Hollywood actors on Thursday announced the start of a strike, joining writers in the first industrywide shutdown in 63 years after last-ditch talks failed, with nearly all film and television productions set to grind to a halt.
The Screen Actors Guild, or SAG-AFTRA, which represents 160,000 performers including A-list stars, said negotiations had ended without a deal on their demands over dwindling pay and the threat posed by artificial intelligence.
“SAG-AFTRA's national board unanimously voted to issue a strike order against the studios and streamers,” said the union's chief negotiator Duncan Crabtree-Ireland.
The strike will begin at midnight on Thursday, meaning actors will join writers on picket lines from Friday morning in the first Hollywood “double strike” since 1960.
Writers have already spent 11 weeks on the picket line, after their similar demands for better pay and protections against the future use of AI in television and films were not met.
Popular series set to return to television this year now face lengthy delays. And, if strikes continue, major films could be postponed too.
A strike immediately prevents actors from promoting some of the year's biggest releases at the peak of the film industry's summer blockbuster season.
Director Christopher Nolan told the London premiere of his new film Oppenheimer that his cast had walked out of the glitzy event in solidarity with the strike, Variety reported.
SAG-AFTRA represents everyone from A-list stars such as Meryl Streep, Jennifer Lawrence and Glenn Close to day players who do small roles on television series.
The vast majority of members had already voted to pre-approve a strike if a deal was not reached.
“Compensation has been severely eroded by the rise of the streaming ecosystem. Furthermore, artificial intelligence poses an existential threat to creative professions,” a SAG-AFTRA statement said after the talks fell through.
Executives have “refused to acknowledge that enormous shifts in the industry and economy have had a detrimental impact on those who perform labour for the studios”, it continued.
The Alliance of Motion Picture and Television Producers, which represents the studios, said it was “deeply disappointed that SAG-AFTRA has decided to walk away from negotiations”.
“This is the union's choice, not ours,” said a statement.
Disney chief executive Bob Iger on Thursday told CNBC the actors' and writers' expectations were “not realistic”, calling the decision to strike “very disturbing”.
The last time the actors' union went on strike, in 1980, it lasted more than three months.
While the writers' strike has already drastically reduced the number of films and shows in production, an actors' walkout shutters almost everything. Some reality TV, animation and talk shows could continue.
Actors and writers are demanding higher pay to counteract inflation and guarantees for their future livelihoods.
In addition to salaries when they are actively working, actors earn payments called “residuals” every time a film or show they starred in is aired on network or cable – helpful when performers are between projects.
But streamers such as Netflix and Disney+ do not disclose viewing figures for their shows, and offer the same flat rate for everything on their platforms, regardless of its popularity.
Muddying the waters further is the issue of AI since both actors and writers want guarantees to regulate its use, but studios have refused to budge.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”