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Four months after writers took to the picket line, the impact of the Hollywood strike on California’s economy has reached nearly $5 billion and is expected to grow after the latest talks between union representatives and studios ended in acrimonious fashion .
Kevin Klowden, chief global strategist, said it was the first combined cast and writers’ strike in 60 years, shutting down most Hollywood productions and putting a dent in caterers, dry cleaners, drivers, rental companies and others supporting the industry. Small businesses have a knock-on effect. Researchers at the Milken Institute conducted the study.
“All these different people who provide support services to enable production — they’re all nailed down,” said Cloden, who has served as an advisor to the industry and to the governor of California.
The strike, now in its 124th day, has cost the California economy more than the $2.1 billion lost to the last major Hollywood strike in 2007-08, when members of the Writers Guild of America went on strike for 100 days.
A letter from California State Treasurer Fiona Ma “Urgent Appeal” This week, she criticized major studio chiefs for their failure to reach a deal with the union and urged them to return to the negotiating table. She noted that about 700,000 Californians work in the entertainment industry and said the strike threatened the “stability and value of retirees’ investments” in the state and called for an end to the impasse.
After a “cooling off” period, the WGA and groups representing the studios reopened discussions in early August, raising hopes of a resolution. On Aug. 22, union negotiators met with Hollywood executives, including Disney CEO Bob Iger and Netflix CEO Ted Sarandos.
But by the end of the discussion, WGA officials complained that they had been “teached” by the CEO. The studios, represented by the Union of Film and Television Producers, later released detailed terms of the offer, hoping to shake off the support of some union members. The WGA criticized what it called a “detour”, and no further discussions took place between the parties.
The latest pause has raised concerns that the strike could continue into the fall or beyond. For weeks, there have been no discussions between studios and members of the 160,000-member Screen Actors Union, whose members went on strike in mid-July.
Studios have begun delaying movie releases until next year, largely because of strike rules that prevent actors from promoting their films.Warner Bros. postpones the release Dune: Part Two Starring Timothee Chalamet and Zendaya until next spring.Sony has delayed a number of films until next year, including Ghostbusters: Afterlife, and have taken Spider-Man: Beyond the Spider-Verse Canceled its release calendar.
In addition to the immediate impact on film and television distribution, the extended strike will have a sizeable impact on Los Angeles’ economy, even though Hollywood trails the port in terms of economic importance, Cloden said.
“The jobs of normal people in Hollywood — not celebrities, but normal people — have always been seen as great middle-class jobs,” he said. “When that’s disrupted, there’s a broader knock-on effect on Los Angeles.”
Those affected include Gregg Bilson, president of ISS Group, which provides props and other services to the global film industry. He estimates revenue has dropped by 90% to 95%, forcing him to furlough 70% of his 225 employees.
“It’s been tough. My wife and I lost our jobs seven weeks ago,” he said. “Full production has ceased.”
Normally, Bilson’s company deals with about 3,000 suppliers for props, but now he doesn’t do business with any of them. “It means my employees don’t buy coffee, they don’t buy lunch, so the trickle-down effect is really huge,” he said.
When the strike is resolved, Los Angeles’ recovery will “not be as fast as you think,” Cloden said. Many actors and writers may find work in other cities, but won’t be able to when production resumes. Some crew members may move to other industries. Studio space may be limited when the strike ends.
Bilson, a member of the behind-the-scenes theater workers union, said he supported the striking writers and actors but also worried about the industry’s future.
“If the strike goes on for much longer – and the parties don’t appear to be negotiating anywhere near a solution – it will change the situation for suppliers and crew forever,” he said. “A lot of people are now retiring or choosing other careers because of this strike. So it really has an impact on our ability to perform over the years.”