Why Hollywood actors are on strike and what it means for entertainment industry

Transcript

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Geoff Bennett: SAG-AFTRA, the union representing 160,000 television and film actors, will go on strike starting at midnight after four weeks of failed negotiations.

Jeffrey Brown finds out what's behind the decision and how Hollywood will be affected. It's part of our arts and culture series, Canvas.

Fran Drescher, President, SAG-AFTRA: You share the wealth because you cannot exist without us. Thank you.

(Cheering and Applause)

Jeffrey Brown: The announcement came this afternoon. Actors union SAG-AFTRA will officially strike at midnight tonight.

Already, actors are leaving sets and even premieres, and many more will be on picket lines starting tomorrow.

Union President Fran Drescher:

Fran Drescher: The entire business model has been changed by streaming, digital, A.I. This is a moment of history that is a moment of truth. If we don't stand tall right now, we are all going to be in trouble.

Jeffrey Brown: Among the unresolved issues, demands for higher wages, an increase of residuals, as streaming services command more of the market, and new protections from the use of artificial intelligence.

For its part, the Alliance of Motion Picture and Television Producers, representing traditional studios such as Universal, Paramount, and Disney, along with newer tech giants like Apple, Netflix, and Amazon, blamed the union for walking away from major concessions, saying in a statement: "The union has regrettably chosen a path that will lead to financial hardship for countless thousands of people who depend on the industry."

In an interview this morning, Disney CEO Bob Iger said this:

Bob Iger, CEO, Walt Disney Company: There's a level of expectation that they have that is just not realistic. And they are adding to the set of challenges that this business is already facing that is, quite frankly, very disruptive.

Jeffrey Brown: The move all but grinds Hollywood to a halt, as actors join the Writers Guild, whose members have been without a contract and on strike since May over similar issues.

This is the first time both unions have been on strike since 1960, when actor and future President Ronald Reagan headed up the Actors Guild.

Anousha Sakoui, who covers the industry for The Los Angeles Times, thanks for joining us.

I mentioned some of the specific issues. And we will come back to that. But I'm struck by how both sides seem to be framing this in almost existential terms. Are you hearing it that way?

Anousha Sakoui, The Los Angeles Times: Yes, for sure.

And I think, like you said in the package, that this is similar with the sort of debate with the writers, that the studios are sort of saying that they have issues of terms of restructuring at that time. We were seeing the studios laying off thousands of employees.

And now there's been this sort of shift in that sort of streaming model, where there's been a pullback in production, and many studios seeking cost savings and trying to cut back. So, obviously, that doesn't align with unions, who want to get paid more.

Jeffrey Brown: And what are the major sticking points at this point that you see that led to the breakdown?

Anousha Sakoui: Yes, it seems that there was a sticking point around streaming residuals, which are the royalties paid when a TV or film is replayed.

And the actors wanted sort of a share of revenue linked to the most successful shows. And that seemed to be a big no for the studios. They also wanted greater protections around artificial intelligence than the studios seem to be offering them. And they also wanted big increases in wages to counter the impact of inflation.

And, obviously, the two sides weren't able to come to agreement on those numbers.

Jeffrey Brown: What about the response from the industry?

They put out a list of 14 proposals 14 proposals that they said they had put on the table in response to the union. You saw Bob Iger's comments today. What are you hearing from the industry?

Anousha Sakoui: Well, I think, when you look at it, you have to look at the finer details. It's not that easy, I think, to sort of compare one version of a proposal and what the actors are saying.

So you sort of get two versions of the same story. I think, a lot of the time, it's looking into the details, the finer details of the offers.

And it's -- what's there to say, except that there's going to be a strike this weekend? People are very concerned across the industry about what it means for livelihoods, not just of actors and writers, who are on strike, but all the other workers who -- the craftspeople, the hairdressers, makeup artists, costumers, thousands of people that work on film and TV that will have their work stopped and their pay stopped, and also the businesses that are dependent on these -- film and TV across many big filming hubs across the U.S.

It's not just Southern California and Los Angeles, but New York, New Mexico, and Georgia, for example, have huge film industries.

Jeffrey Brown: Well, tell us a little bit more about that, because I did want to ask you.

I mean, the economic impact of this that goes beyond the union workers, goes beyond the studios, goes beyond the Hollywood industry to L.A. and beyond, as you were saying, how big an impact will it have?

Anousha Sakoui: I mean, one thing that the SAG-AFTRA strike will do is that it will stretch the reach of these work stoppages to overseas.

So far, really, it's been confined to the U.S. and -- but now, because SAG-AFTRA has a sort of global reach and their membership is across the world, productions that have been ongoing in the U.K. or Australia might now have to come to an end. That was something that studios might have been able to sort of fall back on to keep producing overseas.

So that's one thing. And here at The L.A. Times, we have been reporting on what people have been estimating is the -- will be the economic fallout. Back in 2007-'8, it came to about $2.1 billion at the time. It was the estimated cost for Southern California and the local economy there.

But experts have been estimating that, this time, the fallout could exceed $3 billion.

Jeffrey Brown: What about the impact on production, of course, for films and TV, and, of course, all of us in the audience who want to know what will happen? What will we be seeing?

Anousha Sakoui: So, already, I could tell you that production on scripted television, the big dramas that we love to binge and watch or catch up on a Sunday on HBO, those -- many of those have stopped filming or their productions have been delayed for their new seasons.

If you look at the networks, the big networks, which have been presenting their fall slates, they're very heavily dominated by reality TV and repeats. ABC, for example, has the popular show "Abbott Elementary," but they will only be showing repeats, according to their presentations a few months ago.

So we know that shows like that, Netflix's "Stranger Things," will be delayed in producing new seasons, because their creators have said that they're not going to work during the writers strike.

The question now is also films that are in production, things that are ongoing, that haven't been stopped by the writers strike, if those also will be stopped by actors going on strike, and that looks very likely. So we could see a greater impact to the full slate, and also delays in the release of movies.

Jeffrey Brown: And just in our last 30 seconds, Anousha, do you have a sense of how long this can go on? Do you have a sense of the relative strengths or weaknesses of both sides?

Anousha Sakoui: You know, that's the big question everybody wants to answer, and it's really hard to predict.

I mean, obviously, the last writers strike went on for 100 days, and that wasn't the longest. So we could -- we're in for a little bit of time still to go, because my expectation is that they -- the studios will probably seek to resolve the dispute with the actors and then maybe speak to the writers.

But there's alternate views. The writers, some writers, seem to think that the actors going on strike might bring both strikes to a sooner close, so it's hard to predict.

Jeffrey Brown: All right, much more to come.

Anousha Sakoui of The Los Angeles Times, thank you very much.

Anousha Sakoui: My pleasure.