Hollywood: Retailers Bracing For Actors Strike

Battered fashion retailers and designers in Southern California are bracing for another hit ? a possible strike by the Screen Actors Guild that could cripple movie and television production.

SAG’s contract expires June 30 and a walkout by the union’s 120,000 members would be particularly damaging in a state where the unemployment rate is at its highest level in about five years, gas and food prices are rising, home values have imploded and the state budget deficit is estimated at $15 billion.

And it would come as retailers struggle to rebound from revenue lost during the more than three-month Writers Guild of America strike that ended in February and cost the state’s economy an estimated $2.5 billion.

Jack Kyser, chief economist for the Los Angeles Economic Development Corp., said any protracted walkout might generate losses equal to, or higher than, the strike by writers. That scenario could cause a chain reaction among consumers squeezed for cash.

“This could be larger than the writers’ strike and is already having an impact because people aren’t starting production,” he said.

Studios changed their shooting schedules in order to finish before June 30 and new productions are in limbo. That means thousands of actors, writers, crew members and technicians, stylists and other workers can’t count on getting paychecks. Talent and management agencies and an array of entertainment-linked businesses also would be affected.

“This is not a pretty picture,” Kyser said. “It’s not just direct entertainment, it’s ancillary services that are going to hurt. The below-the-line workers are the ones getting their brains beaten out here.”

The economic impact is calculated through direct job and wage losses (actors, writers, crew and other production and postproduction workers), lost advertising, box-office and TV revenues, spending on costumes, catering and props and other equipment. The ripple effect on the local economy, from apparel stores to hotels and restaurants, is also part of the equation.

“This is not at all good news for retailers, who are already in a tough position and had a rough holiday season. Look at all the bankruptcies….A lot of people will be hurting for months,” Kyser said. “The second half of the year, despite the federal economic stimulus package, is looking very, very grim

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