Risk, reward for Newsom if he tries to end Hollywood strikes

Argentine actor Eduardo Lezcano, dressed as Captain America, walks the picket line.

By Taryn LunaStaff Writer

Aug. 9, 2023 3 AM PT

Gov. Gavin Newsom so far has taken a backstage role in the Hollywood strikes — even as California’s Senate candidates, President Biden and other prominent Democrats are flexing their pro-labor muscles by supporting picketing writers and actors.

California’s top politician rarely shies from the spotlight, but the fight between his union allies and the studio executives who are among his most generous donors puts Newsom in a potentially perilous spot. With California’s multibillion-dollar film and television industry ground to a halt, the economic losses — and the pressure on Newsom — grow each day.

The financial strife stretches beyond the workers and studios at the center of the impasse. Countless small businesses that serve Hollywood also are struggling to stay above water.

California Gov. Gavin Newsom at a news conference at Universal Studios in 2021.

“He’s in a very difficult situation,” Darry Sragow, a veteran Democratic strategist, said of the governor. “He has to navigate very carefully, not just for the sake of his own career, but for the sake of everybody involved. There are very significant downsides and risks of a misstep here.”

If he steps in and tries to help resolve the conflict, an error could leave Newsom on the wrong side of scribes and actors, who carry enormous social and political influence in California, or afoul of the deep-pocketed studios that are masters at swaying public opinion.

“They both command the attention of the world,” Sragow said.

Anthony York, a spokesperson for the governor, said Newsom is concerned about the effect of a prolonged stalemate on the local and the state economy and the tens of thousands of people who rely on the entertainment industry for their livelihoods. The Milken Institute, a nonpartisan economic think tank based in Santa Monica, estimates that the strikes will lead to at least $4 billion in losses.

The governor has continued to speak informally with players on all sides since the strikes began and receives regular updates from his staff, York said.

“We’re involved in the periphery and we’ve offered our direct involvement to the extent both sides … seek it,” Newsom told reporters last month.

Although Newsom sometimes bickers with unions, maintaining a close relationship with labor is imperative for Democratic governors in California. Labor leaders carry enormous influence at the state Capitol and, during campaigns, union workers knock on doors and staff phone banks, often making the difference between winning and losing a close election.

The Writers Guild of America and the creen Actors Guild also include people Newsom and his wife are friendly with. First Partner Jennifer Siebel Newsom, who worked as an actor before making documentaries, is a member of SAG-AFTRA, though not particularly active in the union, her aides said.

Those relationships were made clear last week when actor Danny Trejo, who has appeared in dozens of films and television shows over decades, called Newsom’s cellphone from a picket line during an interview with CNBC.

“Everything’s gone up, but our wages. And so it’s like, uh, you know, we’re all not Tom Cruise,” Trejo said in a voicemail he left for the governor on camera before abruptly telling Newsom to call him and hanging up.

After a SAG-AFTRA rally outside the state Capitol last month, Kathryn Howell, a San Francisco Bay Area actor who is the president of the union’s Northern California chapter, said she was glad to hear Newsom had offered to help negotiate an end to the strike. But she was skeptical that he could do much to broker an agreement.

“I don’t know what Gavin Newsom could possibly say that would get them to come back to the table,” Howell said. “But please try. I’m all in favor of him trying.”

Newsom has benefitted from political relationships with the studios over the years: Disney, Warner Bros. Discovery, Paramount and Netflix all have been major financial supporters of his campaigns.

Reed Hastings, co-founder and executive chairman of Netflix, gave $3 million to help defeat the recall campaign against Newsom.

Jeffrey Katzenberg, co-founder of Dreamworks SKG and former chairman of Walt Disney Studios, has hosted fundraisers for the governor. Katzenberg and his wife, Marilyn, have donated more than $600,000 to Newsom’s campaigns since 2018, records show.

Steven Spielberg, the director who co-founded Dreamworks, gave Newsom more than $50,000 in 2021. Dreamworks is now a subsidiary of Universal Pictures, which is a division of NBCUniversal owned by Comcast. Comcast reported nearly $170,000 in donations to support Newsom since 2018.

