In Hollywood, the fade to black begins

By Rachel Abramowitz, Maria Elena Fernandez and Meg James
Los Angeles Times Staff Writers

December 9, 2007

Like a rolling blackout, Hollywood is shutting down.

Fallout from Friday's collapse of negotiations for a new contract between writers and studios will in the weeks and months ahead leave audiences with dwindling entertainment choices.

If the five-week-long strike by the Writers Guild of America continues, it's also poised to affect the awards season, the annual ritual of self-congratulation and promotion that runs through the winter.

And in short order, both the television networks and the movie studios will begin to suffer financial pain as the lack of original content prompts viewers to flee -- with advertisers not far behind.

"It's a dangerous time for the industry," said producer Richard Zanuck, who ran the studio at Fox for nearly a decade and whose current movie, "Yes Man," starring Jim Carrey, has been a target of picketing. "That doesn't mean that the companies have to give away the store to keep things alive or just stay afloat, but I think it's just a very dangerous time."

Both sides left the table Friday with a lot of rancor, and no new talks are scheduled. Further complicating any resolution is the looming prospect that the Directors Guild of America, whose contract expires in June, could reach an early agreement with the studios.

From movie stars to hair stylists, the Hollywood food-chain economy is highly integrated, with a disruption at one end causing dislocation at the other. Without original TV episodes or movie scripts ready to shoot, the supply of new content will quickly dwindle, leaving audiences with nothing to watch except reruns, reality TV shows and, as happened after the 1988 strike, a wave of films that are likely to be critically disappointing.

Although the studios are banking that they can hold out for at least six months, the long-term effect could be enormous not only for the entertainment industry but also for the region. Hollywood's stream of products contributes nearly 7% -- an estimated $30 billion annually -- to L.A. County's $442-billion economy, according to the Los Angeles County Economic Development Corp. If the strike continues into next year, which seems possible now, it will result in the loss of $1 billion to the local economy, the development group estimates.

Beyond the bottom line, there is the question of what a long and fractious strike would do to the connective tissue of a town built on relationships. Certainly, tensions are rising.

After the talks broke off Friday, Jon Robin Baitz, creator and executive producer of ABC's "Brothers and Sisters," put it this way: "There's a humanistic tragedy in how we are all being forced to follow scripts that have tragic implications for both sides and the end of very good relationships."

Meanwhile, the kleig lights are being turned off in the entertainment industry.

First to disappear were new episodes of Letterman, Leno, Stewart and Colbert. Then scripted shows, including "The Office" and "Desperate Housewives," stopped shooting new episodes.

Over the last several weeks, the Writers Guild walkout also has forced the postponement -- and in one case, recasting -- of several prominent motion pictures. Because their producers did not think their screenplays were ready for filming, Ron Howard's "Angels & Demons," starring Tom Hanks; Oliver Stone's "Pinkville"; and Mira Nair's "Shantaram," starring Johnny Depp, all have been forced to postpone production, and filming of the next installment of the highly profitable James Bond franchise could be in jeopardy.

Brad Pitt left the movie "State of Play" because he felt the script needed revisions that, because of the strike, could not be made; Universal Studios last week recast his role with Russell Crowe.

More immediately, the strike leaves such televised events as the Golden Globes, the Grammys, the People's Choice Awards, the Screen Actors Guild Awards and, of course, the Oscars in limbo.

No one expects the shows to be canceled, but anxiety is rife as the various organizations try to figure out how to put on essentially a comedy-and-variety show . . . without writers. And soon, all of the writers and other talent will have to decide for themselves whether they want to attend the shows, cross a picket line or attend galas with hard-line studio executives.

There are ways around it, of course. In early December, the WGA issued two waivers to the strike. One would allow Elizabeth Taylor and James Earl Jones to perform on the Paramount Pictures lot for an AIDs fundraiser. The other is for the Kennedy Center Honors, slated to air on CBS on Dec. 26.

But without getting a waiver, such shows as the Golden Globes would be treated as any other "struck company," said WGA spokesman Gregg Mitchell, adding that any member working on it would be considered to be crossing the line. The red carpets could also be potential targets for picketing, leading to unpleasant scenarios of stars discussing their Prada and Escada gowns to chants of "Peter Chernin, what ya earnin'?" (Chernin is president of News Corp., which owns the Fox studio and Fox network.)

Mitchell said the WGA issues waivers on a case-by-case basis and hasn't decided what it's going to do about the awards shows.

Still, awards strategists believe that the only shows that might be able to get waivers are the Academy Awards and perhaps the SAG Awards, because the Screen Actors Guild is perceived to be an ally of the Writers Guild. The Golden Globes will certainly be the first major awards show to face this hurdle. The nominees will be announced Dec. 13, and the show will air a month later.

A prolonged strike could cost the television networks tens -- if not hundreds -- of millions of dollars in lost advertising revenue. Most of the major networks were already off to a rocky start with the new TV season. Their shows are suffering lower ratings than last year.

Fox is the only broadcast network to post larger audiences thus far this season, and next month it will bring back its ratings juggernaut "American Idol," which doesn't rely on WGA writers. However, the network has decided to keep its popular drama "24" off the air until it can complete a full season. The fate of ABC's "Lost," which was scheduled to premiere in February, is yet to be determined.

But the other networks, including NBC, CBS and ABC, could suffer even further audience erosion if they air months of reruns and less-popular reality shows. They also would face the prospect of returning millions of dollars to advertisers for prime-time spots that the advertisers ordered in the spring.

At the moment, the networks insist that everything is fine. Asked at a Wall Street media conference last week if CBS is having to give back commercial time to advertisers to make up for a shortfall in ratings, the company's chief executive, Leslie Moonves, said, "No, we haven't. There were some make-goods left over from last year that we've dealt with. . . . So we're doing fine even with the ratings decline."

But the situation will only get more precarious the longer the strike goes on. It could effectively end production of new episodes for this year's television season. Most producers had turned in 10 to 12 episodes of their 22-episode season order when writers cleaned out their desks early last month. If the strike lasts into February, it could disrupt the pilot season, potentially compromising next year's TV season.

The strike could also hasten the departure of more advertising dollars from the networks to the Internet. Blossoming cable TV channels benefited enormously from the 22-week writers strike in 1988, attracting both viewers and advertisers who were desperate for something new to watch.

Although top media executives have told Wall Street that financial damage from the strike would be minimal, that optimistic view probably will fade as the strike drags on. Jack Myers, publisher of the media industry trade report jackmyers.com, said there haven't been any "meaningful losses" yet but estimated the networks could collectively lose $600 million if the walkout continues into next summer. The broadcast networks alone sell more than $9.3 billion a year in advertising.