Hollywood Unions’ Game of Chicken

I can’t stand awards shows, and I don’t watch the Oscars, but I do find the business aspects of Hollywood interesting — which is why I found the prospect of the Oscars’ cancellation due to the recent TV writers strike interesting. Given the influence of labor unions in the film industry and the industry’s importance to California’s economy, labor disruptions in Tinseltown can be very, very costly, as Alex Nowrasteh and I note in Capital Research Center’s Labor Watch.

Canceling the Oscars extravaganza would have cost L.A.’s economy $130 million, according to an estimate by Jack Kyser, chief economist for the Los Angeles Economic Development Corporation. Disaster was averted at the last minute, with an agreement reached between the studios and the Writers Guild only 12 days before Hollywood’s big night out, which addressed some of the issues over online content distribution.

Now with the Screen Actors Guild facing new contract negotiations, there may yet be another such game of brinkmanship as just played out between the writers and the studios — with the attendant peril to California’s economy. And episodes like this are likely to play out again every time a contract is up and new methods of content distribution are developed. Is this any way to run an industry?

For the full article, see here.