A deal to resolve the US writers’ strike could cost US studios, networks and streamers up to $600 million, according to ratings agency Moody’s.
The Writers Guild of America announced its first strike in 15 years last week after talks with the Alliance of Motion Picture and Television Producers (AMPTP) – which represents streamers Netflix, Apple, Amazon and the major US studios - failed to forge a new agreement. The strike has effectively shut down Hollywood production.
Writers have been at odds with studios and streamers over a whole host of issues, from pay increases to the use of AI in script writing.
A new report by Moody’s Investors Service says that any new agreement will result in higher costs for studios.
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It estimates an improved three-year contract for writers will ultimately cost media companies $250 million to $350 million per year.
However, other union collective bargaining agreements, such as those for the Directors Guild of America (DGA) and the American Federation of Television and Radio Artists and Screen Actors Guild (SAG-AFTRA), will likely take a lead from any agreement with the WGA when they expire on June 30, 2023.
Neil Begley, SVP for Moody’s Investors Service, said: “Extrapolating the likely increase for WGA to other union deals, we estimate collective total annual cost increases for rated companies to be $450 million to $600 million a year. There is great play in these estimates, and some of this increased cost, particularly for television production, is likely to be passed on to buyers.
Moody’s predicts the Writers Guild Strike could last three months or more.
Moody’s said those companies most at risk if there is a protracted strike would be movie theatres, already strained from the COVID pandemic and lighter release schedules. After that are broadcast television and cable networks, which are already suffering cord cutting and declining engagement because of the popularity of streaming services.
Studio, networks and streamers have been preparing for a strike by increasing production and accelerating deadlines.
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