Hollywood Shutdown Looms as Actors Say Contract Talks Have Collapsed

Hollywood’s first industrywide shutdown in 63 years neared certainty, with the union representing 160,000 television and movie actors poised to call a strike as soon as Thursday and join screenwriters who walked off the job in May.

SAG-AFTRA, as the union is known, said at nearly 1 a.m. Pacific time on Thursday that negotiations with Hollywood studios over a new contract had collapsed and that its negotiating board had voted unanimously to recommend a strike. The previous three-year contract expired at 11:59 p.m., after an extension from June 30 to allow for continued talks.

The union’s national board was scheduled to meet at 9 a.m. Pacific for a final strike vote. Pickets could start later on Thursday.

Fran Drescher, SAG-AFTRA’s president, called studio responses at the bargaining table “insulting and disrespectful.”

“The companies have refused to meaningfully engage on some topics and on others completely stonewalled us,” Ms. Drescher said in a statement. “Until they do negotiate in good faith, we cannot begin to reach a deal.”

It would be the first time that actors and screenwriters were on strike at the same time since 1960, when Marilyn Monroe was near her peak. Dual strikes would effectively bring the entertainment business to a halt, pitting more than 170,000 workers against old-line studios like Disney, Universal, Sony and Paramount, as well tech juggernauts like Netflix, Amazon and Apple.

“We are deeply disappointed that SAG-AFTRA has decided to walk away from negotiations,” the Alliance of Motion Picture and Television Producers, which bargains on behalf of Hollywood companies, said in a statement. “This is the union’s choice, not ours. In doing so, it has dismissed our offer of historic pay and residual increases, substantially higher caps on pension and health contributions, audition protections, shortened series option periods, a groundbreaking AI proposal that protects actors’ digital likenesses, and more.”

Though Hollywood had been bracing for a writers’ strike since the beginning of the year — screenwriters have walked out eight times over the past seven decades, most recently in 2007 — the actors’ uncharacteristic resolve in recent weeks caught senior executives and producers off guard.

Many of the actors’ demands mirror those of the writers, including higher wages, increased residual payments (a type of royalty) from streaming services and aggressive guardrails around the use of artificial intelligence to preserve jobs. Guild leadership also wants new regulations regarding self-taped auditions, a pandemic phenomenon that has resulted in significantly fewer live casting sessions.

The actors last staged a major walkout in 1980, with the economic particulars of a still-nascent home video rental and sales boom as a sticking point. Their latest action is part of a resurgent labor movement, particularly in California, where hotel workers, school bus drivers, teachers and cafeteria staff have all gone on strike for some duration in recent months.

The first distress signal for the studios came in early June when roughly 65,000 members of SAG-AFTRA, the actors’ union, voted to authorize a strike. Almost 98 percent of the voters supported the authorization, a stunning figure that only narrowly eclipsed the writers’ margin.

Still, studio negotiators went into the talks feeling optimistic. They were taken aback when they saw the list of proposals from the union — it totaled 48 pages, nearly triple the size of the list during their last negotiations in 2020, according to two people familiar with the proposals, who spoke on the condition of anonymity to discuss confidential talks.

Then in late June, more than 1,000 actors, including luminaries like Meryl Streep, John Leguizamo, Jennifer Lawrence, Constance Wu and Ben Stiller, signed a letter to guild leadership, declaring pointedly that “we are prepared to strike.”

“This is an unprecedented inflection point in our industry, and what might be considered a good deal in any other years is simply not enough,” the letter said. “We feel that our wages, our craft, our creative freedom and the power of our union have all been undermined in the last decade. We need to reverse those trajectories.”

On Tuesday, the union agreed to a request by the Alliance of Motion Picture and Television Producers to hire a federal mediator, but refused to extend the contract deadline past Wednesday. Two mediators got involved, according to people briefed on the talks.

The Hollywood studios will now need to navigate a two-front labor war with no modern playbook to consult. There are many open questions, including whether the actors and the writers may demand that future negotiations with the studios be conducted in tandem. One guild that will not be included: The Directors Guild of America, which ratified a contract last month with the studios that their union leadership described as “historic.”

The actors’ walkout will provide an immediate boon to the striking writers, who have been walking picket lines for more than 70 days; their union, the Writers Guild of America, has yet to return to bargaining with the studios. Actors will soon join the writers at pickets in Los Angeles and New York in what are likely to be raucous and star-studded spectacles — struggling thespians still trying to get a foothold next to A-listers with bodyguards who get paid $20 million or more per movie role.

It will certainly be hot: Meteorologists said a “severe” heat wave in the Los Angeles area would stretch into next week. Burbank highs could hit 108 degrees.

The last time the writers and actors went on strike at the same time was in 1960, when Ronald Reagan was president of the Screen Actors Guild, and residuals for films shown on television was the fight du jour.

Though many productions shut down after the writers went on strike, some filming continued for films and TV series that had completed scripts. One prominent talent agent said that the writers’ strike had effectively shut down 80 percent of the scripted industry — and that a second strike would ground it entirely.

The strikes are the latest monumental blow to an entertainment industry that has been rocked in recent years by the pandemic and sweeping technological shifts.

The Hollywood studios have watched their share prices nosedive and their profit margins shrink as viewership for cable and network television — as well as box office returns — has collapsed in the wake of the explosive growth of streaming entertainment.

Many companies have resorted to layoffs, as well as purging series from their streaming services, all in the name of trying to increase profit margins and satisfy recalcitrant investors. Studio executives had already put the brakes on ordering new television series last year as their streaming services continued to burn through cash.

Barry Diller, the veteran media executive, said in an interview that the recent upheaval in the industry had caused distress for both sides.

“You have a complete change in the underlying economics of the entertainment business that it previously held for certainly the last 50 years, if not the last 100 years,” he said. “Everything was basically in balance under the hegemony of five major studios, and then, oh, my God, along come the tech companies in Netflix, Amazon and Apple and the fast, transformative things that came out of Covid. The result of which is you have a business that’s just completely upended.”