California has suffered a significant economic loss of approximately $5 billion due to the ongoing work disputes between the Alliance of Motion Picture and Television Producers (AMPTP) and the writers and actors unions, leading to independent strikes. This information was revealed by Kevin Klowden, the chief global strategist at the Milken Institute, a renowned nonprofit think tank.

The strikes, which involve both the Writers Guild of America (WGA) and the Screen Actors Guild‐American Federation of Television and Radio Artists (SAG-AFTRA), have effectively halted new production activities within the entertainment industry. This industry has a prominent presence in California, particularly in the Los Angeles area. The writers union has been on strike since May, while the actors union joined the strike in July.

According to Klowden, the economic impact is not only felt by actors and writers directly involved in the strikes but also by various support service providers for TV and film production. These include caterers, dry cleaners, car rental companies, truckers, and other small businesses that rely on the industry.

“All these different people who provide support services that make productions happen – they’re getting nailed,” Klowden noted.

Although California has traditionally been a hub for the entertainment industry, other states in the U.S., such as New York and Georgia, also boast robust TV and film production infrastructures.

In May, Todd Holmes, a professor of entertainment industry management at California State Northridge, estimated that California had already lost at least $3 billion during the first 100 days of the strike.

“It could be even worse than the $3 billion,” Holmes cautioned in an interview with the LA Times.

In an earnings call earlier this week, Warner Bros. Discovery, one of the companies affiliated with AMPTP, revealed that the ongoing strikes have already cost them between $300 million and $500 million. The company admitted uncertainty regarding the end date of the strikes.

Read on: Disney faces mounting challenges, but its Hulu ‘overhang’ could resolve sooner than expected

Writers and Actors Strike Continues as WBD Expects Long-Term Financial Impact

The ongoing strikes by the Writers Guild of America (WGA) and Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) show no signs of resolution in the near future, according to a statement issued by WBD. While hoping for a prompt resolution, WBD acknowledges that it is impossible to predict the end date of these strikes, which it now expects will have a lasting financial impact through the end of 2023.

The Key Issues

The strikes have been triggered by a variety of concerns, including disputes related to artificial intelligence (AI), residual payments, and the length of employment agreements. The Alliance of Motion Picture and Television Producers (AMPTP), composed of major movie studios and streaming companies such as Netflix, Disney, Universal Pictures, WBD, and Sony Pictures, finds itself on the receiving end of these strikes.

Residual Payments Under Scrutiny

Throughout the course of the strike, members of the unions have taken to social media to express their frustrations. One notable example is Kamil McFadden, known for his roles in movies like Grown Ups 2 and K.C. Undercover, who shared a video showcasing his minuscule residual payments, often amounting to less than a dollar.

Similarly, Spencer Rothbell, a writer who worked on acclaimed shows like Clarence and Victor & Valentino, posted a screenshot revealing a residual payment he received – a mere $8.57.

Financial Hardships and Lack of Health Coverage

Members of SAG-AFTRA claim that approximately 87% of them earn less than $26,000 per year from their acting jobs. This low income renders them ineligible for health coverage through the union, further exacerbating their financial hardships. What makes this strike particularly significant is that it marks the first time since 1960 that the two unions have independently called for strikes.

Impact on Movie Release Dates

The absence of agreements between the unions and AMPTP has had a cascading effect on the release schedules of major films. Highly anticipated movies such as “Deadpool 3,” “Dune: Part Two,” and “Mission: Impossible—Dead Reckoning, Part Two” have seen their release dates pushed back due to the strike.

Read on: Netflix criticized for posting AI jobs paying up to $900,000 while writers and actors are on strike

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