August 8, 2023

Calculating the Economic Impact of the 2023 WGA & SAG-AFTRA Strikes

Courtesy of Freepik.com

For the first time in over 60 years, the Writers Guild of America (“WGA”) and the Screen Actors Guild (“SAG-AFTRA”) are both on strike and have effectively brought television and film production in the United States to a standstill. The vast majority of projects, those not associated with or distributed by an Alliance of Motion Pictures and Television Producers (“AMPTP”) member, are on a temporary or permanent hiatus. Though the mental and emotional tolls of the work stoppage are immeasurable, the effects are felt by more than just actors and writers. Countless numbers of below-the-line (“BTL”) crew, including positions such as set designers, drivers, production coordinators and accountants, are also out of work. Furthermore, the loss of income is being felt by retail vendors that supply goods such as lumber, clothing, and food, to production sets. It is difficult to accurately calculate how much of a financial toll these strikes will have on the production community as a whole. Data from Prior Strikes Following the 2007-2008 WGA strike, the Milken Institute released a report detailing a loss of output larger than $2.1 billion for the California economy. [1] The economic impact study categorized the losses in the following sectors:

• Information, leisure and hospitality,

• Professional and business services,

• Trade, transportation and utilities,

• Financial activities, and

• Education and health services.

As U.S. production was fairly centralized in California and New York at the time, the report focused solely on the state of California’s loss. Fast forward to the current year’s strikes, production is mostly decentralized with states such as Georgia, Illinois, Louisiana and New Mexico hosting large percentages of filming annually while California and New York are still top filming destinations. Estimating the Current Loss In order to properly estimate the economic loss associated with the current strikes, one would need information from AMPTP member companies by production, by state. Absent that information, a financial analyst would turn to each state’s annual economic impact study to learn more about the financial gains generally associated with filming in the relevant jurisdiction. Production economic impact studies are annual analyses that examine the effect of a particular project or filming-as-a-whole in a specified area. These reports usually measure changes in business revenue, personal wages, and/or jobs and are oftentimes sponsored by the state government or local stakeholders. A state’s recent economic impact report can be used to estimate this year’s potential loss. [1] The Writers' Strike of 2007—2008: The Economic Impact of Digital Distribution. Milken Institute (2014) found at https://milkeninstitute.org/article/writers-strike-leaves-california-21-billion-loss-more-come-if-sag-contract-not-resolved.

Let’s use Georgia, for example. For the fiscal year ended 6/30/22, the Georgia Department of Economic Development (“DED”) announced that film and television productions spent approximately $4.4 billion in the Peach State, an increase of nearly 10% over the previous year. In FY2022, Georgia hosted more than 300 feature films and television/episodic productions. If we assume that production in Georgia would increase again by at least 10% for the fiscal year ended 6/30/23, we can estimate that approximately $4.84 billion would’ve been spent in the state but for the strike; that is approximately $1.21 billion spent on production quarterly in Georgia. Since the first day of the WGA strike in May and in anticipation of a potential SAG-AFTRA strike, productions began to shutter in the state. The work stoppages continued to spread and very little permitted production is currently underway. Each day that the studios and union executives fail to reach a deal is another day that affects the lives of thousands of cast and crew across the United States and abroad. For the state of Georgia, this 3-month strike has cost approximately $1.21 billion and counting. We’re all praying that the negotiations resume and a deal is struck quickly!