The Future of Hollywood Hangs in the Balance as WGA Contract Expires

With the Writers Guild of America's contract with major studios expiring, Hollywood braces for a potential writers' strike as negotiations for a new labor pact continue.

As Hollywood’s biggest players await the outcome of the Writers Guild of America’s (WGA) contract negotiations with major studios, the entertainment industry faces an uncertain future. The WGA’s contract expired on Monday, raising the possibility of a strike if labor negotiations break down.

Earlier this month, WGA members overwhelmingly voted to authorize a strike if necessary, with 97.8% of members supporting the strike-authorization vote. The union represents almost 80% of the WGA’s membership, and a total of 9,218 members cast their ballots.

The Alliance of Motion Picture and Television Producers (AMPTP), which represents the studios, issued a statement before the voting results were even announced, stating that the approval was “inevitable” and urging continued talks to avoid a work stoppage.

Although strike-authorization votes are a common union tactic to pressure employers during labor negotiations, it does not automatically mean that a strike will occur. It only authorizes the union to call for a strike if negotiations break down.

The WGA’s last strike in 2007-08 lasted for 100 days, bringing Hollywood production to a halt. The strike was due to compensation disputes for “new media” as internet streaming began to reshape the entertainment industry. Various estimates suggest that the strike cost the local economy between $2 billion and $3 billion.

The WGA has issued “strike rules” in case a walkout is called. The union has instructed its members to stop writing for struck studios and not to conduct any negotiations on future writing projects. The rules also direct union members to honor all WGA picket lines, perform assigned “strike-support” duties, and inform the union of any “strikebreaking activity.”

The union’s demands for higher pay and residuals, especially over streaming content, are on the bargaining table. The WGA is calling for higher residual pay for streaming programs that have higher viewership, rather than the existing model that pays a standard rate regardless of a show’s success. The union is also calling for industry standards on the number of writers assigned to each show.

The studios have pushed back on some union claims, citing budget constraints and the ongoing layoffs at the Walt Disney Co. as examples. They also note that writers’ residuals have increased in recent years, driven mainly by earnings through “new media.”

As negotiations continue, Hollywood holds its breath, hoping for a positive outcome to keep production flowing and audiences entertained.