workers on strike

It’s been fifteen years since Hollywood’s writers put down their pens and took their fingers off their laptop keyboards. But the memory of that 100-day shutdown endures — and another strike is imminent.

The Writers Guild of America has failed to come to terms with the studios and networks on compensation for its membership. Not quite Battle of the Titans, but another emotional chapter in a recurring struggle.

Economic ripple effects suggest enduring pain

The looming Writers Guild strike will have a domino effect not only on studios, networks and production companies, but on the services industries adjacent to them.

The 2008 WGA strike cost an estimated $3.2 billion or more to the economy in Los Angeles. Economic impacts rippled beyond the boundaries of the entertainment industry, extending to contractors and service providers from titling companies to restaurants and caterers, from drivers and stunt performers to designers and make-up artists, from dry cleaners to production assistants.

It goes without saying that prolonged negotiations also affect families, at a time of enduring inflation. Thousands of workers are involved in entertainment directly; many thousands more serve the industry.

During shutdowns, focus on improving the business

So, is a strike and ensuring protracted labor negotiations time to batten down the hatches?

In short, no. It’s time to improve how your business operates. Notwithstanding the instinct to immediately shut down certain lines of business, or make radical operational and staffing changes, companies can adopt various strategies to survive protracted negotiations.

Hollywood and the creative industry are not alone in facing labor strife. When shutdowns occur in industries such as transportation, automotive, manufacturing and services, the impact is not isolated to the few large companies at the negotiating table. With the right practical business and financial moves, proactive companies can emerge stronger than their peers.

Whether they provide services or specific goods, owners and operators of businesses involved in a vertical supply chain or horizontal services “sphere” can consider any of the following:

  • Control costs: Rethinking and right-sizing staffing, negotiating better deals with suppliers, or finding ways to streamline operations to control costs and cash flows can offer both near-term savings and longer-term safeguards to the bottom line.
  • Diversify markets: Expanding their customer base, launching new products or services, or expanding into new markets all can help insulate businesses from the blow of a long strike while opening avenues to improved top-line revenue once the strike settles.
  • Amplify the brand: Revamping a company’s branding and positioning, running targeted advertising campaigns, or leveraging social media to reach a wider audience support any of the initiatives above, and reassure customers that the company is solid and will be available to serve them once the dust settles and terms are reached.
  • Improve customer experience: Training staff to provide better service, improving the company’s website or app, or launching loyalty programs to incentivize repeat business all help protect current and new customer relationships—and can differentiate a company from its peers.

Being able to pull certain operational levers, from assigning and training staff to controlling near-term outlays while seeking new customers, all help insulate the company and its brand.

And while they are likely always a principal focus at your company, forward financial planning is a common-sense measure. Claiming all available write-offs for new initiatives and/or research and development expense, reviewing capital assets and real estate costs, examining the balance sheet to gain leverage from debt or equity allocations, and related tax strategies all should come into play.

While titans battle, plan to survive and thrive

Labor strife is often bitter and can drag on for months. The effects of protracted negotiations are felt by thousands, including executives and workers at service contractors, suppliers and subcontractors. BPM can help you survive — and emerge stronger than your competitors.

To learn more, contact Tony Gales at [email protected].

Article Sources
2007-08 Writers Guild of America Strike. Wikipedia. Accessed 27 Apr 2023 here.
Barnes, Brooks. Plot would thicken, if the writers remembered it. New York Times 13 Feb 2008. Accessed 27 Apr 2023 here.
Fink, Richard. Everything to know about the possible writers strike. MovieWeb 25 Apr 2023. Accessed 27 Apr 2023 here.
Maddaus, Gene. Hollywood braces for fallout as a possible writers strike looms. Variety 27 Apr 2023. Accesses 27 Apr 2023 here.
Verrier, Richard. High cost put on writers strike. Los Angeles Times 6 Jun 2008. Accessed 27 Apr 2023 here.

Tony Gales

Kara Cobb

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