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The impact of the Hollywood strikes on California’s economy has reached almost $5bn four months after script writers took to the picket lines, a figure that is expected to grow after the latest talks between union representatives and studios ended in acrimony.
The first joint strike by actors and writers in 60 years has shut down most Hollywood productions, creating a knock-on effect for caterers, dry cleaners, drivers, rental companies and other small enterprises that support the industry, said Kevin Klowden, chief global strategist at the Milken Institute, who conducted the research.
“All these different people who provide support services that make productions happen — they’re getting nailed,” said Klowden, who has been an adviser to the industry and California governors.
With the writers’ strike now in its 124th day, the toll on California’s economy has eclipsed the $2.1bn hit from the last big Hollywood industrial action in 2007-08, when members of the Writers Guild of America walked out for 100 days.
Fiona Ma, California’s state treasurer, sent an “urgent appeal” to the major studio heads this week in which she criticised their failure to reach a deal with the unions and urged them to return to the bargaining table. Noting that about 700,000 Californians work in the entertainment industry, she said the strikes threatened “the stability and value of retiree investments” in the state and called for an end to the stalemate.
The WGA and a group representing the studios restarted discussions in early August after a “cooling off” period, fuelling hopes for a resolution. Union negotiators met with Hollywood chieftains, including Disney chief executive Bob Iger and Netflix CEO Ted Sarandos, on August 22.
But the discussion ended with WGA officials complaining they had been “met with a lecture” from the chief executives. The studios, represented by the Alliance of Motion Picture and Television Producers, then released the detailed terms of their offer in hopes of peeling off support from some union members. The WGA criticised what it called an attempt to “detour” around it, and there have been no more discussions between the sides.
The latest standstill has raised concerns that the strikes could continue into the autumn or beyond. There have been no discussions for several weeks between the studios and the 160,000-strong Screen Actors Guild, whose members went on strike in mid-July.
Studios have started to push movie releases into next year, in large part because strike rules prevent actors from promoting their films. Warner Bros has delayed the release of Dune: Part 2 starring Timothée Chalamet and Zendaya until next spring. Sony has pushed several films into next year, including Ghostbusters: Afterlife, and has taken Spider-Man: Beyond the Spider-Verse off its release calendar.
Beyond the direct impact on film and TV releases, the lengthening strikes will have a sizeable effect on Los Angeles’s economy, Klowden said, even though Hollywood lags behind the ports in financial importance.
“The jobs for average people in Hollywood — not the stars but the average people — have always been viewed as great middle class jobs,” he said. “When that’s disrupted, the ripple effect on LA is more broad.”
Among those affected is Gregg Bilson, president of ISS Group, which provides props and other services to the global film industry. He estimates revenues are down 90 per cent to 95 per cent, forcing him to furlough 70 per cent of his staff of 225.
“It’s been tough. I laid myself and my wife off seven weeks ago,” he said. “Production across the board has stopped happening.”
In normal times Bilson’s company deals with about 3,000 vendors to supply props — but he is doing business with none of them now. “That means my employees aren’t buying coffees, aren’t buying lunches, so the trickle down impact is really tremendous,” he said.
When the strikes are resolved, LA’s recovery will be “not nearly as fast as you would think”, Klowden said. Many actors and writers may find jobs in other cities and will not be available when productions resume. Some crew members may move to other industries. Studio space may be limited when the strikes end.
Bilson, a member of the union for behind-the-scenes theatrical workers, said he supported the striking writers and actors — but was also concerned about the industry’s future.
“If the strike continues much longer — and it does not appear that the sides are talking anywhere near a settlement — it’s going to forever change the landscape with regard to vendors and crew,” he said. “There’s so many people now that are either retiring or choosing another profession because of this strike. So it’s really going have an impact on our ability to do shows for many years.”
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