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Hollywood’s largest film and TV studios are halting payments to some producers, an escalation of the writers’ strike and a sign they expect the industry’s labor dispute to persist for a while, according to people familiar with the matter.
The Writers Guild of America, which represents some 11,500 screenwriters nationally, went on strike Tuesday, seeking higher pay and changes in their work rules.
With the writers on the picket line, studios are now reducing payments to producers, the executives who create films and TV shows, employ the strikers and often take part in the screenwriting themselves.
Sony Group has stopped paying screenwriters who have production deals with the studio, said two of the people, who asked not to be identified because the discussions are private. The studio will continue to pay the staff at their companies and will pay any writers who do produce work, the people said. A representative for Sony declined to comment.
Other studios are expected to follow Sony’s move, as the writers with whom they have deals aren’t working and are thus not fulfilling the terms.
If the strike drags on for months, media companies will use the walkout as an opportunity to cut costs and alter deals signed during the boom years of 2016 to 2021.
At the time, the entertainment industry was chasing talent to create more programming for streaming services. Studios lured writers and producers with long-term agreements that covered their offices and other expenses in exchange for exclusive access to their film and TV ideas.
The deals for some top writer-producers reached into the hundreds of millions of dollars. But Wall Street has since soured on the streaming business after years of losses. So-called “force majeure language in some deals may allow studios to terminate agreements if the principals don’t show up for work, attorneys familiar with the contracts say.
The strike has left some writers confused as to their responsibilities. Many writers, such as Shonda Rhimes, Alex Kurtzman and Vince Gilligan, are also producers. Writers who also work as directors, producers or actors are allowed to perform their other duties, according to the guild. Yet the union “strongly recommends they not cross a picket line or enter the premises of a company subject to the strike, the guild says on its website.
Paramount Global, the parent of CBS, has told writers who also produce that it expects them to keep working as producers, as they are required to do under their contracts, said the people. The companies have also offered to protect their writer-producers against possible losses. A spokesperson for Paramount declined to comment.
The Alliance of Motion Picture & Television Studios, which represents the entertainment companies in negotiations for a new contract with the writers, said its proposals have been “generous. The guild and the studios are far apart on most terms, including minimum salaries and the use of artificial intelligence.
