Wall Street: Congloms Let Town Suffer Rather Than Make Fair Deal

Last week, Wall Street firm Bear Stearns issued a report stating that even if the Writers Guild got every single provision it has been asking for in a new contract, the impact on the conglomerates' bottom line would be "negligible." It's encouraging to see Wall Street saying what we've known all along: that the WGA's proposals are fair, reasonable and affordable. (They don't even keep up with inflation!) On the other hand, it is absolutely infuriating that the companies would walk out of negotiations and happily keep thousands of people out of work and wreak havoc on the LA economy over something... "negligible." It is not negligible to countless families in our industry and our region.

MediaPost.com has a summary of the Bear Stearns report here (reg. req.) The highlights:

"From Wall Street's perspective, we estimate the impact of accepting the [writers'] proposal is largely negligible," Bear Stearns wrote in a report last week.
The firm estimates that the $120 million figure would carry an average impact of less than 1% on annual earnings per share for the media companies. That does not factor in any concessions by the writers' side (the WGA), where the principal issue is a desire for a piece of ad dollars from new-media distribution.
The potentially small financial impact suggests that studios (Alliance of Motion Pictures and Television Producers) are more concerned about setting a precedent in new-media revenue sharing. However, Bear Stearns wrote that the writers' forecast for that market "strikes us as fairly aggressive." The firm hinted that studios are looking to the future. They are concerned that a favorable settlement would embolden directors and actors in their coming renegotiations.