Unnerved by mounting anger within the unions representing actors and writers, Hollywood studios are already girding for potential strikes two years before the first contract even expires.
Relations have become so frayed in the last two months with the Screen Actors Guild and the Writers Guild of America, West, that studios recently began drafting strike contingency plans that could be finalized by early next year.
"There is growing concern over the strident positions enunciated by the present leadership of the two guilds," said J. Nicholas Counter, who speaks for the major studios and is their chief negotiator. "The truth is we have no choice but to prepare for the worst possible scenario in the next round of bargaining."
Studios usually keep a lid on such tough talk this far in advance for fear of fueling rancor and dissent. If they launch contingency plans at all -- accelerating production, stockpiling scripts and shooting films outside the U.S. -- they typically wait to within a year of the time contracts run out.
But developments in September and October changed that. Both guilds elected slates that vowed to take a more confrontational stance with studios in trying to get them to budge on such long-festering issues as sharing a bigger slice of their lucrative DVD business. Both unions then jarred Hollywood by abruptly firing their top negotiators, both of whom were criticized for being too accommodating.
Actor Alan Rosenberg, who represents 120,000 SAG members as their new president, dismisses strike talk as scare mongering but warned that the union wouldn't be intimidated.
"We're going to stand up for our members and get our fair share, something we haven't done in a long time," he said.
Patric M. Verrone, president of the Writers Guild, West, which represents 9,500 TV and film scribes, said that although writers don't want a strike, the studios shouldn't underestimate their resolve to apply pressure through a walkout or other means.
"If they are preparing for the worst, I'm not sure they know what the worst is," he said.
The current studio deal with writers isn't up until November 2007; the actors' contract expires in June 2008.
Nonetheless, the Los Angeles County Economic Development Corp., a nonprofit group that tracks the local economy, is already taking the threat seriously. It is preparing a study that will heavily focus on the potential effect of any strike on the Southern California entertainment industry, which employs more than 250,000 people.
Hollywood labor leaders have been sharply divided in recent years on the effectiveness of strikes in an era when members are facing off against diversified media conglomerates such as Viacom Inc., Walt Disney Co., Time Warner Inc., General Electric Co.'s NBC Universal, News Corp. and Sony Corp.
Many of the industry's unions prefer to negotiate new pacts well before old ones expire. The theory is that studios will pay a higher price to buy labor peace if it eliminates uncertainty. Because studios must set pictures into motion so far in advance and lock up stars and directors before their rivals do, they are loath to let labor contracts run down to the wire because pulling the plug on projects is so costly.
But critics of early negotiating say Hollywood's unions have given away leverage by keeping a lid on the strike threat. The result, some experts believe, has been a simmering anger among the rank and file that is starting to boil over.
"The people at the studios can dismiss what's happening as the rants of a crazy majority, but they would be missing the point," said Brian Walton, a former Writers Guild executive director and SAG negotiator. "There are some basic inequities in the guild agreements that they should address."
SAG last struck against studios in 1980, for three months, over pay television and videocassette residuals. In 2000, the union struck against advertisers for six months in a dispute over pay for actors in commercials. Writers last struck against studios in 1988, for 22 weeks.
Tensions jumped after Rosenberg's coalition quickly fired Chief Executive Greg Hessinger, a moderate force inside of SAG who had been on the job just six months, shortly after taking over. That touched off an internal fight among members, with former "MASH" star Mike Farrell calling the decision a "suicidal" move by a group of "angry, small-minded people."
But, Rosenberg said, "It became clear we needed someone who was 100% on board with what we are doing."
Likewise, the Writers Guild, West, fired Executive Director John McLean, a former CBS executive who had negotiated the guild's last two contracts. To increase its leverage during negotiations, the guild has since launched a major organizing drive of writers working in such areas as reality shows and cable programs.
Both firings sent a message that the guilds had grown impatient with their negotiators in making contract inroads, suggesting that bargaining could be much more contentious the next time around.