The double strike that shut down Hollywood in 2023 is still fresh in the minds of countless entertainment workers and execs still bruising from its aftereffects. But in just a week’s time, the industry’s unions will once again head to the negotiating table with the studios and their labor rep, the Alliance of Motion Picture and Television Producers (AMPTP), to work out a new contract.
Though its contract doesn’t expire until the end of June, SAG-AFTRA has moved to be the first to talk with the AMPTP, with recently elected president and negotiating committee veteran Sean Astin leading the talks alongside National Executive Director Duncan Crabtree-Ireland.
Leading the studio side will be a familiar face for the actors’ union: Greg Hessinger, the former executive director of the Screen Actors Guild who joined last March to replace the retiring Carol Lombardini. The two sides are expected to negotiate for at least four weeks starting Feb. 9.
“We look forward to working collaboratively with our partners at SAG-AFTRA as we commence formal bargaining. By taking the time to thoughtfully engage on the challenges confronting our industry, we are optimistic that, together, we can reach a fair deal that reflects our shared commitment to supporting our industry’s talented performers and promoting long-term stability,” the AMPTP said in a statement.
With peak TV far in Hollywood’s rear view mirror and production rates far below what they were before the strikes — shoot days in Los Angeles County in 2025 sank 46.5% compared to 2022, according to FilmLA — thousands of entertainment workers from actors to writers to crew members have struggled to find employment even after the industry got back up and running. Many of the working class members of Hollywood’s unions were forced to burn through financial reserves to get through the strikes, and the lower number of jobs in Los Angeles and other production hubs have made it harder to recover.
That makes avoiding a strike on consecutive contract cycles all the more crucial. But to get there, SAG-AFTRA will be looking for more protections against the exploitation of its actors by artificial intelligence and to build upon the new model for streaming compensation that brought the 2023 work stoppage to an end. Also in the mix are talks for a potentially longer contract cycle as studios seek more long-term financial stability.
While SAG-AFTRA and AMPTP declined to comment for this story, insiders on both sides told TheWrap there’s cautious optimism that a deal could be reached, though Crabtree-Ireland said at a panel at the Consumer Electronics Show last month that the union would not accept a deal that did not have significant improvements in various categories that are major concerns for actors, the most prominent being AI protections and streaming compensation, which were at the core of the prior strikes, which dragged on for 191 days.
“I want to be crystal clear: We are not going to accept a deal that is not fair to our members,” he said. “There is no reason there should need to be a strike because these companies should come to the table in good faith, as we are.”
The AI front
Since the strikes, SAG-AFTRA has used contract talks for forms of media from commercials to video games to establish a new normal of “consent and compensation” around AI, making sure performers had control over whether studios could use their work and likeness to make AI replicas and ensured they got paid for it.
Now, along with building that compensation model, the talks with AMPTP are expected to focus on synthetic performers, the official term used for AI-generated “actors” like Tilly Norwood, whose unveiling last year by AI company Particle6 enraged many actors in Hollywood and raised fears that such performers would try to replace human performance.
Some AI experts have told TheWrap that the buzz around Tilly has been overblown, and that technology is still not advanced enough to create a synthetic performer that would be sufficient for a Hollywood film. But SAG-AFTRA can’t wait for the tech to advance further before acting, so how do they get ahead on this issue?
The answer lies in the commercials contract, where the union negotiated a key contract clause in which any advertisement production that uses a synthetic performer for a job that could have been done by a union actor must pay a royalty equivalent to what they would have paid to a union actor for that job. Such royalties could be used as contributions to the guild’s health plan or as part of a form of union-wide compensation similar to the “Robin Hood” fund established around streaming.
SAG-AFTRA negotiated a similar rule in its record label contract, closing a potential loophole by requiring companies to pay streaming royalties for a synthetic voice track the same as they would for a human voice track. In short, SAG-AFTRA cannot outright ban the use of artificial intelligence, but they can discourage its use by preventing productions from trying to use synthetic performers to avoid paying real actors.
That’s not the only area where SAG-AFTRA and AMPTP may be exploring uncharted territory. Jonathan Handel, entertainment attorney at Feig Finkel LLP, says he expects that the issue of compensation for performers’ work in training models will be discussed.
“It is a question that the actors will want answered: If a performer’s work is used to train one of these bespoke AI models that studios are developing, are they entitled to compensation?” Handel said. Studio insiders have told TheWrap that there will likely be significant pushback from the AMPTP on that front, as there is no direct revenue coming from merely training AI models as opposed to actual media sold to the public.
But Scott Mann, filmmaker and founder of Flawless AI, believes that there is a form of revenue that AI could bring to studios: licensing media to AI companies that they could legally use to train their models. While studios have waded into direct business partnerships with AI companies such as the investment deal between OpenAI and Disney that will see user-generated AI clips of the studio’s animated characters on Disney+, that is different from one in which AI companies directly pay studios to train on their media libraries.
