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Lessons from Hollywood Strikes: A Business Perspective on SoCal’s Economic Landscape and Long-Term Impact

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In the ever-glamorous world of Hollywood, it’s easy to forget that behind the dazzling façade lies an industry built on the hard work of businessmen and corporations, perseverance, and the pursuit of success. But when the strikes hit and the spotlight shifts from the silver screen to the streets, questions arise about what these tumultuous times can teach the industry workers.

The recent strikes in Hollywood saw writers and actors taking to the picket lines. This had a significant impact on other workers in the industry, such as Directors of Photography (DPs), gaffers, grips, line producers and more. Many of these workers rely on a steady flow of projects to support their livelihoods, and prolonged strikes disrupt their income, leaving them financially vulnerable.  

Additionally, the local economy of California has been hit by these strikes. Business experts are now calculating possible long-term impact on the SoCal’s economy, also taking into account the recession, inflation and homeless issues which are devastating not only LA, but also other major cities of California. The entertainment industry is a major contributor to the state’s economy, generating substantial revenue through film and television production. When strikes disrupt these activities, it not only affects the livelihoods of industry workers but also has a ripple effect on local businesses that rely on the industry’s patronage, such as restaurants, hotels, and various service providers.

The decision by the government of California not to approve compensation for those on strike has added to the strain on the affected workers. This action, though rooted in concerns about the state’s unemployment trust fund debt, places an additional burden on individuals who are already enduring financial hardships due to the strikes. It highlights the complex and often contentious relationship between labor rights and government policies, which can have far-reaching consequences for the well-being of workers.

Historically, strikes have played a crucial role in securing workers’ rights and better working conditions. While they can be disruptive in the short term, they have often led to long-term benefits for the labor force. However, the contemporary landscape of the entertainment industry raises questions about the efficacy and consequences of strikes in the context of a rapidly changing media landscape.

Our office reached out to film director and showrunner Victor Migalchan and asked his perspective on the lessons that can be gleaned from these strikes, which saw professionals and amateurs from various sectors taking a stand for their rights and possible outcomes for businesses and the economy.

Migalchan stressed the importance of understanding that in the business world, everything must be earned. This principle holds true in the fiercely competitive entertainment industry. He remarked, “People get what they earn and deserve. It doesn’t work as charity; you make more if you bring more value to the business.” This perspective underscores the notion that success is not handed out freely but is the product of dedication, skill, and hard work. With regards to protesters’ concerns about AI, Migalchan said, “It is inevitable. All industries evolve in different ways. Look at Detroit or Silicon Valley. Businesses have way more things to worry about, not only single pay checks. They have way more responsibilities. But believe me; AI will never substitute Q. Tarantino, M. Scorsese, J. Cameron, A. Sorkin, F. Darabond, P. Haggis, D. Ellin, etc. How come no one is worried about CBDC?”

In an industry as competitive as Hollywood, those who stand out often go way more than the extra mile. The path to stardom is paved not only with auditions, rejections, and tireless efforts to improve one’s craft but also with deep business and marketing analysis. Migalchan emphasized that, on the one hand, this journey requires a firm connection with reality, common sense, and a keen understanding of economic principles. On the other hand, it is effort and time correlation. Lots of actors and some other industry workers are still taking an old and outdated path. Instead of working on marketing and their own brand, they follow some advisors and spend money on unnecessary things like tons of classes, training, coaching sessions, and the like. “Remember Quentin Tarantino said that making his first film was his best film school,” said Migalchan. Yes, they might become working actors, but it is not a path to becoming a star and developing wealth. A successful career development in Hollywood doesn’t guarantee instant stardom or immense wealth. Many professionals work diligently behind the scenes to make the magic happen, but their efforts often go unnoticed. It’s caused by a lack of financial and marketing understanding. 

“Some people need to take a break, reflect, and ask themselves: Who am I, and who do I want to be? What’s my real goal?” says Migalchan. “Do you want to be a working actor or actress? Or a film star? There is a big difference—the difference in understanding the system, goals, strategy, marketing, financial planning, branding, and, of course, in their income.” Understanding the distinction between a working actor or writer and a star can help individuals make informed career decisions.

Moreover, Migalchan points out that some of the most prominent names in Hollywood, including Martin Scorsese, Sylvester Stallone, Aaron Sorkin, and Quentin Tarantino, weren’t noticed around strikes. This decision raises an important question: Why did they abstain, and what can we learn from their choice?

Migalchan suggests that these industry titans and legends know the importance of representation and negotiation. He emphasizes that unions, agencies, lawyers, and managers play a crucial role in negotiation and ensuring fair compensation and working conditions for entertainment professionals. If some representatives are not doing their job effectively, it is essential to address the issue collectively rather than resort to strikes, especially during the recession. “Spitting in a well you may drink from in the future might not be the best choice.”

While protesting for better conditions and compensation is a valid approach, it is also essential for entertainment professionals to leverage the tools they already possess. Migalchan suggests that getting financial and marketing education, as well as developing multiple streams of income, is crucial for financial stability.

When some protesters expressed their struggles despite working in the entertainment industry for a decade, Migalchan offered a sobering perspective. “They weren’t in business; they were working for someone, and it’s a big difference,” he asserts. Living from paycheck to paycheck is a precarious financial position, and it’s vital to understand that entitlement without effort leads to a dead-end.

The advent of social media has played a significant role in creating the illusion of success without substance. Migalchan advises using social media as a tool rather than allowing it to become a distorted reflection of one’s life. Success is built on discipline, hard work, continuous effort, the value one represents, and contribution to the community, not just online appearances.

Perhaps the most crucial lesson from the strikes that needs to be learned is the necessity of investing in oneself. Migalchan underscores that working for assets—not money—is one of the keys to financial security. He also highlights the need for financial education and step-by-step wealth creation, sharing that successful directors, actors and writers, who are often the stars of the industry, invest and grow their wealth by diversifying their financial portfolios. “They invest in assets!” Migalchan stresses. In a world where the pursuit of wealth and success can often be overshadowed by short-term thinking, Migalchan’s advice is a reminder of the wisdom in having long-term plans, strategies, and tactics. “Warren Buffet doesn’t invest short term. There is a reason for that,” he said.

Reflecting on the strikes, Migalchan expressed hope that some protesters realized the need to use existing tools as leverage and to foster multiple streams of income. He also touched on the importance of negotiation and cooperation between workers and their representatives and unions. “Blocking workflow for others who have families and wish to work is understandable but isn’t wise. There is an easy choice, and there is always a better choice,” he noted.

In the end, the strikes in Hollywood offer an opportunity for growth and reflection. As Victor Migalchan puts it, “We don’t know what will happen after the strikes stop and strikers go home. I hope it will be a good lesson for the employees to learn and develop; I hope it will not be too late for the businesses, and their losses won’t be critical. This way, the employees will have a chance and a workplace to return to and hopefully appreciate it this time.”

As the strikes in Hollywood subside and the industry attempts to return to normalcy, the lessons learned during this tumultuous period will continue to resonate. Migalchan’s insights serve as an efficient perspective for those who strive for success in Hollywood and beyond.

In the grand tapestry of Los Angeles and California’s economy, the recent Hollywood strikes have served as a stark reminder of the intricate interplay between the entertainment industry and the local business landscape. As the dust settles, the resilience and adaptability of both industry workers and businesses will be crucial in restoring stability. These challenges may pave the way for a more robust and informed entertainment industry in the state, one that thrives on the foundation of hard work and prudent business practices. 

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