Daily Archives: August 8, 2007

Credit Crunch Heading West – Terrible Timing for Guilds

The headlines coming from Wall Street these days sing only one tune: the end of cheap credit. That means interest rates are rising and the risks associated with companies that have borrowed heavily or those buyout funds that use leverage to take over companies are headed for tough times. But it may surprise folks to learn that this will impact Hollywood, too, and the timing could not be worse. One of the trends that has not gotten enough attention in the EMI sector is the role of private equity in changing the ownership structure of big media companies. Now the funds that the big studios increasinly rely on to produce films may get more scarce and come with tougher terms. That means heavier going on the financial side of the business just as the Guilds try to make their case in contract negotiations.

Financial Times: Credit Crunch, the movies’ latest drama