L.A. story: $1.5 billion lost due to the strike

Some of the shows that Under the Sun was supposed to work on have been cancelled. One of the company’s biggest clients, E! Entertainment, did not require as much in the way of lower-end goodie bags — red carpet “emergency kits” that include lipstick, tape to hold dresses together, etc. — because there was far less red carpet activity.

The Los Angeles Economic Development Corp. is a private, non-profit organization that provides research and consulting to media, government and private businesses. It estimates that the cancellation of the Golden Globes alone cost the area economy about $60 million, which includes lost revenue for hotels, restaurants, transportation services, party venues and more.

“The damage is spreading beyond industry specific areas,” Kyser said. “It’s spreading into the greater economy.”

Kyser pointed out that his organization’s data for the current strike covers all of Los Angeles County. “Right now, the wage loss by members of the Writers’ Guild and allied unions comes in at just below $553 million since the strike started,” he said. “If you then apply a multiplier, these people are not out spending, that’s where we get the $1.5 billion figure. These people earn a lot of money when they’re working.”

The UCLA Anderson Forecast, headed by economist Jerry Nickelsburg, suggests the strike will be far less damaging to the local economy. The primary reason for that conclusion is the stockpiling of scripts by studios, which led to an acceleration of production leading up to the strike that helps compensate for the absence of new films and shows. That acceleration also includes a spike in hiring, according to the UCLA study.

Kyser’s response to the UCLA study: “I think he underestimated.”

“In TV, there isn’t much of a stockpiling of scripts,” Kyser added. “Plus he assumes that reality shows that don’t need scripts will fill the void.”

Clearly, there are many ways to interpret the same economic event. But the anecdotal evidence that the writers’ strike is painful keeps mounting. Lazarow offered a personal example of how even those not directly connected to the industry have felt the impact.

“My husband is a landscape architect,” she said. “He went to one client recently who is a key grip. The client said he’ll have to hold off on a project my husband was going to do until the strike is settled.”

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