STRATEGY

Hollywood Writers Strike Threatens to Hit Small Businesses Hardest

Small production companies and other firms in Los Angeles are already considering layoffs.
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As the Writers Guild of America strike threatens to stretch into its second week, small businesses that depend directly or indirectly on the entertainment industry for revenue are starting to feel the financial crunch.

Jack Kyser, chief economist for the Los Angeles County Economic Development Corporation, said that 84 percent of the companies in the Los Angeles TV and movie production industry are small businesses that employ less than 10 workers.

"Prop houses and companies that are doing costumes are starting to consider laying people off," Kyser said. "And then there's the ripple impact on restaurants, coffee houses, and other businesses in these areas."

Kyser said the strike of 1988, which lasted five months, cost the industry about $500 million in wages -- the equivalent of about $1 billion today. This time around, there is talk among industry insiders that it could last eight to nine months, he said.

Jeff Briggs, chair of the Hollywood Chamber of Commerce, said his organization plans to hold forums for businesses to interact with each other if the strike drags on much longer.

"The local shop of any kind is going to feel the impact because some portion of their customers in this area are going to be careful with their spending," Briggs said. "Even if they're still working, they are going to be careful."

Last updated: Nov 9, 2007




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