Hollywood and the Financial Crisis

While the country debates how we got into and how we’ll get out of what’s been called the biggest financial crisis since the great depression, questions are beginning to be raised about how the stormy financial climate will affect the film industry.

Two weeks ago, Jeffrey Katzenburg of Dreamworks was reassuring other media executives that “we have seen that our product is, at worse, recession-resistant and, more optimistically and historically, has actually been recession-proof.” Other media moguls at that conference talked about how well prepared they were to face an economical downturn…at a gathering sponsored by Goldman Sachs. However, some studios are already feeling the effect of the credit crunch. New York Magazine points out that “Banks had already been pulling out of movie-studio investments over the last year thanks to the housing crisis, and Monday’s turmoil will most likely just accelerate the trend. To independent filmmakers, there seems to be a sense they are, if not in danger, more alone than they have ever been (see former post, where Ted Hope says, “And you can bet the Indie World isn’t going to get a government bail out like Wall Street and the Banking Industry have”).

More immediately, the $700 billion bailout (which includes other legislation folded into it) includes two tax breaks for the film industry, effectively giving them the same deductions other manufacturers receive for keeping work in the states. The Variety blog, Wilshire and Washingon, has a good summary of that here.

And that is where we stand right now.