Hollywood writers go on strike for better pay amid Guild, studios deadlock

By Thomas Buckley and Christopher Palmeri

(Bloomberg) --Writers for some of the most popular shows on television are walking off the job, striking for higher pay amid rapid changes in the way people watch their programs and films.
 

The Writers Guild of America, which represents more than 11,500 Hollywood scribes, said its strike is effective Tuesday morning Los Angeles time. Members voted overwhelmingly to authorize the walkout last month.

As a result, work on late night talk shows and soap operas could halt immediately. Depending on how long the work stoppage lasts, consumers could miss episodes of their favorite shows this fall. Movie release schedules could be impacted. The walkout could also depress the economy of Los Angeles, the nation’s second-largest city, which is already struggling with slower home sales and labor disruptions at its port.

In a statement Monday night, the union said the decision to strike was made after six weeks of negotiations and that the studios’ responses have been “wholly insufficient given the existential crisis writers are facing.” The guild added that the studios have been “stonewalling” on issues such as the use of artificial intelligence in script production.

The Alliance of Motion Picture & Television Producers, which represents Hollywood studios, said in a separate statement Monday night that it presented “generous increases” in compensation to writers as well as improvements in residual payments for shows that are on streaming services. The studios said they were prepared to improve that offer, but were unwilling to do so because of the magnitude of other requests from the writers.

The key points of contention are mandatory staffing and duration of employment, with the studios arguing that the writers guild is seeking contracts for a minimum number of writers on shows regardless of whether they’re needed, according to the alliance’s statement.

The union says the studios that produce television shows and films have used the transition from traditional TV viewing to streaming to cut writers’ pay. More writers are working at union minimums and for shorter periods, the union said.

In the heyday of network TV, writers often worked on 22-episode seasons that included pilot episodes written before the series was officially picked up. In the streaming era, seasons may consist of only six or eight episodes and programs are ordered directly without pilots. 

With streaming services often picking up global rights to shows for multiple years, there’s less opportunity for writers to earn huge paydays from recurring and international sales.

The strike is coming amid an overall contraction in entertainment spending following several boom years after Netflix Inc., Walt Disney Co. and others spent heavily to create new programs for their streaming services. Disney is in the process of laying off 7,000 staffers, many of whom worked in the creation or marketing of shows.

Film and TV production in Los Angeles tumbled 24% in the first quarter, as measured by FilmLA, which administers permits for shoots. Among the hardest hit categories was TV dramas, a staple of streaming and cable TV, which fell 40%.

The work stoppage can have much broader impact on local economies, spilling over into the pay of everyone from caterers to carpenters. A 2007 writer’s strike, which lasted three months, resulted in a loss of 37,700 jobs and $2.1 billion in economic output, the Milken Institute estimated. It also spurred a rise in reality TV programming which requires fewer writers.