Bear Stearns Says Studios are Full of It on Writers Strike

Of course, given their track record recently, I have put them in my investment bank dead pool because of their missteps on the credit crisis, but they have issued a report explicitly stating that the writers demands would have a negligible impact on the industry (Original is sub reqd, excerpt is from Hollywood United):

“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.

From the reports that I’ve read, it appears that the chief negotiator is the same guy who suckered the writers on DVDs many years back, and he’s operating on his own need for legacy, and some of the studios, particularly those heavily into TV production, are not happy with him.

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