Hollywood actors join writers on strike: ‘There's a lot of bitterness and mistrust’

Hollywood actors are joining TV and film writers on the picket lines.

Every three years, the entertainment industry's various unions negotiate new contracts opposite the Alliance of Motion Picture and Television Producers, which represents studios like Warner Bros. Discovery and Universal Pictures and streaming networks like Amazon and Hulu. Contracts cover the parameters of workers' varied jobs and ensure pay is adequate, health and safety standards are met, and so on.

The Screen Actors Guild-American Federation of Television and Radio Artists, the union which represents various performers, entered negotiations surrounding actors' film and television work on June 7 with their contracts set to expire on June 30. Their negotiations ongoing, the organizations agreed to extend actors' contracts until July 12.  

But on July 13, SAG-AFTRA announced the two parties could not come to an agreement. Later that day, the union officially issued a strike order for its actors.

Here's what that means for both them and the industry.

The bottom line of these conversations is in the age of streaming, "the business has fundamentally changed and therefore requires a new way of compensating people," says Paul Hardart, director of New York University's Entertainment, Media and Technology Program.

On a granular level, there are several sticking points on which actors and studios could not ultimately agree. They include the following:

• Wage increases: "SAG-AFTRA wants increases that make up for the high inflation we've had recently," says entertainment lawyer Jonathan Handel. Wages differ depending on performer, but a non-background actor's minimum rate for a film with a total budget greater than $2,000,000 was $3,756 per week at the end of the last contract.

• Residuals in streaming: "There is a residuals formula already but the union wants an additional formula that would apply to shows that are successful and would reward the actors in excess," says Handel.

• AI use: "The actors don't want to be displaced by technology and certainly not without being compensated for it," says Handel. AI is currently being used for effects like de-aging an actor, but according to SAG-AFTRA national executive director and chief negotiator Duncan Crabtree-Ireland, among studios' suggestions for AI is the ability to use the likeness of background actors who've been paid for one day's work in perpetuity without pay or consent. The AMPTP has refuted this.

• Virtual auditions: Historically, actors would go to a physical location to audition. Now, "you tape an audition yourself at home," says Handel. That's meant actors have to take on the job of camera person and editor. They have to makes sure there's someone to read opposite them and that there's an adequate space in their homes to record. "People are finding themselves spending money to apply for jobs," says Handel.

Virtual auditions are a sticking point for actor Tallie Medel, who's appeared in films like "Everything Everywhere All At Once" and goes by they/them pronouns. Medel does at least one self-tape per week. If they need to rent out a studio space to do so, those can cost $15 to $40 per hour, they say. "There has to be some sort of compensation for the amount of work we're putting into the self-tapes," they say.

As with writers, actors' wages account for taxes, team members such as managers (agents get their own commission on top of actor pay) and for the unpredictability of their industry. "You're working from job to job," says Medel. "There are periods in between where you are not working."

"It's a risk."

As far as what the strike means for actors' day-to-day work, they're barred from doing the various duties of their jobs including acting, singing and dancing on camera and voice acting and narrating off camera. They're also barred from doing any promotion or publicity surrounding their forthcoming projects. "Oppenheimer" actors left the film's London premiere before its screening on July 13.

As it pertains to the rest of the industry, any remaining operations will cease for the time being. "One estimate is that 80% of production is shut down" already, says Handel. "So the remaining 20% will be shut down."

And that's "going to harm the legacy companies [like Paramount] more than Netflix," says Handel. First, streaming giants like Netflix don't necessarily need to rely on American talent and can produce internationally. Second, with production halted, streamers' costs go down. But because of their subscription model, "revenues remain the same," says Hardart.

For TV and film writers, who've been striking since May 2, having yet another critical union in their business join the fight adds leverage. SAG-AFTRA "is 15 times the size of the Writers Guild," says Handel. "And so that's going to bring a lot of heft, a lot of wind in the sails and energy to the picket lines."

But that won't necessarily mean either strike ends anytime soon. "There's a lot of bitterness and mistrust at this point," says Handel, "both in terms of the actors and the studio alliance and also the writers and the studio alliance."

In a statement to CNBC Make It, the AMPTP said the following:

"We are deeply disappointed that SAG-AFTRA has decided to walk away from negotiations. This is the Union's choice, not ours. In doing so, it has dismissed our offer of historic pay and residual increases, substantially higher caps on pension and health contributions, audition protections, shortened series option periods, a groundbreaking AI proposal that protects actors' digital likenesses, and more."

Both Handel and Hardart predict the strikes will continue into the fall. "I would hope that sometime in late September or early October that they'll come to some resolution," says Hardart.

As the industry comes to even more of a standstill, crew members like cinematographers and set makeup artists cease working as well. In May 2022, there were more than 28,000 camera operators, more than 3,000 set designers and more than 1,000 makeup artists working in film and television, among others, according to the Bureau of Labor Statistics.

Moreover, the ecosystems around film and TV suffer. "A dollar that an actor or writer does not get paid is a dollar that they don't spend at a restaurant and that becomes a dollar that the waiter doesn't receive," says Handel.

"There's a ripple effect to the economy," he says.

Disclosure: NBCUniversal is the parent company of NBC and CNBC.

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