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Hollywood strike cost $2.5 billion
2008-02-20
The ricochet effect from the Hollywood writers strike might be more far-reaching and long-lasting than first thought. So says an influential Los Angeles economist in his annual "Economic Forecast Report" for Los Angeles County and its surrounding areas. The work stoppage that started November 5 and was settled early this month already has cost the town an estimated $2.5 billion, according to Jack Kyser, the chief economist for the Los Angeles County Economic Development Corp. The figure includes lost wages from TV shows that were canceled and films that were put on hold as well as a plethora of support services, ranging from limo drivers to florists. Kyser suggested that the cancellation of the Golden Globes resulted in a $60 million shortfall for the community. The 71-page report, set to be unveiled Wednesday, focuses on other issues affecting the region, including the housing crisis and tourism, but it contains several pages devoted to problems facing the entertainment business. While Kyser and his team of researchers point out the strong gains in domestic and international box office receipts in 2007, the buoyant season for cable shows and a savvier use of the Internet for marketing content, there are worrying signs to contend with. Kyser said chief among the concerns is that Screen Actors Guild leaders are "talking tough," so there is growing concern that they will go on strike after the union's labor contract with the studios expires on June 30. He also pointed out that DVD sales have leveled off, declining last year by 3.4% to $16 billion, and that the scripted TV season, both what remains of it this spring and what will come in the fall, has been discombobulated by the strike. Kyser also noted that California does not subsidize low-budget film productions, and with the state's budget deficit soaring, taxpayer support cannot be expected anytime soon. Reuters/Hollywood Reporter
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