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Saturday, May 18, 2024

Impending Labor Day Brings Hollywood Stalemate to the Brink

Hollywood studios such as Netflix, NBCUniversal, and Disney mostly shrugged when 11,500 movie and TV writers went on strike in May. The walkout was not ideal, but upper management had been preparing for it for a while. The storm wouldn’t break them.

When Hollywood’s stars walked out on Friday, the reaction they got from corporate Hollywood was noticeably different. What was an annoyance at first is now a major problem.

The Actors’ Equity Association has around 160,000 members, many of them are A-listers who have studied the craft of persuasion and are thus in a considerably stronger position than the Writers’ Guild. Without actors to perform them, the film and TV screenplays that studios had stashed away in anticipation of a writers’ strike have become unexpectedly lifeless. Numerous high-budget films, such as “Twisters,” “Venom 3,” “Deadpool 3,” and “Gladiator 2,” had to immediately stop filming.

The release calendar for major films had now begun to appear regular again, thanks to the efforts of the studios. The movie industry might suffer greatly if there is another big drop in releases. Films set for release in the second half of 2023, particularly those with Oscar hopes, may be negatively impacted by the strike, which has already contributed to disappointing box office numbers this year. On Friday, one studio executive expressed concern that it may threaten the viability of one or more major theatre chains.

B&B Theatres’ chief creative officer and executive vice president, Bobbie Bagby Ford, said the strikes “have impacted the industry at a difficult time.” B&B Theatres is a mid-tier company with more than 50 sites across 14 states.

Marcus Corporation CEO Greg Marcus recognised that the strikes were unsettling but said that they posed less of a danger to the business than the epidemic. The Marcus Corporation runs the fourth-largest theatre chain in the nation.

Pay raises, safeguards during the audition process, and improved pension and health contribution arrangements were among the suggested parameters. They proposed a rehearsal day on-camera rate for dancers as well.

A strike was avoided, but only just. The lead negotiator for the performers, Duncan Crabtree-Ireland, said in an interview with Variety on Saturday that the studio’s offer was unrealistic. Mr. Crabtree-Ireland has warned that the AI rules threaten “the entire field of acting,” and he has also noted that studios are not providing performers with income share in streaming.

While some CEOs may see a temporary closure as a chance to reduce expenses, the entertainment business is already being buffeted by the increase of streaming and challenges at the box office, so a prolonged shutdown might be disastrous.

If the two strikes last for only a couple of months, companies will likely take advantage of the shutdown to save money they would have spent on preproduction (the work done before shooting starts) and script bidding, according to Michael Nathanson, an analyst at SVB MoffettNathanson who specialises in the media and entertainment industries. He pointed out that some of those expenses would arise in the future anyway.

They might also reevaluate the programmes and films they are producing and cancel the ones that are overly expensive, as suggested by Mr Nathanson. He likened the strike to the halftime break a losing team uses to regroup and come up with a fresh game plan.

The strike is also a danger to the long-term, lucrative agreements that media firms made with creators like Shonda Rhimes, Ryan Murphy, and J.J. Abrams during the streaming boom. Some long-term contracts have force majeure provisions that enable studios to terminate without penalty on the 60th or 90th day of a strike. According to Mr. Greenfield, studios could conceivably get pricey agreements off the books with the use of such provisions, but doing so would put future working relationships with elite talent at risk.

Network television, which requires performers for new programmes prized by advertisers, would suffer if they aren’t hired back by the autumn, Mr Nathanson said. He went on to say that Netflix, the major streaming firm, has an edge over conventional media organisations in the United States because it can take use of its production facilities in other countries.

Studio heads are publicly demanding that the entertainment industry in Hollywood return to work. While attending the annual Sun Valley conference for business giants last week, Mr. Iger warned in an interview that the strike would have a “very damaging” impact on the entertainment sector.

Each party in the negotiations has said that they want to achieve a fair deal and has blamed the other for the impasse. Although they all know in their hearts that if Hollywood doesn’t warm up soon, they’ll all suffer frostbite, they refuse to speak publicly about it.

David Faber
David Faber
I am a Business Journalist of The National Era
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