As the Writers Guild of America and the Alliance of Motion Picture and Television Producers made arrangements to continue their labor talks on April 17, the City of Los Angeles and the entertainment industry wait with baited breath for the outcome.
The talks resume after a six-week hiatus. Negotiations broke down in March over how much residual pay the studios would owe writers when films or television shows are distributed internationally. The WGA also expressed dissatisfaction with the producers' offer on increases in video and DVD residuals.
The producers have consistently stated that rising costs in production and a dwindling audience base make it difficult for the studios to make a profit.
The WGA contract deadline is May 1.
The national economic slowdown has both sides wary of the financial impact a strike could place on the entertainment industry.
This should not be a reason for studios to wriggle out of some financial responsibilities, said WGA spokeswoman Cheryl Rhoden.
"Historically, the entertainment industry has not been impacted as strongly by economic slowdowns," she told The Associated Press. "It has consistently remained on the leading edge of economic recovery."
The threat of a strike has put up red flares throughout Los Angeles. The city has commissioned a study to examine the impact a strike by writers and the actors would have on the local economy, a worried Mayor Richard Riordan announced Monday.
The Los Angeles Economic Development Corp. has already estimated a $2 billion a month loss if the strikes occur.
"Los Angeles is the entertainment capital of the world, and the entertainment industry has been a driving force in our city's economic recovery," Riordan told the Hollywood Reporter. "There is no question there will be economic harm in the event of a strike. ... Any strike would devastate thousands of innocent victims who are not represented at the bargaining table, across a range of industries. We also must acknowledge that a strike will cause tax revenue shortfalls that will affect city services like police protection, sanitation, fire and transportation and other government services as well."
Riordan said "no good" would come from the potential strikes.
"Both the studios and the guild have much to lose and little to gain," he said. "Working toward a compromise and avoiding a strike is both the smart thing to do and the right thing to do.
"I hope that by gathering and publicizing solid information on the impact of strikes, I will be able to persuade all parties to find common ground and avert a strike."
The Milken Institute, a nonpartisan economic think tank, and Sebago Associates, a public policy consulting firm, will perform the study.
The WGA is "very open" to the mayor's office becoming involved, Rhoden said Tuesday, given that any strike would have a regional and community level economic impact. "This impact will occur if there is a work stoppage and has already begun to occur because the artists' income has not kept pace with the changing economy," she said. "That impact is more invisible, but nonetheless effects the restaurants, dry cleaners and all local businesses in a significant way."