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The economic ripple effect of a writers strike

Striking members of the Writers Guild picket in Century City during their last strike in 2007.
Striking members of the Writers Guild picket in Century City during their last strike in 2007.
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The economic ripple effect of a writers strike 

In the fall of 2007, things went a little haywire on TV when the Writers Guild of America went on strike.

Without their scribes, a lot of studio production went dark. Eventually, late night tak show such as Late Night with Conan O'Brien came back on the air but without their writers as the walk out continued.

On April 10, Hollywood writers will resume negotiations for a new labor agreement. And if they can't reach one in the next couple of weeks, the union's member may vote to strike again.  

The last time writers walked off the job, they were out for 100 days. When the entertainment industry takes a hit in a city like Los Angeles, a lot of people feel the impacts—beyond the TV industry. 

Take Two's A Martinez spoke with Cynthia Littleton, managing editor at Variety. She's covering the union's current negotiations. And is the author of  "TV on Strike: Why Hollywood Went to War over the Internet"​.

Littleton boiled down the crux of the 2007-2008 writers'strike to the introduction of digital media. "Digital distribution of content raised a whole host of issues for the major entertainment companies," she said.  "And also for how Hollywood's creatives– writers, producers, and actors– how they would get paid in this new world order." 

Writers and other industry professionals took a substantial economic hit as result of the 100-day strike. "The networks lost their pipeline of programming and writers lost their income, " explained Littleton. "Many writers had longstanding relationships with studios that ended because the strike initiated what's known as a ‘force majeure’ situation, so existing contracts could be wiped out."

A disruption in the entertainment industry has a ripple effect on the greater economy. Shari Stearns is the owner of Ultimate Cleaners in Studio City. Her studio-adjacent dry cleaning business not only accommodates wardrobe cleaning, but a big part of her clientele works in film and TV production. Here’s what Stearns said about the last writers' strike:    

It impacted us I would say maybe 30 percent. It was pretty bad. It was definitely hard. I had to cut people and cut back wherever we could to survive. The writers' strike was definitely something that I won't forget. 

With film and TV positions making up such a large percentage of the Los Angeles job market, Angelenos who usually contribute a lot to the local economy were operating on a much tighter budget. To boot, "a lot of smaller companies around the major studios provide them with bagels, and coffee, and newspapers everyday," said Littleton. "And if all that is curtailed, the ripple effect is really significant". 

Today, the work life of a Hollywood writer looks different than it did 10 years ago. Audiences enjoy what is being referred to as a third "Golden Age" of television, much of it delivered through on demand streaming platforms like Netflix and Amazon. And although this means more work for writers, some say that the evolving format of content and how it's produced, is causing many to work harder for less compensation. 

The Writers Guild of America has issued letters to influential shareholders warning how a potential strike could impact their business. One such notice went out to Time Warner cautioning that a work stoppage may delay a merger in the works with AT&T. Littleton thought that while a strike could likely have an effect on their merger, the details were perhaps a bit "overstated".

If an agreement isn't reached by their deadline, writers could walk off the job on May 2. If they do, Littleton explained, "for the new fall season, things will be delayed. And then there are a lot of cable programs that go into production over the summer, so it'll have a pretty swift impact."   

To hear the full interview with Cynthia Littleton, click on the blue Media Player above.