Hollywood Keeps Rolling

There's no slowing down Hollywood. Reversing earlier caution, the major movie studios will begin production on 48 new films before this summer, according to Variety. This bombs-away attitude means the studios -- after having halted approvals for all new films about a year ago -- are now betting that the threatened Screen Actors Guild strike won't happen.

But if a strike does occur, and actors across Tinseltown walk away from scores of productions in progress, it will mean the loss of the enormous investment -- hundreds of millions, according to Variety -- that the studios are currently pouring into their development slates.

So just how big a bet is that?

"They're taking a risk" by moving ahead with the planned films, says Jim Janowitz, an attorney who chairs the entertainment practice at Pryor Cashman LLP in New York. "But I don't think there's going to be a strike, and obviously they don't either. Eventually, threats wear thin."

Sure, the studios, and much of Hollywood for that matter, thinks that S.A.G.'s threats are empty. But don't expect anyone to walk into a new production with blinders on. Instead, actors will most likely be asked to sign strike-specific contracts that commit them to return to strike-stalled productions as soon as is practicable after a possible strike ends.

Janowitz says his son, for instance, is in a new film, Taking Woodstock, directed by Ang Lee, that began shooting in August. According to Janowitz senior, the actors all had to sign agreements to make themselves available to resume shooting should there be a strike.

Agreements like that should help reduce heartburn for executives at studios like Fox--which has the longest development slate of any of the major studios.

Fox's ten films include Date Night, a comedy starring Tina Fey and Steve Carell as a married couple, and Avatar, a 3-D sci-fi film from director James Cameron.

Other notable projects include Sex and the City 2 from New Line; M. Night Shyamalan's shot at continued redemption, The Last Airbender, from Paramount; and a Robin Hood spin-off, Nottingham, from Universal, starring Russell Crowe and directed by Ridley Scott in a Gladiator reunion.

As for financing all those films, production deals are currently in place through 2011 at most of the major studios, so the economic turmoil of the past several weeks shouldn't affect them.

In addition, the studios are "all part of very big companies that can afford to do these things," says Janowitz.

"They may choose to take fewer risks, develop fewer properties to avoid wasting money, or cut back, but these companies" -- Time Warner, which owns Warner Brothers; News Corp., which owns Fox; G.E., which owns Universal; and Sony and Disney, which own eponymous studios -- "have tremendous capital resources. Even in a desperate market, the time will come when they can borrow money again at rates that are reasonable compared to the economy at large," says Janowitz.

What's more, the movie business is an attractive one from the perspective of outside investors like hedge funds, he says, because it usually doesn't decline in correlation with the rest of the economy. People may pass on a new house or car, but they aren't likely to stop going to the movies. In fact, they may go more often.

"The worse the times, the more there is a need for entertainment," says Janowitz.

If that's indeed the case, then studios can expect some impressive box-office numbers in the very near future.

by Sophia Banay