Hollywood writers, studios stage last-minute talks as strike deadline looms

Negotiators for Hollywood writers and film and television studios engaged in 11th-hour contract talks on Monday to try and avert a strike that would disrupt TV production across an industry grappling with seismic changes.

The Writers Guild of America could call a work stoppage as early as Tuesday if it cannot reach a deal with companies such as Walt Disney Co and Netflix Inc. A strike would be the first by the WGA in 15 years.

Writers say they have suffered financially during the streaming TV boom, in part due to shorter seasons and smaller residual payments. They are seeking pay increases and changes to industry practices that they say force them to work more for less money.

Half of TV series writers now work at minimum salary levels, compared with one-third in the 2013-14 season, according to Guild statistics. Median pay for scribes at the higher writer/producer level has fallen 4% over the last decade.

“The way that it’s looking now is that there won’t be a middle class in Hollywood,” said Caroline Renard, a Guild liaison and writer who has worked on Disney Channel’s “Secrets of Sulphur Springs” and other shows.

Artificial intelligence is another issue at the bargaining table. The WGA wants safeguards to prevent studios from using AI to generate new scripts from writers’ previous work. Writers also want to ensure they are not asked to rewrite draft scripts created by AI.

The negotiations take place against a difficult economic backdrop for the industry. Entertainment conglomerates are under pressure from Wall Street to make their money-pit streaming services profitable, after investing billions of dollars on content to attract subscribers.

They also are contending with declining television ad revenue, as traditional TV audiences shrink and advertisers go elsewhere. The threat of a recession also looms.

The Alliance of Motion Picture and Television Producers, which represents Comcast Corp, Disney, Warner Bros Discovery, Netflix and hundreds of production companies, has said it is committed to reaching a fair agreement.

If a strike is called, late-night shows such as “The Tonight Show with Jimmy Fallon,” “Last Week Tonight with John Oliver” and “Saturday Night Live,” which use teams of writers to craft topical jokes, are expected to immediately stop production.

That means new episodes will not be available during their traditional TV time slots or on the streaming services that make them available the next day.

Soap operas and other daytime shows such as “The View” will likely be disrupted. News programs would not be interrupted because those writers are members of a different union.

Further ahead, the strike could lead to a delay of the fall TV season. Writing for fall shows normally starts in May or June. If the work stoppage becomes protracted, the networks will increasingly fill their programming lineups with unscripted reality shows, news magazines and reruns.

Netflix may be insulated from any immediate impact because of its global focus and access to far-flung production facilities outside of the U.S.

The last WGA strike in 2007 and 2008 lasted 100 days. TV networks broadcast reruns and more reality shows, and the effects rippled through the California economy as productions shut down and out-of-work writers, actors and producers cut back spending.

The strike cost the state an estimated $2.1 billion and tipped its already fragile economy into a recession, according to the Milken Institute think tank.

Studios do not want another disruption after the Covid-19 pandemic halted production worldwide for months. But budgets are tight, and a new era of fiscal austerity has dawned in Hollywood, with studios laying off thousands of employees and curtailing spending on content.

“The writers have legitimate issues here,” said one talent agent close to the bargaining process. “But the studios and the producers have very legitimate issues also. Their stock prices are down. They’ve overspent on content. They need to show profits to their shareholders.”

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.