Hollywood actors poised to strike, writers are joining

Negotiators for Hollywood's actors union unanimously recommended a strike after talks with studios broke down, setting the stage for performers to join writers on picket lines as early as Thursday and disrupt scores of shows and movies.

The SAG-AFTRA union said its national board would vote on a strike order on Thursday morning. If approved, Hollywood studios would face their first dual work stoppage in 63 years and be forced to shut down productions across the United States.

Both SAG-AFTRA — Hollywood's largest union, with 160,000 members — and the Writers Guild of America (WGA) are demanding increases in base pay and residuals in the streaming TV era plus assurances that their work will not be replaced by artificial intelligence (AI).

Fran Drescher, former star of "The Nanny" and the president of SAG-AFTRA, said studios' responses to the actors' concerns had been "insulting and disrespectful."

"The companies have refused to meaningfully engage on some topics and on others completely stonewalled us," she said in a statement after a deadline for actors to agree a new contract expired at midnight on Wednesday. "Until they do negotiate in good faith, we cannot begin to reach a deal."

The Alliance of Motion Picture and Television Producers (AMPTP), which negotiates on behalf of Netflix Inc (NFLX.O), Walt Disney Co (DIS.N) and other companies, said it was "deeply disappointed that SAG-AFTRA has decided to walk away from negotiations."

The group said it had offered "historic pay and residual increases" and "a groundbreaking AI proposal that protects actors' digital likenesses." Actors are worried that their digital images will be used without their permission or proper compensation.

"Rather than continuing to negotiate, SAG-AFTRA has put us on a course that will deepen the financial hardship for thousands who depend on the industry for their livelihoods," the AMPTP said.

ECONOMIC DAMAGE

The strike by roughly 11,500 writers has sent late-night television talk shows into endless reruns, disrupted most production for the fall TV season and halted work on big-budget movies.

A walkout by SAG-AFTRA would shut down the studios' remaining U.S.-based productions and put more pressure on media companies to find a resolution.

Hollywood has not faced two strikes at once since 1960, when members of the WGA and the Screen Actors Guild both walked off the job in a fight over residuals from films sold to TV networks.

Bob Iger, whose contract as Disney's CEO was extended to the end of 2026 this week, in an interview with CNBC on Thursday said that the writers' and actors' unions had unrealistic expectations.

"It's very disturbing to me," Iger said before citing the entertainment industry's ongoing recovery from the disruption of the COVID-19 pandemic. "This is the worst time in the world to add to that disruption."

The unions are battling over base pay and residuals from streaming services.

"You have to make $26,000 a year to qualify for your health insurance and there are a lot of people who get across that threshold through their residual payments," actor Matt Damon said at a promotional event held for the film "Oppenheimer" on Wednesday. "There's money being made and it needs to be allocated in a way that takes care of people who are on the margins."

Many streaming services, however, have yet to turn a profit after companies spent billions of dollars on programming to try and attract customers.

Disney, Comcast Corp's (CMCSA.O) NBCUniversal and Paramount Global (PARA.O) each lost hundreds of millions of dollars from streaming in the most recent quarter. At the same time, the rise of online video has eroded television ad revenue as traditional TV audiences shrink.

The WGA's work stoppage has rippled throughout California and beyond, hitting caterers, prop suppliers and others who rely on Hollywood production for business. Economic damage is expected to spread if actors also strike.

Broadcast networks have already announced fall schedules heavy with reality shows, which are not affected by the current labor tensions. Independent productions not covered by union contracts also can continue.