What to know about the potential actors strike looming over Hollywood

Last-ditch mediations between major film studios and the union representing actors failed on Wednesday, making a strike of Hollywood talent likely imminent.

SAG-AFTRA, the largest union for actors representing 160,000 people, including Hollywood’s biggest stars, has been in negotiations with movie studios on renewing the union’s contract for months.

Their contract expired at midnight on Wednesday, and union leaders were set to meet Thursday to consider authorizing a strike, which could begin immediately.

Why strike?

The union is demanding higher compensation and mandates to limit the use of artificial intelligence in the industry. The union said that the rise of streaming and economic inflation has lowered members’ wages.

Before streaming, much of successful actors’ income came from TV and movie royalties, payouts given when reruns of a show or movie are shown. But those royalties have dramatically decreased as TV revenues fall due to the rise of streaming.

SAG-AFTRA wants to re-balance royalties to better compensate actors for their roles in streaming productions, as well as higher pay minimums.

Artificial intelligence also poses a risk to actors, the union says, as members fear their likenesses could be used without their consent. 

Additionally, the union is demanding increased support for pension and health funds as well as ending “self-taped auditions,” an increasingly common practice that used to be handled exclusively by studios.

How can they avoid a strike?

Union and studio leaders met with mediators on Wednesday to attempt a last-minute deal. The two sides, however, were still far apart on streaming residuals and increasing pay minimums, according to Variety. 

In a statement Tuesday, SAG-AFTRA said the studios “abused our trust and damaged the respect we have for them in this process.” 

In early June, 98 percent of the union’s members authorized a strike if a deal could not be reached.

What happens if actors do strike?

If they strike, the actors will join the 11,500-member strong Writers Guild of America, which has been on strike since May over similar demands. The two unions have not striked at the same time since 1960.

A strike would cause the movie industry to come to a near-standstill, with no actors to film new productions or writers to plan future ones. The union representing directors is considering a tentative deal that would avoid its own strike.

In a CNBC interview Thursday, Disney CEO Bob Iger said the effects of an actors strike would “have huge collateral damage.”

“We managed as an industry to negotiate a very good deal with the Directors Guild that reflects the value that the directors contribute to this great business,” Iger said. 

“We wanted to do the same thing with the writers, and we’d like to do the same thing with the actors. There’s a level of expectation that they have that is just not realistic, and they are adding to a set of challenges that this business is already facing, that is quite frankly, very disruptive,” he added.

The last SAG-AFTRA strike was in 1980 and lasted more than three months. In a letter last month, more than 1,000 actors including stars Jennifer Lawrence, Meryl Streep and Ben Stiller affirmed they are prepared to strike.

“We feel that our wages, our craft, our creative freedom, and the power of our union have all been undermined in the last decade. We need to reverse those trajectories,” the actors wrote in the letter. 

“This is not a moment to meet in the middle.”

—Updated Thursday at 2:49 p.m.