Warner Bros. reported at least $100,000 in contributions to Newsom and Paramount has provided more than $50,000, according to filings since 2018.

Disney executives also have been generous donors to Newsom’s campaigns, and the ties go far beyond that.

Newsom tapped Bob Iger, chief executive of Disney, to serve on his COVID-19 economic recovery task force in 2020. Iger stepped down months later amid tensions between the state and the company over allowing theme parks to reopen during the pandemic. More recently, Newsom met with Iger at the theme park in June to discuss its expansion.

The governor sided with Disney during its feud with Florida Gov. Ron DeSantis, a Republican candidate for president, over the company’s opposition to what critics call Florida’s “Don’t Say Gay” law, which restricts lessons on sexual orientation and gender identity in public schools. Amid those hostilities, DeSantis signed legislation to strip special privileges in the district that encompasses Walt Disney World, which the company alleged was political retaliation.

Newsom posted a video of himself at Disneyland in Anaheim watching the first-ever LGBTQ+ “Pride Night.”

He also offered a nice perk to studios in the current state budget with the extension of the film and television tax credit program at $330 million per year for five years beginning in 2025. The governor’s office has touted the program’s objective to retain and increase production jobs in California, but it also includes a provision that allows studios to receive cash payments from the state if their tax credits are larger than their tax bills.

Newsom’s appearance of neutrality in the Hollywood strikes, at least publicly, makes him an outlier among Democratic politicians — many of whom have voiced their support for the unions and even joined the picket lines.

But it’s not an entirely unique position for Newsom.

Just two weeks after he became governor in 2019, Los Angeles teachers went on strike, placing Newsom between the district and the educators who had endorsed his campaign. Similar to the Hollywood strikes, Newsom remained largely neutral and said publicly that he was engaging in “informal” talks and would not intervene directly unless asked by both sides.

Behind the scenes, however, Newsom and his staff played a pivotal role in helping to resolve the strike.

Before that, as mayor of San Francisco, Newsom had intervened in a two-year impasse between hospitality workers and 13 San Francisco hotels. Years later, then Lt. Gov. Newsom in 2013 interjected himself into a four-day regional rail strike in the Bay Area, talking to both sides in the negotiations even though he had no real authority to intervene.

If Newsom refrains from taking a position this time, he wouldn’t be the first governor to do so. Former Gov. Arnold Schwarzenegger similarly played a behind-the-scenes role in the Hollywood writers strike that began in 2007 and ended in 2008.

Remaining neutral in the current disputes enables Newsom to step in with the trust of workers and the studios if warranted, his spokesman said.

It’s unclear whether studios, writers or actors, who met for the first time Friday since the strikes began, have any real appetite for Newsom’s involvement.

Los Angeles Mayor Karen Bass is in a similar position, though appears to be taking a slightly more active role. The mayor has met with members of the two guilds as well as studio representatives and continues “to engage” with all the parties, her spokesperson said last week. Meanwhile, her own city workers staged a massive one-day walkout Tuesday.

The Alliance of Motion Picture and Television Producers, a trade association that represents studios in strike negotiations, asked for federal mediation in July before actors joined the strike. SAG-AFTRA agreed, but also criticized the request as a ploy to engineer an extension on its contract. The mediation failed to stop actors from launching a strike July 14.

Sragow said the issues at the crux of the strike — pay, compensation for streaming content, working conditions and the role of artificial intelligence, to name a few — are too complex for one person to solve. But if Newsom were able to play a useful role in bringing the high-profile conflicts to an conclusion, it could be “incredibly helpful to his political future.”

“If he were he able to take credit, appropriate credit, for resolving this very difficult and very public battle, I think that would confirm to a lot of voters — irrespective of their party affiliation — that he’s a healer, that he’s able to bring people together to solve a problem,” he said. “And it is my very clear impression that the country is dying for that. The country is desperate for that.”

Times Sacramento Bureau Chief Laurel Rosenhall contributed to this report.