prompting the studio to break the impasse with actors as soon as possible. But there’s a problem: Studio executives were genuinely surprised by the Screen Actors Guild’s reaction to their proposed terms. They felt they had made significant concessions and were stunned by the union’s rhetoric, especially since they had been able to amicably negotiate a lucrative deal new contact In 2020.

Proposed terms included increased pay, protections around the audition process, and more favorable terms for pension and health contributions. He also offered that the dancers would receive an on-camera rate for rehearsal days.

In particular, the studio – while admitting in private conversations that they made a mistake by largely ignoring the writers’ demands for guardrails around the artificial intelligence – asked their interlocutors about the proposed conditions for the use of AI. This will protect the actors.

But this was not enough to avert the strike. Duncan Crabtree-Ireland, the actors’ chief negotiator, said in an interview Saturday that the studio’s offer was unfair. The terms artificial intelligence “threaten the entire field of acting,” Mr Crabtree-Ireland said, adding that studios were also not offering actors revenue participation in streaming.

“Those are the main issues,” Mr Crabtree-Ireland said. “And the fact that the companies won’t move on from them shows a colonial attitude toward the workers who are the entire basis of their companies’ existence.” He said that the actors want to start bargaining again.

The Alliance of Motion Picture and Television Producers, which negotiates on behalf of the studios, disputed Mr. Crabtree-Ireland’s characterization of its members’ vision, citing the terms of its resolution, which included “the actors’ digital Unprecedented AI proposal to protect equality”.

Disappointment on the other side of the bargaining table on Thursday led Disney Chief Executive Robert A. The comments came from Iger, who said during an interview on CNBC that workers were being treated “unrealistically”. Adding fuel to the fire was an article on show business website Deadline that quoted an unnamed studio executive who had threatened to “bleed” the writers unless they “started losing their apartments”. ” Studio Alliance said the unnamed executive did not speak for its members.

While some executives see a brief pause as an opportunity to reduce costs, a prolonged shutdown is likely to wreak havoc on an entertainment industry already struggling with streaming surge and box office struggles .

Analyst Rich Greenfield said, “While media executives are trying to paint the double strike as positive due to stalled production spending, investors are more concerned that this will be a prolonged strike that will damage already completed films and TV series.” harm its performance.” research firm Lightshade Partners.

If the double strike only lasts a month or two, Michael said, the companies will likely take advantage of the shutdown as an opportunity to save cash that they would otherwise be spending on preproduction – done before shooting begins. work – and bid on the script. Nathanson is an analyst with SVB MoffettNathanson focusing on the media and entertainment industries. Some of those costs will be paid later as well, he said.

Mr. Nathanson said he might take a second look at shows and movies in the pipeline, cutting back on those that are too expensive. He compared a brief strike to a halftime break for the losing team, which needs to develop a new strategy.

The strike also threatens lucrative, long-term deals struck by media companies during the streaming boom, when they were willing to pay astonishing sums to woo creators like Shonda Rhimes, Ryan Murphy and JJ Abrams. Some long-term deals have force majeure provisions, which take effect on the 60th or 90th day of the strike, allowing studios to terminate their contracts without paying a penalty. Mr Greenfield said these clauses could theoretically allow studios to strike expensive deals, but enforcing them would jeopardize future relationships with top talent.

If actors do not return to work by autumn, it will hurt network television, which needs them for new shows coveted by advertisers, Mr Nathanson said. He added that traditional media companies based in the United States are at a disadvantage compared to major streaming company Netflix, which can take advantage of its production facilities around the world.

“It’s like when the United Auto Workers go on strike, and suddenly you see more cars from Japan and Germany on the road,” Mr. Nathanson said.

Publicly, studio executives are urging Hollywood to get back to work. mr iger Said Last week, in an interview ahead of the annual Sun Valley Conference for Business Titans, it said the strike would have a “very detrimental” effect on the entertainment industry.

However, there is little indication that an agreement is close.

All the negotiating parties have said they want to reach a fair settlement and have blamed the other side for the standoff. But they all privately admit that if Hollywood doesn’t thaw out in time, everyone will get cold feet.

Ellen Stutzman, chief negotiator for the Writers Guild of America, said, “With the TV season fast approaching and advertisers and consumers expecting new programming, it is foolish to build on nothing as a cost-saving strategy.”

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