And if such a deal were to be made, will unions be able to ensure consent and compensation for their members?
“Both the studios and the guilds need to agree on a residual system that allows for this technology to be used in certain forms and contexts. They have the opportunity right now to take a big bite out of what could be a lucrative revenue stream,” Mann said. “Third party licensing for AI is going to become the next big thing, and everyone in Hollywood needs to make sure there is an ethical and fair system for how it is used.”
Streaming Compensation
But as high-profile as the AI issue is, that was not the reason why the 2023 strikes lasted for so long. A compensation model for streaming was the primary issue in which studios were not willing to budge.
What the two sides ended up agreeing on was a performance-based model in which any film or TV show that is watched by 20% of a streaming service’s subscriber base pays royalties, 75% go to the title’s performers and the rest to a fund that would be shared among all film and television performers.
It took nearly two years after that deal was struck for the fund to get up and running, but with roughly six months of data, SAG-AFTRA will try to fulfill its promise to members to build on this new form of compensation. This could take the form of lowering the viewership percentage threshold for a title to qualify for the performance royalty or increasing the amount of those royalties.
Either way, the performance bonus is not a direct replacement for the linear TV residuals that kept actors paid for decades. While the bonus fund has established a way for creatives to share in the success of a streaming hit and has given unions a foothold inside the vaults of viewership data that the likes of Netflix have fiercely guarded, it is not the same as a structure in which every show and movie’s performance on television yields a residual payment. The decline of those residuals with the decline of linear TV has contributed to the financial pressure working class actors feel. Compounding that pressure are the shorter episode orders of the streaming era and the post-peak TV decline in greenlit productions.
Longer Contract Cycles
A new wrinkle emerged last month when Deadline reported that the AMPTP will be seeking a five-year contract cycle, meaning that the next round of negotiations with SAG-AFTRA, the Directors Guild and the Writers Guild would come in 2031.
Two studio-side sources told TheWrap that with pressure increasing to make streaming services profitable and to fulfill pledges to theaters to ramp up movie production, the AMPTP studios want 2026 to be the last year for this decade that they have to worry about a work stoppage that could cause the cost of major productions to spiral.
“There were many projects that got greenlit but didn’t start shooting in 2023, and even after the strike ended, they just never got off the ground,” said one executive who asked to remain anonymous. “For some it was actor schedules. For others it was because they lost the shooting location. I think if you’re in studio production, that worry’s going to be in the back of our minds every time a labor contract is up for renewal.”
While the three-year contract cycles in Hollywood have enabled unions to keep up with the rapid changes in entertainment, not every union has such frequent negotiations. In professional sports, contract talks range from five years for Major League Baseball to ten years for the NFL. Even in blue-collar unions, there are lengthier contracts like the International Longshore and Warehouse Union, which has a six-year contract.
Having lengthier labor contracts, the studios argue, would provide more stability for them to plan out more films and TV shows and increase employment for creatives. Their primary offer in exchange for those longer contracts will be an undisclosed but record level of contributions to the unions’ health plans, which would come at a time when healthcare costs are rapidly rising following the expiration of Affordable Care Act subsidies under the Trump Administration.
At CES, Crabtree-Ireland stayed mum about a potential contract length extension, saying it would be premature to comment before the first round of proposals are exchanged with the AMPTP. But labor insiders tell TheWrap that getting the unions to agree to a five-year deal won’t be as simple for the studios as giving more to the health plan.
One issue is, again, AI. At a time when advancements are only getting faster, the unions will likely be reluctant to give up a key means through which they are able to keep up with new forms of AI and prevent exploitation. Insiders on both sides have acknowledged that caveats to allow for more frequent discussions on AI protections would likely be necessary for any contract extension, though specifics on that won’t be known until talks begin.
Another complication relates to SAG-AFTRA specifically. As noted above with the union’s commercial contract, the various bargaining agreements that the actors union negotiates for the various facets of its 160,000+ members often influence one another. Changing the length of one contract would disrupt the system the union utilizes to negotiate effectively and would likely require changes in other areas.
One studio insider also acknowledged that SAG-AFTRA’s health plan is in a relatively more stable position in terms of funds compared to other unions, in part due to to a controversial move in 2020 in which members could no longer count residuals towards the minimum earnings requirement, leading to many retired actors to lose their union healthcare. The changes led to a lawsuit led by former SAG president Ed Asner which ended with a $15 million settlement for retirees who no longer qualified for the health plan.
The question, then, is what exactly the AMPTP could offer SAG-AFTRA beyond just greater health plan contributions to make a five-year contract cycle worth agreeing to. It’s an important one to ask, since however SAG-AFTRA goes could have huge ramifications for the WGA and DGA.
