Click to Skip Ad
Closing in...

Media Watch: Stock Market Hits Hollywood Hard

Photo of Jacob Combs By Jacob Combs | Thompson on Hollywood August 5, 2011 at 7:01AM

U.S. stocks rose Friday after some optimistic news from Europe following this week's steep stock market slide. Not surprisingly, this week's dizziness-inducing economic slingshot has been felt in cities all around the world, not least of which is Hollywood.
0
Thompson on Hollywood

U.S. stocks rose Friday after some optimistic news from Europe following this week's steep stock market slide. Not surprisingly, this week's dizziness-inducing economic slingshot has been felt in cities all around the world, not least of which is Hollywood.

Thursday's world-wide selloff--the worst since 2008--hit media companies especially hard. Hollywood is vulnerable in two regards: companies that depend on advertising revenue, and movie deals that are currently in the works. As film finance expert Jeff Steele told TheWrap, investors that are tied to traditional markets like Wall Street could spook at the stock market drop and back out of film deals they had been considering.

Companies that are more dependent on advertising are more likely to lose in the current economic environment. CBS fell 9.3 percent on Thursday, while Viacom lost 6.1 percent. Sony's shares hit a 52-week low, while Walt Disney and Time Warner finished below their 2010 closing prices.

Still, Steele says the stock market downturn might be an opportunity for investors looking to get into the media world to get a bargain in the process. Some see a chance for a wealthy tech titan (Apple, Google, Facebook), which have already had some success in their own right as content distributors, to acquire one of the entertainment industry's big names.

This article is related to: Media, Cash Crunch, Studios


E-Mail Updates






Festivals on TOH



Thompson on Hollywood

Born and raised in Manhattan, Anne Thompson grew up going to the Thalia and The New Yorker and wound up at grad Cinema Studies at NYU. She worked at United Artists and Film Comment before heading west as that magazine's west coast editor. She wrote for the LA Weekly, Sight and Sound, Empire, The New York Times and Entertainment Weekly before serving as West Coast Editor of Premiere. She wrote for The Washington Post, The London Observer, Wired, More, and Vanity Fair, and did staff stints at The Hollywood Reporter and Variety. She eventually took her blog Thompson on Hollywood to Indiewire. She taught film criticism at USC Critical Studies, and continues to host the fall semester of “Sneak Previews” for UCLA Extension.