WGA Strike Arm Has Long Reach

It appears that the Writers Guild of America (WGA) strike is beginning to have an impact, not only in U.S. television and movie making, but is now affecting how the rest of the entertainment world industry is doing business — at least in Europe.

Pinewood Shepperton Studios in England have taken a major blow to its bottom line since the strike has endured into its third full week and looks to be heading for week four. It has announced the forced cancellation of its backing for a major film, rumored to be Ron Howard’s “Angels and Demons,” which was delayed in production due to the strike.

According to Daily Variety sources, Ron Howard’s pic had already set up a production office at Shepperton and was gearing up for a winter set build leading to shooting at the studios in February 2008, but with the delay Pinewood Shepperton’s share price plummeted by 7.55%.

“Whilst the terms of the customer’s contracted use of film stages with the company are to be honored, the cancellation of this production, during the current Writers Guild of America strike, will adversely impact ancillary film revenues by approximately £3 million ($6.2 million), mainly in 2008,” said Pinewood in a statement.

“Against the context of the current Writers Guild strike and the uncertainty of the forthcoming negotiations of the Screen Actors Guild, whilst every effort will now be made to replace the above revenues this will prove challenging.”

Across the rest of Europe, the entertainment market is gearing up for an anticipated hit to their revenue as other big budget films expected to be shot this year on soundstages in places like Italy, Bugaria and the Czech Republic are now in danger of being either canceled altogether, or delayed into next year. Either one of these options would hurt studios located in these areas since the revenue coming from those productions has already been calculated for next year’s budget.

Studios will not be the only one’s hit. Local economies will also suffer as workers in these various locations have come to rely on U.S. film productions for a steady paycheck.

Rome is biting its nails since word of the “Angels and Demons” delay. Several scenes for the film were to be shot on locations there and in other parts of Italy.

One economic report has stated that, “Further timing delays by major productions are now expected to impact revenues realized in the current financial year, again to the benefit of the first half of 2008. Every effort is being made to replace these deferred productions, however if these fail to materialize the outturn for 2007 film revenues will not match the levels achieved in 2006.”

Uncertainty over the length of the strike is causing some studios to ramp up local European film production, but this is not expected to offset the losses that will be encurred from delays in American film shooting throughout the EU community of nations.

“The writers strike has added another variable outside Pinewood’s control to go with uncertainties over the tax relief system and the exchange rate. This is not a good thing,” says Iain Staples, an analyst with City-based equity research firm Clear Capital.

One film currently in production, Spike Lee’s “Miracle at St. Anna,” a WWII drama about four black American soldiers trapped in a Tuscan village while fighting the Nazis, has not been stopped by the writer’s work stoppage. It is now shooting in different Tuscan locations.

Germany, once having nearly shut-down production of the Tom Cruise project “Valkyrie,” is now glad it recended its decision to do so. Two other films being produced there, “The Reader” and “The International” are not expected to see any slow down of production, but nothing is expected for Germany’s plate after that, especially if the strike lingers on. Even if the strike were to get settled before the end of the year, Germany’s Federal Film Fund will see some decline in the number of Hollywood projects for 2008.

“At the moment we aren’t experiencing the effects of the strike,” says Charly Woebcken, CEO and president of Studio Babelsberg in Germany. “We hope that the discord can be solved with the least amount of damage to Hollywood.”