The entertainment industry is taking a hit from the downturn in the economy. The Hollywood Reporter writes that everything from movie financing and star perks to the hiring of temps and consultants is being sliced and diced.
The industry’s woes are reflected in recent financial announcements.
NBC Universal is cutting $500 million from its budget in 2009 and likely trimming staff.
Viacom’s third-quarter earnings dropped 37% as its cable networks saw an ad revenue dip in the U.S., and chairman Sumner Redstone and his holding firm National Amusements are under pressure from nervous creditors amid a global credit crunch and declining stock prices.
Disney’s recently announced quarterly earnings dropped 13% from last year, citing a sudden and significant decline in TV ad and theme parks trends.
“Studios are taking a much harder look at the bottom line,” said analyst Larry Gerbrandt of Media Valuation Partners in Beverly Hills. “When they contract, they contract across the board, and that includes production.”
For movies, the days of easy money are officially over.
If the industry thinks it has a problem now, just wait until the new president imposes his massive tax hike on the rich and his universal health care plan with all of its mandates on employers.
Brace yourselves, Hollywood stars, producers, and execs. You’re about to get what so many of you wished for.
UPDATE: A friend responded to this post with an excellent addition to the list of things Hollywood types can expect to soon see impact their industry: much more powerful unions.
