WGA, SAG, DGA Strike Over New Media Could Cripple Hollywood

Three unions may join forces for a piece of the "new media pie."

ByABC News
September 18, 2007, 2:43 PM

Sept. 17 -- A monster looms over the Hollywood sign, and it could do more damage to Tinseltown than any rubber-suit lizard or CGI nightmare. It's the dreaded megastrike -- a work stoppage next summer that could cripple the entertainment industry if three major unions join forces and picket at the same time for a piece of the "new media pie."

Emerging online distribution methods are fueling the dispute, as Hollywood writers demand residual compensation for TV and film content sold through iTunes and other services. Producers want to delay those royalty payments, calling the technologies too new to know how much actual profits they generate.

The Writers Guild of America, West (or WGA), the Screen Actors Guild and the Directors Guild of America each want to tap the new revenue streams. If they decide on a simultaneous strike, the entire entertainment industry -- movies, TV, videogame shoots, online productions, etc. -- grinds to a halt. Careers and companies could be ruined.

Robyn Heath, an executive with Tom Wagner and Mark Cuban's 2929 Entertainment, said she and her insider friends are very much aware of the professional threat.

"A lot of us, at least the people I talk to daily, are definitely worried about losing their jobs, but they also believe that the talent does deserve a piece of the new media pie," Heath said. "We just all hope that the issues will get worked out fairly, but without too much delay."

In talks underway between producers and the WGA, the guild is looking to seal a new three-year deal before Oct. 31. The current contract was put in place in 2001, narrowly averting what would have been the first WGA strike since 1988, when a 22-day walkout cost Hollywood an estimated $500 million.

The two sides waited until the zero hour in 2001 to settle their dispute, finding middle ground in a last-minute deal that upped writers' pay for cable and DVD outlets. At the time, speculators said the guild settled because its rank-and-file membership was reluctant to vote for a strike.