The SAG-AFTRA and WGA strikes could deliver a double whammy to the TV and movie ecosystem but also slam multiple state economies
Just a week into the double strike that brought productions nationwide to a grinding halt, the film and television industries are bracing for a major economic hit.
The Screen Actors Guild-American Federation of Television and Radio Artists and the Writers Guild of America are on strike in Hollywood in their first dual strike since 1960. The WGA launched its strike in May against the Alliance of Motion Picture and Television Producers (AMPTP), and SAG-AFTRA joined the writers on the picket line on July 14 in cities across the country where scripted movies and shows are made.
The Hollywood strikes could cost upwards of $4 billion, Kevin Klowden, chief global strategist at Milken Institute, said in an interview with Bloomberg. The addition of the actors has created a “massive, overwhelming level of strike," he said.
But many of the impacts — whether on the number of television series and films available for viewers or the earnings reports of major studios — won't be felt until further down the line, Cynthia Littleton, Variety co-editor-in-chief told The Messenger.
"The combination of the two [strikes] is obviously going to have a huge impact on the production pipeline," Littleton said. "Production is a long lead type of activity, so the the real ripple effects will be in, six months, eight months, 12 months."
Production Plummets by Almost 70%
The writers' strike that rocked Hollywood for three months in late 2007 and early 2008 resulted in $2.1 billion in losses to California’s economy and nearly 38,000 jobs lost, according to a 2008 study by the Milken Institute.
As of July 16, the weekly on-location permit count for feature films and television projects in Los Angeles and surrounding areas plummeted by nearly 70% to 103 from 340 a year ago, according to data from FilmLA, a partner film office for the Greater LA region. This includes all scripted projects.
In a normal week at this time of year, there would be dozens of scripted television projects in production, FilmLA said. By contrast, the film office reported no scripted TV series with permits to film this week. On-location production dropped 28.8% from April to June, which captures the onset of the writers’ strike, according to a report by FilmLA.
“Greater Los Angeles is the North American epicenter of scripted television production,” said FilmLA President Paul Audley in a statement. “Before long, this sector’s shutdown will be felt in every corner of the regional economy.”
Motion pictures and other information services were the leading contributors to California's share of gross domestic product in 2021, according to the most recent data from the Bureau of Economic Activity.
Littleton says states and smaller cities that have largely built up their own production infrastructure as outposts of Hollywood studios are soon going to feel the burn of the strikes.
"All that infrastructure that has been built up over 20, 25 years is very dependent on knowing there's going to be this amount from this job," she said. "And if you suddenly jerked that away, that's really going to have a bigger impact."
Florida, Georgia, New York Will Feel the Pain
In New York State, 10 major productions have been disrupted due to the strike as of July 19. These productions would have contributed approximately $1.3 billion to the state’s economy, according to Empire State Development, New York's principal economic development agency.
Productions spent a record-breaking $4.4 billion in Georgia during the 2022 fiscal year — making it one of the top states for film and TV productions. While shooting on location, a major motion picture contributes an estimated $250,000 per day, and a single one-hour television episode contributes $150,000 per day, to the local economy, according to the Motion Picture Association’s 2022 Georgia State Profile.
Other states, including Massachusetts and Florida, also rely on the industry for the creation of thousands of jobs and millions of dollars in revenues, according to local offices — all of which will be put on hold until the strike is resolved, which many say likely won’t be for several months.
"This is not just a battle between millionaires and billionaires, this has a far more reaching implication for the working class for those people the depend on these studios," said René García, a Miami-Dade County Commissioner for District 13 and a former state senator.
Small businesses that serve studios and their employees will particularly suffer from the loss of business as employees stop going into work, Littleton said. Burbank, home to several major studios, including Warner Bros., The Walt Disney Company, Cartoon Network and Nickelodeon, is already feeling the knock-on effects of the strikes on its local economy.
“This is going to be a huge depression on the economy almost instantly,” Burbank Mayor Konstantine Anthony told The Messenger. “In fact, this week alone, massive layoffs are coming through and people simply aren't coming to work.”
One of the oldest dry cleaners in the city located blocks from Warner Bros. Studios, Milt & Edie’s, used to have operating hours at all times of the night, Anthony said. They've had to cut back on their house because there's not enough business. “People aren't going to work and dropping their clothes off, and it's just been devastating to them,” he said.
'Historic Inflection Point'
Los Angeles Mayor Karen Bass called the strikes a “historic inflection point” for the city as the entertainment industry experiences “economic pressure and business uncertainty.”
“Los Angeles is experiencing a summer of struggle to make ends meet,” Bass said in a statement. "A strong business sector is essential for our city to become affordable for working families once again.”
Anthony believes, however, that solidarity among local businesses, writers and actors on strike — including direct discounts for writers who show their union cards at restaurants and other shops — will help blunt the level of economic pain the city saw during the last writers’ strike.
“I think people understand where the trouble is and they don't want to see working people in pain,” he said. “They don't want to see working people have to pay the full price because they're fighting for their existential right to a fair wage.”
Moody’s debt analyst Neil Begley estimates that Moody’s-rated companies will spend an additional $450 million to $600 million a year per year in new three-year contracts for all three guilds — Directors Guild of America (DGA), WGA and SAG-AFTRA — following agreement between the guilds and the Alliance of Motion Picture and Television Producers. (The DGA reached a tentative agreement with the AMPTP in early June.)
Until then, Littleton says that Hollywood is in a period of "some retrenchment and absolute reinvention." But there is too much demand and fandom for the film industry not to rebound, she said.