Fear grips Hollywood as spectre of strikes loom large

"The mood of the town? Fear. Absolute fear. Deadly fear," Vance Van Petten, head of the Producers Guild of America, told Entertainment Weekly magazine. If the most pessimistic predictions come to pass, 11,000 screenwriters will write the first scene on May 1, the day their contract expires.

More than 100,000 actors would follow after June 30. The unions have tried to play down the apocalyptic rumors. Screen Actors’ Guild spokesman Greg Krizman calls them "extremely premature," since negotiations between movie and television producers do not begin until March. "There are no grounds, no basis for all the speculation that is taking place," Krizman said.

"We certainly are letting our members know this is going to be a serious negotiation and you should look to your financial planning accordingly," adds Sheryl Rhoden, spokeswoman for the Writers Guild of America (WGA). "But at the same time the fear is a little bit over the edge," she says.

All this commotion was caused by the commercial actors’ prolonged strike, which has paralyzed television and radio commercials’ production since May 1. At issue is the "pay-per-play" system for network television ads, residual pay for cable television ads, and monitoring radio, television and Internet commercials.

Traditionally, actors have been paid every time a commercial airs. But advertisers want to end the system in favor of flat rates. And while that strike is not directly related to the newly threatened stoppages, the issues are similar: the redistribution and reuse of screenwriters’ and actors’ work in the burgeoning cable and Internet market, as well as overseas.

"The formulas that give residuals to both the actors and the writers were created 30 years ago," Rhoden says. "At that time the foreign markets were much much smaller." "Now, there’s more competition, the companies are making more money than ever in those markets and they have not over time given a fair share of that to the artists that created the product."

Back in 1988 the WGA – a Union known for its militancy – declared one of the costliest strikes in Hollywood history, which lasted 154 days, studios were forced to delay the fall television season, and the industry lost an estimated $ 500 million. If screenwriters and actors aren’t ready for their close-up by next year, television will be the first victim.

Starting in fall, networks could have to fill holes left in schedules with re-runs, news programing or reality shows a la "Survivor," last summer’s TV phenomenon. Movie production would be hit later, as long as new studio productions don’t run out.

Exhibitors could be forced to show older Hollywood movies, or even (gasp!) independent or foreign films. Experts estimate the strike could last between four and 16 months, which would have a serious impact on the tens of thousands of people whose salaries depend – directly or indirectly – on television and movies.

"If there’s a strike with the writers and the actors next year, the town will shut down," predicts Morrie Goldman of the Entertainment Industries Development Corporation, which puts the cost of such a strike at up to $ 50 million per day.

Some fear a production stoppage could intensify another industry problem, so-called "runaway production" to countries with cheaper costs or which offer tax and other incentives.

That is already happening with commercials, Goldman says. "Commercials are getting shot, but they are just not getting shot in Los Angeles, Chicago or New York," he says. "They are being shot in Canada or in Europe."