Everyday working class folks are taking it in the neck while the companies that lay them off are reaping huge profits and winning hundreds of millions of dollars in corporate welfare. Is that the logline for Oliver Stone’s latest sequel, “Wall Street 3: Greed is Good”? Nope. That’s what’s happening in Hollywood right now.
The multi-gajillionaires who run Pixar have announced a round of layoffs that will pull the rug out from under 5% of its 1200 staffers.
The multi-multi-gajillionaires who run Warner Bros. have announced a coming bloodbath where more than 10% of jobs will be cut, roughly 900 to 1000 of its 9000 person workforce.
Hollywood studios might be laying off staff, but their corporate owners are generating strong profits. Entertainment and media, lumped together, historically has been one of the more profitable U.S.-based industries, and 2014 should be no exception.
An Ernst & Young study released Sept. 15 reveals that the so-called E&M industry will deliver profit margins this year of 28 percent, a full percentage point better than the S&P 500 average.
But not all areas of the industry are thriving. The study shows that while cable operators — including Comcast, Time Warner Cable and others — are delivering 41 percent profit margins[.]
While it’s true that the film, TV, and music divisions of these huge leftwing multinationals are not doing anywhere near as well as the company overall, California Governor Jerry Brown just agreed to hand these entertainment companies a whopping $330 million in yearly tax credits. That’s free money.
What kind of scam are these Hollywood studios playing? What was the plan? To hang onto these workers long enough to win these tax credits? Maybe the idea was to let these poor saps help pay for the $330 million in tax credits but not let them benefit from the job security those credits were meant to create.
Gordon Gekko would be proud.
Follow John Nolte on Twitter @NolteNC