The four-month Hollywood strikes that pitted the studios against writers and actors have no end in sight. Meanwhile, the economy is suffering the consequences.
In August, the entertainment industry, which includes the movie, TV, and music businesses, employed 17,000 fewer people than it did in the prior month, according to Bureau of Labor Statistics data. It’s a sign of the broad impact of the work stoppage, which has largely stymied studio production—not just on the striking workers themselves, but also the businesses like lighting and sound that support the Hollywood machine.
So far, the strikes have cost California’s economy an estimated $5 billion, according to the Financial Times. The situation is so concerning that California Treasurer Fiona Ma sent a letter to studio heads urging them to find a speedy resolution to the strike so that its economic ripples wouldn’t spread any further. In her letter Ma urged studio executives to consider that the $429 million it would cost to settle the writers strike would be significantly less than the billions of additional economic damage the strikes would cause if they continued.
The strikes have also taken a toll on studios. Warner Bros. Discovery, among Hollywood’s biggest studios, said it expected annual earnings that exclude certain items to be $300 million to $500 million lower than it had previously forecasted, or $10.5 to $11 billion in earnings for the full year. The company’s earlier projections had assumed that the strike would end in early September. Now the company is telling investors that “it cannot predict when the strikes will ultimately end.”
The strikes have forced the studio to stop production on a number of projects and delay the release of its highly-anticipated Dune: Part Two from this year to March 2024. Because of the strike, actors are refusing to promote new movies. Therefore, the star-studded cast of the next Dune, including Timothee Chalamet, Zendaya, Florence Pugh, and Jason Momoa, won’t participate in any press tours leading up to its release.
In the same filing, Warner Bros Discovery did issue some brighter news that it had raised its free cash flow projections for the year to at least $5 billion. Previously the company had forecast free cash flow of $4.5 billion to $5 billion, with the company now confident it will hit the higher end of the range it had provided in August. It attributed that increase to the success of Barbie and its $1.4 billion in global ticket sales. At the same time it had the most successful movie of the year, Warner Bros. Discovery was also saving big money on production and marketing because of the strike. On an earnings call in August CEO David Zaslav called free cash flow Warner Bros Discovery’s “financial North Star.”
On the same call, Zaslav acknowledged the strike’s unprecedented impact on Hollywood. “We’re in uncharted waters,” he said.
In the strike’s early days, when tensions were especially high with the unions, Zaslav, in particular, came under fire for his large compensation—$498 million in the last five years—and decision to cancel several projects with little notice to creators. He was even heckled in May while giving the commencement address at his alma mater, Boston University. During Zaslav’s speech, students chanted “pay your writers,” forcing him to pause until the chorus died down.
Contract negotiations between the studios and striking workers picked back up last month, only to break down again. The Alliance of Motion Picture and Television Producers then took the unusual step of publicly releasing the contract proposal it had offered the writer’s union. The move frustrated union leadership who considered it an attempt to divide members over which parts of the offer should be accepted or negotiated. In its statement the AMPTP said the offer recognized the “foundational role writers play in the industry and underscores the Companies’ commitment to ending the strike.”
"Hollywood" - Google News
September 06, 2023 at 02:12AM
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Hollywood’s strikes are bulldozing the economy to the tune of 17,000 jobs and forcing a major studio to cut earnings guidance by $500 million - Fortune
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