TheWGA and SAG-AFTRA strikeschase a noble cause. But, in the short term, they might hurt themselves more than they are helping. A lot of economists have seen that, since the strikes started, studios have actually benefited from the strike. The WGA and SAG are doing what they have to do, but they might have to do it for longer than they expected.
Many producers and studio heads have barely felt the impact of strikes from these employees; some have even had a bit of a windfall. It will take a long time for these large corporations to hurt enough to worry about bringing better terms to the negotiating table. The people who will really be hurt will be the smaller production companies and independent studios. And the worst effects of the strike won’t come until after it’s over.
The WGA and SAG will get what they want, but there is a path filled with destruction laid ahead of them. And the producers will have no problem sacrificing the smaller companies while they hoard the cash they’re not spending onproducing films during the strike.
The Strike Is Right
The AMPTP will continue to frame the WGA and SAG-AFTRA as the organizations causing the hurt in this conflict. However, historically proven, the actors’ and writers’ situations would only continue to deteriorate without one of these strikes.People like Bob Igerand David Zaslav have tried to control the narrative, saying that the strike is doing a lot of damage. But they haven’t felt any hurt yet. In fact, they’re making more money than ever.
The WGA and SAG have successfully shut down Hollywood, but in the short term, they’re creating a small cash reserve for many of these bigger studios. Netflix told investors that it expected its 2023 free cash flow (the amount it repays to stockholders as dividends) to be $3.5 billion, but due to the strike, they’ve raised that estimation to $5 billion. And so they should; the money they’re not using to pay actors or develop films is all going into a big pile somewhere, more or less.
These short-term benefits could continue for the rest of 2023, according to Morgan Stanley analyst Ben Swinburne,as quoted by Variety. But five months is a very long time for the folks on the ground. And as many economists saw during the pandemic, many of these companies will use this temporary windfall to keep themselves afloat to last longer in the strike. But regardless of their cash reserves, the goal for companies like Netflix is “creating a steady drumbeat of must-watch shows and movies.” And there will be a serious lack of content in the coming months.
That’s the real punch of this strike. It isn’t the momentary effects felt by the companies but the stoppage of what’s normally a steady flow of content, meaning that all of the real damage is done downstream of the dam that is the strike. But in the meantime, the ecosystem of thefilm and television industrywill be affected in a different way.
Related:10 Actors Who Have Been Extremely Supportive of the WGA Strike
The Other People Affected by the Strike
The WGA/SAG strike pits actors and writers against big studios like Disney, Netflix, Warner Bros. Discovery, and NBCUniversal, but there are other people in the industry that will be affected. The writers and actors will eventually get what they want. But Neil Begley,Moody’s senior VP, wrotein a July 17 report:
“The consequences of a very long strike could prove bothersome and even dire, under certain circumstances, for the many media companies along the food chain that rely on the entertainment content studios produce and that have minimal diversity, minimal sports rights and news programming, or lack adequate replacement content and financial flexibility,”
“we believe this standstill could be a relatively long strike, with the stakes being larger than they have been in many years.”
This means broadcasters, cable companies, and lower-paid workers will have economic difficulties much sooner than these big studios. But all the damage that’s being done to those studios is being done right now, and it’s completely unavoidable. It’s just happening in the future.
So the problem for these executives is whether they have foresight enough to weigh these consequences before dealing with them. Inescapable damage is already being done to their companies down the road. But when will they deal with it?
It’s a simple matter for these executives to take the short-term hardships and levy them against the strikers as if the situation were their own fault. But the real problems are already occurring down the line. It’s important for strikers to keep their eyes on the prize and not be fooled by any narrative that puts the blame on them.
