Hollywood is holding its breath.
Members of the
If writers walk off the job, scores of productions would be halted at a time when Los Angeles is enjoying a surge in the number of TV shows that shoot in the region.
The Writers Guild of America and the Alliance of Motion Picture and Television Producers, which represents such entertainment giants as Walt Disney Co., CBS Corp., NBCUniversal, Time Warner Inc. and 21st Century Fox, are set to resume negotiations Tuesday and a last-minute deal is still possible.
But both sides remain far apart on key issues, people close to the negotiations said. The writers maintain that they have suffered from the brunt of dramatic changes that have reshaped television, the economic engine of the industry. The guild, which has nearly 13,000 members, also has asked the companies to contribute more to the union's health plan, which has incurred deficits in recent years.
The escalation of labor tensions has caught the industry off guard. TV networks and studios have been scrambling to come up with contingency plans, including delaying the premieres of scripted shows they planned to roll out in the summer months and brushing up scripts for movies nearing production.
"This just kind of sneaked up on us," one programming executive said.
A lengthy work stoppage could be a repeat of the writers' strike in 2007 that lasted 100 days. That strike yielded important gains for writers working in digital media, but also took a toll on California's economy. The strike cost nearly 38,000 jobs and $2.1 billion in lost output in California, according to the Milken Institute.
"Even for one week, [a strike] is going to have tens of millions of dollars in impact immediately," said Kevin Klowden, executive director of the California Center at the Milken Institute. "It causes a delay in content creation and throws off schedules."
Members of other unions who are sympathetic to writers are nonetheless anxious over the prospect of a work stoppage.
“If the writers go out, it's going to have a devastating impact,” said Steve Dayan, secretary-treasurer of
Top film and TV executives last week acknowledged that their strike preparation plans have been skimpy. They have not stockpiled scripts as they did a decade ago because few anticipated a strike. But as the threat intensified, network and studio executives have been taking inventory of their productions to come up with alternative plans.
"There is no 'strike plan' but we are looking at contingencies," said one high-ranking network executive.
The first productions hit by a strike would be late-night talk shows, including CBS' "The Late Show With Stephen Colbert," NBC's "The Tonight Show Starring Jimmy Fallon" and ABC's Hollywood-produced "Jimmy Kimmel Live." Those programs rely on writers who speedily write jokes to poke fun at the events of the day.
Cable shows that also play off current events would be thrown into disarray, including HBO’s “Last Week Tonight With John Oliver” and “Real Time With
Additionally, many of the TV shows in production in Los Angeles could be disrupted. Among the dozen-plus programs in production are Showtime's "Ray Donovan," FX's "Better Things" and Amazon's "Transparent." Local TV production plummeted nearly 50% in the last strike.
A short-lived strike would not cripple the industry, company executives said. In fact, it might boost quarterly profits because programming costs would go down dramatically.
However, a prolonged strike could cause serious damage at a time when traditional broadcast and cable TV channels already are reeling from shrinking ratings and a migration of viewers.
A walkout could force networks to postpone the launch of several scripted shows planned for the summer, such as CBS' "Zoo" or NBC's "The Night Shift." Instead, the networks would hold those episodes until September or October to help pad their fall schedules. Viewers could see a lot more reality TV programs, reruns, news magazines like "Dateline" and "20/20," as well as sports programming.
TV networks might be helped by the calendar. Unlike the 2007 strike, which began in November when production was in full swing, a strike in May would occur when the traditional TV season is winding down. Nearly all the episodes for the current season have already been produced.
Nonetheless, the timing is awkward. The major TV networks have invited advertisers to sample their new fall schedules during the so-called upfront week of presentations in New York in mid-May. Advertisers probably would be wary of paying higher rates for commercial time in network shows until a strike was resolved and writers returned to work.
What's more, if a strike extended into late June, the production of new programs would be significantly delayed because that's when writers start work on the new fall shows.
Studio heads have been pushing writer-producers to quickly assemble their writing staffs so they can get started on fall TV episodes. To get a head start on the upcoming season, CBS said late last month that it was bringing back 18 prime-time shows, substantially more than usual.
Movie studios would be less affected by a walkout.
A decade ago, Hollywood studios and producers were rushing to stockpile scripts to prepare for a writers' strike. Executives this time around seem reluctant to accelerate projects because of the increasingly risky nature of the movie business.
"You're not going to see a stockpiling like the way you did 10 years ago," said one prominent producer who didn't want to be named. "It's too hard to develop movies that work, so you don't want to rush anything."
Rushing to complete movies has proved dangerous in the past.
Still, film studios are making contingency plans. Some have three or four scripts that are being fast-tracked so that movies are ready to go into production in the event of a walkout.
Agents are scrambling to put the finishing touches on deals to sell scripts to studios, in hopes that they can get their clients paid before a walkout.
Even movies in production could be disrupted. Studios often hire writers during production to "punch up" scripts with jokes, and film companies need scribes to work on re-shoots that have become more common in the industry.
Any strike would produce winners and losers.
Consumers have more choices today than they did a decade ago.
"Netflix had just started streaming and the iPhone had just been released," Barclays Capital media analyst Kannan Venkateshwar wrote in a recent report.
He predicted that another strike could drive more viewers to the new digital players. "Their library of original content could realize much wider viewership in the absence of competition from legacy TV," Venkateshwar said.
Netlifx could also showcase programs produced in Britain and other countries.
Still, both Amazon and Netflix have numerous shows in production, and a strike would interrupt their efforts to build programming.
"We're keeping an eye on it like everybody else. And like everybody else, our productions would be impacted if it happens," Ted Sarandos, Netflix's chief content officer, said last week in a call with Wall Street analysts.
"We may be impacted little bit less because we're not on such a rigid production schedule," Sarandos said. "But some of our productions would be held up in the event of a strike, which our fingers are crossed that that won't happen."