Contract talks break down between Hollywood actors, studios

By Lisa Richwine

LOS ANGELES (Reuters) -Negotiations between Hollywood studios and the SAG-AFTRA actors' union were suspended on Wednesday as the two sides clashed over streaming revenue, the use of artificial intelligence and other issues at the core of a three-month work stoppage.

The breakdown in talks interrupted attempts to end labor tensions that have put most U.S.-based film and television production on hold, cost the California economy billions and left thousands of crew members without work.

SAG-AFTRA has been on strike since July. The union resumed negotiations with studios last week after the Writers Guild of America (WGA) ended its work stoppage.

The WGA deal had raised hopes for a quick resolution with actors until the Alliance of Motion Picture and Television Producers (AMPTP), late on Wednesday, said talks were suspended once it reviewed the most recent union proposal.

"After meaningful conversations, it is clear that the gap between the AMPTP and SAG-AFTRA is too great, and conversations are no longer moving us in a productive direction," said the AMPTP, which represents Netflix (NASDAQ:NFLX), Walt Disney (NYSE:DIS) and other media companies.

SAG-AFTRA, in a letter to members issued early Thursday, said it had negotiated "in good faith" with studios "despite the fact that last week they presented an offer that was, shockingly, worth less than they proposed before the strike began."

"It is with profound disappointment that we report the industry CEOs have walked away from the bargaining table after refusing to counter our latest offer," union negotiators said.

One issue of contention is a SAG-AFTRA demand for a share of streaming revenue delivered as a bonus to cast members. The AMPTP said the proposal "would cost more than $800 million per year, which would create an untenable economic burden."

SAG-AFTRA countered that the AMPTP had overstated the cost by 60% and accused the studios of "bully tactics."

The union also said studios "refuse to protect performers from being replaced by AI," while the AMPTP said it had promised to obtain actors' consent before using any digital replicas of their likenesses.

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On issues such as general wage increases and residuals for high-budget streaming shows, the AMPTP said it had offered the same terms that were ratified by the WGA and the Directors Guild of America, but that SAG-AFTRA rejected them.

Members of the WGA approved a new three-year contract with major studios this week, five months after the union called a strike. The new contract provides pay raises, some protections around AI use and other gains.