SAG-AFTRA and WGA together ‘will shut Hollywood down effectively’

Written by Celine Mendiola, produced by Giuliana Mayo

An actor on strike holds a sign that says, “Unions stand together. SAG-AFTRA supports WGA,” July 13, 2023. Photo by Robin Estrin.

Ten weeks into the writers’ strike, SAG-AFTRA actors have decided to start striking on Friday at 12 a.m. after failure to reach a deal with the Alliance of Motion Picture and Television Producers (AMPTP). 

Kim Masters, host of KCRW’s The Business, says the studios and guilds are dealing with the disruptive switch from legacy television to streaming platforms.

“[Studios] are looking at a transition away from those reliable sources of income — the cable channels and the TV bundles — and … they're laying people off en masse,” says Masters. “Meanwhile, the writers and the actors, they are concerned about their piece of the pie, which has already been undermined by the streaming switch-over. So right now, I think that the two guilds together will shut Hollywood down effectively.”

Jonathan Handel, an entertainment attorney and contributing writer at Puck, says this transition to streaming is “existential for all parties” in the industry. 

For studios, box office numbers are still lagging 25% or more from pre-COVID levels; audience demographics are shrinking as viewers get older; and they can’t afford to invest as much into streaming as Netflix, says Handel. 

“Meanwhile, for labor, it's existential because they do need their piece of the pie. The employment is becoming increasingly precarious. They're not getting a metric of success, the way they did in the past, and they add to that now they're afraid of being displaced by AI.”

Recently, an anonymous executive allegedly said studios want to wait “until union members start losing their apartments and losing their houses.” But Handel says that while studios might like to weaken unions, they probably wouldn’t want to eliminate them altogether.

“Residuals tide people over between gigs. And … the Writers Guild determines credits on movies and TV shows. If there's a dispute between the members, writers get angry at their own guild rather than angry at the studio,” he says.

But Masters says that even streaming studios like Netflix aren’t completely safe from the effects of the strikes in Hollywood. “The writers have already been, I think, more effective than the studios anticipated in shutting down production,” she says. “They would figure out where things were shooting, and run over there and form a picket line and then make noise. … I don't know … how long it goes before the studios are really hurting themselves.”

The near-future impact in September: legacy studios like ABC, NBC, and CBS will likely lose audiences, who instead will turn to streamers for new scripted shows, Handel suggests. But not every studio has the same stakes as the legacies, so bringing all these studios to the same negotiating table will be difficult.

“Fox is mostly unscripted [content]. Warner Discovery has a lot of unscripted. Sony is a supplier mostly to the streamers. And so the difference in emphasis, and then interest, between the companies makes it harder to get a deal done, because the alliance, the AMPTP, operates on a consensus basis,” Handel says.

The attorney also predicts that the WGA and SAG-AFTRA won’t participate in joint negotiations, since their demands are different. While writers don’t want AI to write scripts in the studios, actors are willing to negotiate allowing AI-generated performances, as long as they get paid for some of the time they would have been working if AI wasn’t used. 

But Masters says these strikes will deal terrible damage to businesses in Hollywood as a whole. “I just did a piece about the restaurants that are going to feel it, but it's florists, it's caterers. … It’s already being felt, and it’s going to get worse.”

Workers in different industries all over LA are going on strike. Today, fast food workers and cashiers are walking out at restaurants like McDonald’s and Domino’s due to low wages and safety concerns. Over the past few weeks, thousands of hotel workers have also been walking off the job. And UPS workers could strike as early as next month.

Many KCRW staff are members of SAG-AFTRA, though we are under a separate contract from the agreement at issue between actors and studios.