Hollywood is facing its first potential writers' strike in 15 years.

The Writers Guild of America (WGA), which represents thousands of television and movie writers, voted overwhelmingly on Monday to authorize a strike if a deal with major studios was not reached by May 1 — the day the guild's three-year contract expires.

A strike would cause a production shutdown and affect the biggest companies in Hollywood as scripted series across both network television and streaming grind to a halt.

The WGA has been negotiating with the Alliance of Motion Picture and Television Producers (AMPTP), which bargains on behalf of the studios. The talks have centered on pay concerns brought on by the streaming boom, in addition to other fundamental changes within entertainment like the recent wave of cost-cutting that has prompted media giants from Disney (DIS) to Warner Bros. Discovery (WBD) to enact mass layoffs and shelve multiple projects.

Netflix (NFLX) executives weighed in on negotiations during the company's quarterly earnings call on Tuesday, with co-CEO Ted Sarandos saying firmly: "Just to be clear — we're at the table."

"We don't want to strike. The last time there was a strike, it was devastating to creators. It was really hard on the industry. It was painful for local economies that support production, and it was very, very, very bad for fans," Sarandos said. "If there's a strike, we want to work really hard to make sure we can find a fair and equitable deal so we can avoid one. But if there is one, we have a large base of upcoming shows and films from around the world, so we could probably serve our members better than most."

Rich Greenfield, analyst at Lightshed Partners, noted how the shift to streaming means a potential strike won't be a rerun of 2007, writing in a new note earlier this week,"What is different today vs. prior WGA/AMPTP negotiations is that most of the major Hollywood studios are not pure-play production studios anymore. They are vertically integrated with direct-to-consumer streaming services (Disney+, Hulu, Paramount+, Peacock, Max, etc),"

Greenfield argued, as a result of shifting streaming economics, coupled with the recent refocus on profitability, a strike could actually be a good thing for companies like Paramount Global (PARA) and Warner Bros. Discovery, which have steep direct-to-consumer streaming losses on their respective balance sheets.

"A production work stoppage or even a slowdown that simply utilizes scripts on-hand could lead to far less content being delivered to subscription streaming services in 2H 2023. If content is not delivered to a streaming service, the expense is not borne by the streamer. In turn, multi-billion dollar operating losses could come in significantly better than expected with free cash flow also ending up being far greater than expected (remember how Netflix free cash flow came in far better than expected during the pandemic)," he wrote.

But not everyone is convinced of Greenfield's argument.

"I don't think you want a writers' strike," Citi Managing Director Jason Bazinet told Yahoo Finance Live on Monday, explaining any potential cash flow upside is "just sort of tactical."

"At the end of the day, the Street doesn't like uncertainty that comes with a strike," he cautioned. "It's going to just inject more noise as the cadence of new content slows down. It might help margins, but generally, the Street doesn't like strikes."

Warner Bros. Discovery CEO David Zaslav said last week that he was optimistic a deal could be reached "in a way that's fair to all parties."

"We’re assuming the worst from a business perspective," he told reporters following the Max streaming launch presentation. "We’ve got ourselves ready. We’ve had a lot of content that’s been produced and we are launching a product on May 23. So, we are ready to go guns blazing in terms of our product and our platforms around the world."

Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at [email protected]

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