California Governor Gavin Newsom’s office announced on Wednesday that he has reached out to all parties involved in the ongoing strikes affecting Hollywood. The Governor aims to facilitate negotiations and find a resolution to restart the crucial industry, which plays a vital role in sustaining the state’s economy despite recent signs of weakness.
According to Anthony York, Newsom’s senior advisor for communications, studio executives, actors, and writers have not yet formally expressed their interest in involving Newsom in the negotiations. Nevertheless, both Newsom and senior members of his administration have been in communication with all parties during the continued duration of the strikes, which have now extended into the peak summer blockbuster season.
While it remains evident that there are substantial gaps between the parties’ positions, Newsom remains deeply concerned about the potential impact of a prolonged strike on the regional and state economy. The Governor recognizes that numerous jobs directly or indirectly depend on the resumption of Hollywood’s operations, encompassing crew members, staff, and catering services, among others.
Over a decade ago, during the previous writers’ strike, the state’s economy suffered a significant blow with an estimated loss of $2 billion over the 100-day work stoppage period. This time around, with actors also participating in the strikes, the economic impact could be even more substantial. The convergence of both writers and actors on the picket lines is likely to exacerbate the financial ramifications for California.
Adding to the challenges, the strikes are occurring at a time when the state is already facing economic difficulties. Governor Newsom recently signed a state budget that revealed a staggering deficit of over $31 billion. This deficit was partially attributed to a slowdown in the tech sector, which is another critical industry for California’s economy.
The combination of the Hollywood strikes and the tech sector slowdown poses a significant threat to the state’s fiscal health and overall economic stability. Resolving the labor disputes in Hollywood is becoming increasingly crucial for California to mitigate further financial losses and support the revival of its key industries.
Since May, the writers’ strike has been ongoing, and more recently, the actors have joined their cause. Both unions share concerns about their compensation in an era where traditional movie-going and cable TV viewership are declining in favor of streaming services. Additionally, they are apprehensive about the impact of artificial intelligence on the creative process and the workforce behind movie and TV show production.
Governor Gavin Newsom, a Democrat, offered his assistance in mediating a deal back in May when the writers’ strike first started. He expressed empathy towards their grievances related to streaming and AI.
Currently in his final term as governor, Newsom has been actively working to raise his national profile, potentially eyeing a future role on the national stage. While many consider him a potential presidential contender, he has stated that he currently has no plans to run. Resolving the strikes in the influential Hollywood industry could bolster his standing and reputation on the national level.
This summer has seen a surge in labor actions across California, leading politicians and their allies to intervene in finding resolutions. For instance, Los Angeles Mayor Karen Bass played a crucial role in negotiating an end to a strike involving Los Angeles school staff. Similarly, Julie Su, the Labor Secretary in the Biden administration and a former California labor leader, helped settle a contract dispute at Southern California ports. These instances demonstrate the importance of political involvement in addressing labor disputes in the state.
Regarding Governor Newsom’s involvement, a spokesperson for Los Angeles Mayor Karen Bass stated that they are actively engaging with various stakeholders, including labor leaders, studio executives, elected officials, and other affected parties, in pursuit of a fair and equitable solution to the strikes.
However, Newsom’s senior advisor for communications, Anthony York, refrained from disclosing specific details about the individuals the Governor has spoken to, both from the unions’ side and the studios. The Screen Actors Guild – American Federation of Television and Radio Artists and the Alliance of Motion Picture and Television Producers declined to comment on the matter as well.
Apart from its economic significance to California, Hollywood plays a crucial role as a fundraising powerhouse for predominantly Democratic candidates, including Governor Newsom. During the 2021 recall election, Netflix co-founder Reed Hastings donated $3 million to support Newsom’s retention in office. Other executives from companies like Disney, Sony, and Lionsgate also contributed to his campaigns. Additionally, renowned directors and producers like Steven Spielberg and Chuck Lorre have supported Newsom financially.
The Governor’s relationships with influential Hollywood executives could potentially be advantageous in the negotiations over the strikes, as he continues to advocate for the interests of the workers. Moreover, Newsom has a personal connection to Hollywood through his wife, Jennifer Siebel Newsom, who previously worked as an actor and is now a documentary director.
Furthermore, in the same year, Newsom signed a law extending tax credits for movie and television productions. Notably, these tax credits will now be refundable, meaning that if a movie studio holds credits worth more than its tax liability, the state will reimburse the difference in cash. This move aims to further support and incentivize the entertainment industry in California.
