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Showdown in Tinseltown: Could Double Strikes Freeze Hollywood’s Cash Flow?

Imagine the Hollywood of yesteryear, the glitz, and glamour of the silver screen. Now imagine it coming to a grinding halt. For the first time since the ’60s, Tinseltown stares down the barrel of two coinciding guild strikes, with both screenwriters and actors at loggerheads with studios. If this deadlock persists, it could freeze Hollywood’s cash flow and send shivers through the entertainment industry.

First, the scriptwriters declared a strike a couple of months back. Now, actors, represented by SAG-AFTRA, are on the verge of their own as they negotiate a new contract with studios. The situation has every talent agent breaking a sweat, considering the disruption it could cause to film and TV production.

A twin strike, some say, could hasten an end to the deadlock. Others, however, fear it might only prolong the industry’s paralysis. In a new twist, as the actors prepare to strike, their union has agreed to call upon a federal mediator to facilitate a compromise with studios, albeit without agreeing to push back the deadline.

A quick backdrop: The Writers Guild of America (WGA) and SAG-AFTRA have been wrestling with the Alliance of Motion Picture and Television Producers (AMPTP)—which represents over 350 studios, networks, and streaming giants like Netflix, Disney, and Amazon—over wages, AI usage, and other matters. The WGA is already on strike, while SAG-AFTRA’s contract extension ticks away.

The stakes are sky-high. The last writers’ strike in 2007-2008 resulted in more than 60 TV shows halting production and ad sales plunging, costing California over $2 billion and 37,700 jobs. If actors join the cause, the repercussions could be even more dramatic.

The nightmare scenario? A prolonged stalemate. With Hollywood evolving rapidly thanks to streaming and AI, the stakes are higher than ever, says entertainment lawyer Jonathan Handel. Old and new players in the entertainment industry, burdened by debt and grappling with the rise of streaming, might find it challenging to move as a unit and break the strike.

However, there’s also a glimmer of a dream scenario. If SAG-AFTRA joins WGA on the picket lines, there’s a chance the two guilds’ contracts might be negotiated simultaneously, bringing in some efficiencies. The need for fresh fall TV content might push media companies to resolve the strike, and high-profile actors picketing could generate positive PR for the strikers, potentially pressuring the studios to reach an agreement.

In the 2008 strike, Disney CEO Bob Iger played a crucial role in ending the impasse. While he’s been on the sidelines this time around, there’s still hope he might step in to broker peace again.

What’s for sure is that no one wants an extended stand-off. At some point, even streaming giants will run out of content, and the companies will be forced to strike a deal. The silver screen can’t afford to lose its shine for too long.

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