Hollywood writers to strike, triggering TV shutdowns amid streaming disruption

By Lisa Richwine and Dawn Chmielewski

LOS ANGELES (Reuters) -Hollywood film and television writers will go on strike starting Tuesday, throwing Hollywood into turmoil as the entertainment business grapples with seismic changes triggered by the global streaming TV boom.

The Writers Guild of America (WGA) called its first work stoppage in 15 years after failing to reach an agreement for higher pay from studios such as Walt Disney Co and Netflix Inc.

"The companies' behavior has created a gig economy inside a union workforce, and their immovable stance in this negotiation has betrayed a commitment to further devaluing the profession of writing," the WGA said in a statement on its website.

The Alliance of Motion Picture and Television Producers (AMPTP), which represents Walt Disney Co, Netflix Inc and others, said late on Monday it had offered "generous increases in compensation" in negotiations with the Writers Guild of America (WGA).

The 11,500 members of the WGA had given union leaders the power to call a strike as early as Tuesday, after their current contract expires, as the entertainment industry faces a tough economic backdrop. Conglomerates are under pressure from Wall Street to make their streaming services profitable after investing billions of dollars on content to attract subscribers.

The last WGA strike, in 2007 and 2008, lasted 100 days. The action cost the California economy an estimated $2.1 billion as productions shut down and out-of-work writers, actors and producers cut back spending.

Producers had indicated they were prepared to increase their offers of higher pay and residuals from a day earlier, the AMPTP statement said, but were "unwilling to do so because of the magnitude of other proposals still on the table that the Guild continues to insist upon."

The primary sticking points, the group said, were proposals that "would require a company to staff a show with a certain number of writers for a specified period of time, whether needed or not."

"The AMPTP is willing to engage in discussions with the WGA in an effort to break this logjam," the statement added.

As well as the disruption brought by the streaming business, studios are contending with declining television ad revenue, as traditional TV audiences shrink and advertisers go elsewhere. On top of all that, the threat of a recession in the world's biggest economy also looms. 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 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.

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.

LATE NIGHT HIT 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 production facilities outside of the U.S.

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.

(Reporting by Lisa Richwine, Dawn Chmielewski and Danielle Broadway in Los Angeles; Additional reporting by Ben Kellerman in New York; Editing by Mary Milliken, Jonathan Oatis, Lincoln Feast and Kenneth Maxwell)