The Economic Impact of the Hollywood Strike: A Comprehensive Analysis

According to Shon LeBlanc, co-owner of Valentino’s Costume Group, the store can no longer afford to pay its rent. Last year, the store had finally recovered from the challenges brought about by the pandemic. Hoping to capitalize on this positive period, the store moved to a larger space in January. However, with the Hollywood writers and actors on strike, Valentino’s can no longer afford its rent. This is just one example of the ripple effects of the strike, as few sectors in the entertainment industry have been spared. From studio rentals to set construction, dry cleaning costumes, and transporting sets, it is difficult to find any part of Los Angeles’ economy that has not been impacted. A film set in just one day can generate tens of thousands of dollars, or even hundreds of thousands depending on the level of activity.

Assessing the Full Range of Impacts: A Challenging Task

The last writers’ strike, which occurred over 15 years ago, took three months to resolve and is estimated to have cost $2.1 billion in production losses. This time, it will be more difficult to measure the impact, given the significant changes that have occurred in production costs, locations, and schedules in recent years due to technological advancements and increased globalization.


Productions are no longer seen as standalone entities but often involve multiple companies and even countries. For example, projects are often sent to New Zealand for visual effects. The larger the production, the more likely it is to involve various tax credits.

Both guilds are seeking to address the challenges posed by the dominance of online streaming services, which have transformed all aspects of production, from how projects are written to their release. Writers struggle to earn sufficient income due to the use of smaller teams for shorter periods. Actors are concerned about protections regarding the use of artificial intelligence.

While negotiations between the union and producers have resumed, it is not expected that actors and studios will return to the negotiating table.

During an early August conference call, Hudson Pacific executives attempted to alleviate concerns about the financial impact of strikes on their businesses while acknowledging the reality behind these fears. The company owns both Quixote and Sunset Studios, two major equipment rental and studio companies in the entertainment industry.

“We are all acutely aware of the ‘shrapnel’ that surrounds the industry at large and all the residual businesses that are impacted. It’s going to start to get pretty painful,” warned CEO Victor Coleman in response to questions about the duration of the strikes. “It will be damaging, and I think everyone is very aware of that.

Every Aspect Affected

The aftermath extends beyond the entertainment industry and affects all corners of Los Angeles. Restaurants, cafes, and even nail salons neighboring the major studios are all desperately hoping for a quick resolution.

Patys, a neighborhood staple in Toluca Lake that counts regulars like Steve Carell and Adam Sandler, has seen a significant decline in business in terms of both customers and catering orders, according to owner George Metsos. They are losing obvious customers – actors, writers, crew members – but also other regulars who are no longer coming: electricians, set carpenters, and drivers who used to stop by for lunch on their way to work at nearby studios.

Emmanuel Pelargos, owner of Astro Burger across from Paramount Studios in Hollywood, says that the regular presence of striking writers and actors on the picket lines has not made up for the decline in business due to the halt in productions.

“They come sometimes,” he said of the striking members. “But it’s mostly to use the restroom.

No distributed aid

Corrie Sommers, Vice President of the Toluca Lake Chamber of Commerce, believes that the timing of the strikes, coming on the heels of the financial recovery from the pandemic, is particularly tough on small businesses. She laments the lack of necessary assistance, saying that no one is providing financial aid to help them recover. This lack of support is affecting everyone, including potential homebuyers who are now hesitant to make a purchase. According to Sommers, several clients have expressed the need to wait until next year because they are uncertain about the current situation.

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