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Report: Writers Strike Not as Expensive as Billed

29 Nov, 2007 By: Erik Gruenwedel

The final cost to the Los Angeles economy from the ongoing writers strike should it extend through next March is not the frequently cited $1 billion tally, according to a new report.It is projected to be less than $400 million, the new report says.

The UCLA Anderson School of Management cites a forecast written by economist Jerry Nickelsburg that dismisses previously reported “grossly inflated” estimates about the local economic impact of a long strike.

“Virtually everywhere in the media, in City Hall and in Sacramento this greater than $1 billion economic impact is taken as fact,” Nickelsburg said.

He said economic forecasts based on the 1988 writers strike neglected current strike elements such as inventory stockpiling by the networks (episodic programming), substitution to other goods (alternative programming from the Internet and video games) and composition of product changes (influx of reality programming).

“Even if the strike runs as long as the record 1988 strike, it will be about one-third or less of the currently accepted $1 billion estimate,” Nickelsburg said.

Negotiations between the Writers Guild of America and the Alliance of Motion Picture & Television Producers over issues related to residuals for DVD and new media remain ongoing.Writers went on strike Nov. 5.

Representatives from the WGA and AMPTP were not immediately available for comment.

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