Actors' Deal Estimated To Cost Studios $450M-600M A Year

The new actors’ three-year contract will collectively cost all the major Hollywood studios between $450 million and $600 million per year, according to Moody’s Investor Services.

But Moody’s says this will hardly impact the global movie/entertainment business --- which pulls in $100 billion a year.

“We believe studios are unlikely to change their overall production budgets to accommodate these higher costs, or reduce volume, and will instead look to save where it will not materially hurt the amount of material produced or quality of storytelling,” writes Neil Begley, senior vice president for Moody’s Investors Service, in a recent report.



He adds: “This includes using fewer A-list actors; greenlighting less on-location filming; and trimming post production and special effects spending.”

Begley says studios will also look for more tax breaks, financing subsidies, and more low-cost shooting locations outside the U.S. 

Actors are believed to be receiving bonus pay residuals on streaming shows, depending on the viewing measurement performance of that content -- estimated to be around $40 million per year.

This is believed to be more than the new writers’ contract -- which also includes a bump in pay for streaming for TV shows and movies. 

The new agreement between the movie studios and the actors union, SAG-AFTRA, ended a nearly four-month-long strike, which had been among the longest work stoppages ever in Hollywood. 

Under the new SAG-AFTRA deal, actors will also get some protection “guardrails” against growing use of AI technology and receive compensation for digital replicas of performers and performances.

Actors will begin voting to approve the new contract on Tuesday. 

Begley estimates the four-month old actors' strike and the longer writers' strike gave the studios “a cash flow benefit in excess of $10 billion,”  adding: “The strike period provided a temporary working capital free cash flow boon, with production limited to much lower-cost, unscripted programming.”

1 comment about "Actors' Deal Estimated To Cost Studios $450M-600M A Year".
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  1. Ben B from Retired, November 13, 2023 at 8:05 p.m.

    I like how the Union says that this deal will cut the pay for the studios and the CEO which will be passed along to those that stream and other things the studios & CEO's aren't taking a pay cut. No matter how much spin the actors & actress union says about the new deal.

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