Writers' Strike Looms in Hollywood

Back on May 15th here, I warned the witching hour was approaching.

I reported that the three-year contract between the Hollywood studios and writers was scheduled to expire on October 31. Then, next year, the contract between the studios and actors and directors also runs out.

According to the Associated Press, "Both the WGA (Writers Guild of America) and Screen Actors Guild elected new leaders after the current contracts were signed who have promised to get tougher with studios."

The Los Angeles Times reported on Wednesday that a federal mediator, Juan Carlos Gonzalez, joined the negotiations on Tuesday. The hope was that the mediator would be able to keep the writers working past the ending of the contract at midnight on Wednesday instead of striking.

According to the Wall Street Journal, "[N]umerous issues are keeping the two sides far apart. At the top of the list is the question of how to pay writers for use of their work when it is distributed on the Internet and via other digital media. The guild is also seeking to renegotiate DVD residual payments its members receive."

If the writers were to strike, there would be a domino effect with television being hit the hardest. Those shows that are written daily, like the late night shows, would be the first to feel the impact. It was no accident that Jay Leno made numerous references to a potential strike during his opening monologue last night. If the writers strike, he and his late night counterparts (Letterman, Kimmel, O'Brien) would all have to start showing reruns immediately.

"Next to suffer would be situation comedies and soap operas, which producers estimate could provide new episodes for around a month with the scripts that have already been written. Producers of scripted dramas, which take the longest to film and are written the furthest in advance, predict they will be able to provide the networks with new episodes through the critical February sweeps period, when advertising rates are set." (WSJ)

The last domino to fall would be the film industry, which operates with the longest schedule. Thursday's edition of "All Things Considered" on NPR reported that movies wouldn't feel the impact of a writers' strike until 2009.

NPR did mention two wild cards, however. The first is the Teamsters who are "very key players here." They are encouraging their members not to cross picket lines. This would be a huge help to the writers' cause because if the Teamsters refused to work in Hollywood the effect "would be felt instantly." The LA Times agreed with this assessment, pointing out that "Teamsters Local 399...represents 4,500 truck drivers, casting directors and location managers."

The second wild card is the other artists' unions. Word had been that the writers would wait until next June to strike because that's when the Screen Actors Guild and the Directors Guild of America contracts end. Now rumors are swirling that the Directors Guild might be "cutting its own deal early — something that has happened before...giving studios the opportunity to stock up on material in anticipation of a strike." That news might lead to the writers taking action now rather than later.

There's a lot at stake. The LA Times reports: "A long walkout would inflict pain beyond Hollywood's studio gates because scores of businesses -- including hotels, restaurants, florists and dog groomers -- rely on the entertainment industry, which contributes 7% -- an estimated $30 billion annually -- to Los Angeles County's $442-billion economy." The last big strike occurred in 1988 when the writers struck for 22 weeks and cost an estimated $500 million.

Yesterday's LA Times said that a strike could be called as early as today. The chief negotiator for the Alliance of Motion Picture and Television Producers is Nick Counter. He was quoted as telling the WGA negotiators: "We want to make a deal...But, as I said, no further movement is possible to close the gap between us so long as your DVD proposal remains on the table."

In response, the writers refused to meet yesterday. Ninety percent of their membership has agreed to authorize their leaders to call a strike at any time after midnight on Wednesday. There was a meeting scheduled last night for the WGA at the Los Angeles Convention center. The contract under consideration would impact approximately 12,000 writers, and a large turnout was expected at that meeting.

Industry observers were also quoted in yesterday's LA Times article. "Striking so soon carries big risks for the writers union. 'The guild would look completely unreasonable if it struck immediately, particularly since they've introduced a federal mediator,' said Jonathan Handel, an entertainment industry attorney with TroyGould in Los Angeles and a former associate counsel for the Writers Guild."

Stay tuned...