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Hollywood Bracing For Yet Another Strike

The Screen Actors Guild and producers association (the AMPTP) are in their 24th day of talks, hoping to renegotiate their contract before it expires on June 30.

The two sides returned to the bargaining table after last week SAG's sister union,AFTRA, finalized its contract. The stakes are even higher than the writers' strike, which shut down TV production, as this would also shut down all the major studios movies. On the heels of a 100-day writers strike that cost the LA economy up to $3 billion dollars, everyone's hoping the two sides can reach a resolution.

But even if the two sides come to a resolution and there is no strike, Hollywood will still suffer a defacto work stoppage. The studios have been working hard to prepare for a strike, rushing to finish shooting films and TV shows ahead of time, making sure they don't have to shoot anything big in July.

That means, no matter what, July is going to be incredibly quiet, with no big studios shooting. That of course hurts the people at the bottom of the totem pole. Los Angeles Economic Development Corporation's Chief Economist Jack Kyser says he expects the LA area to lose at least $500 million in business in July due to the labor conflict, even without a strike.

The key sticking point is digital revenues--which was also the main source of conflict when the Writers and Directors guilds were renegotiating their contracts. The actors do have some unique issues; with the rise of ad-skipping DVRs pushing the adoption of product placement, they're pushing for more control, and revenues from, product integration.

They argue that if an actor does an in-show commercial for a product, it not only prevents him or her from taping a traditional commercial for a competitor product, but it also means he or she can't be part of product placement for a competitor product. As you can imagine the list goes on and on.

If there were a strike, some shooting could continue. About 300 independent producers have gotten waivers from SAG to move forward with their productions. This means only true independents who aren't associated with the AMPTP--the "independent" divisions of the movie studios, like Fox Searchlight or Universal's Focus Features--don't count.

A strike would give indies a better chance at snagging stars for their films. But with the independent film world in so much turmoil for other reasons, this doesn't necessarily give such a big advantage. Everyone--even the independents--is hoping this strike, which could really cripple Hollywood, doesn't happen.

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.