Tonight, Hollywood studios’ contract with the Writers Guild of America runs out—and an impending writers’ strike could script some potentially bad storylines for entertainment-related stocks.
Per The Hollywood Reporter, the potential writers’ strike and other recent factors, such as a downturn in ratings and unclear advertising outlook, have already affected stocks of related companies. In one Guggenheim Securities report quoted in THR‘s story, an analyst said,”In the past several days, investor concern toward advertising trends—following lower-than-consensus estimated domestic ad agency growth—and the potential of a writers strike have moved to the forefront and have likely been key contributors to weakness [of entertainment stocks].”
Still, the impact of a short-lived writers’ strike on Wall Street would likely be muted, according to Hal Vogel, CEO of Vogel Capital Management. He told THR that a strike would have to last longer than a month for its reverberations to be felt.
For more on a writers’ strike’s potential fallout, read the full report from THR.
—RealClearLife
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