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Former Paramount CEO Barry Diller delivered a grim prediction for Hollywood on Sunday, warning that the industry is facing an "absolute collapse" if the Writers’ and Screen Actors Guild joint strike extends into the fall.

"What will happen is, if in fact, it doesn’t get settled until Christmas or so, then next year, there’s not going to be many programs for anybody to watch. So, you’re gonna see subscriptions get pulled, which is going to reduce the revenue of all these movie companies, television companies, the result of which is that there will be no programs," Diller said on CBS’ "Face the Nation" Sunday. "And at just the time, [the] strike is settled that you want to get back up, there won’t be enough money."

Hollywood actors joined screenwriters in their months-long strike against studios, streaming services and production companies represented by the Alliance of Motion Picture and Television Producers (AMPTP) last week, marking the first time in over six decades that the two unions have been on strike at the same time.

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Hollywood Strikes

Meredith Stiehm, left, president of Writers Guild of America West, and Fran Drescher, president of SAG-AFTRA, take part in a rally by striking writers outside Paramount Pictures studio in Los Angeles on May 8, 2023. (AP Photo/Chris Pizzello, File)

Since May, writers, represented by the Writers Guild of America (WGA) have been on strike, asking for a guaranteed number of writers per room, increased pay, and regulated use of artificial intelligence (AI) in the writing process. Actors, represented by Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) want increased minimum pay rates, increased streaming residuals and guarantees from studio and production companies about how, exactly, AI will be used. The strike has impacted the production of film and television series and is expected to cost the industry more than $3 billion in losses.

Diller said Hollywood is in the throes of a "perfect storm," adding that he doesn't think there is enough "trust" between the parties to reach a resolution soon.

Writer Eric Heisserer holds his writers strike sign on the fourth day of the writers strike in front of Netflix in Hollywood, followed by many other individuals

The writers strike has been ongoing since May 2. (Frederic J. Brown/AFP)

"The problem is… all strikes get settled. The issue with this one is because…you had COVID, which sent people home to watch streaming television and killed theaters. You’ve had the results of huge investments in streaming which have produced all these losses for all these companies that are now kind of retrenching. So at this moment, this kind of perfect storm, it's okay if it gets settled in the next month but… what happens if it doesn't? And there doesn't seem enough trust and energy to get it settled soon."

The IAC chairman said he believes a settlement deadline of September 1 should be agreed upon by studios, streaming services and union leaders representing film and television actors to prevent "devastating" effects on the entertainment industry.

"I think there should be a settlement deadline because… this actually will have devastating effects if it is not settled soon," he said, adding that while the public might seem disinterested in internal Hollywood chaos, the truth is, "this is a huge business, both domestically and for world exporters."

"It sounds like I’m crying to the skies," he added, "but these conditions will potentially produce an absolute collapse of an entire industry."

At the center of negotiations are concerns about the unregulated use of artificial intelligence and the effects on actors' pay prompted by the new streaming ecosystem.

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Jason Sudeikis at the picket line

Jason Sudeikis joins the picket line outside NBC Rockefeller Center on July 14, 2023, in New York City. (Alexi Rosenfeld/Getty Images)

Diller said he believes the concern of AI replacing the roles of actors and writers is "overhyped to death," telling host Margaret Brennan that he thinks actors will be "assisted" - rather than "replaced" by the emerging technology.

As for the compensation demands, Diller said, "You have the actors union, saying, 'How dare these 10 people who run these companies earn all this money and won’t pay us?' While if you look at it on the other side, the top ten actors get paid more than the top ten executives. I’m not saying either is right. Actually, everybody’s probably overpaid at the top end."

The Television Hall of Fame inductee suggested that executives and the highest-paid actors accept a 25% pay cut as a "good faith measure" to expedite a resolution if negotiations reach an impasse. 

Fran Drescher at the picket line

 SAG-AFTRA President Fran Drescher speaks with the media as SAG-AFTRA and WGA members picket outside Netflix studios on July 14, 2023, in Los Angeles. (Emma McIntyre/Getty Images)

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"I'm not saying either is right. Everybody’s probably overpaid at the top end," Diller said. "The one idea I had is to say, as a good faith measure, both the executives and the most-paid actors should take a 25% pay cut to try and narrow the difference between those who get highly paid and those that don’t."

Fox News' Kendall Tietz contributed to this report.