We were all set to ignore the financial crisis until someone actually fired us, but then we realized it may have already hit home — is Hollywood screwed? While plans for federal intervention have given the market a boost this morning, media-company stocks have been slumping all week, with just a slight uptick yesterday. Predictably, Hollywood executives are playing down concerns — DreamWorks’ Jeffrey Katzenberg kept the faith at an investor conference, saying “we have seen that our product is, at worse, recession-resistant and, more optimistically and historically, has actually been recession-proof.” Time Warner’s Jeffery Bewkes even framed the down market as an opportunity, saying his company might take this time to expand film production. Really?
Times reports that DreamWorks SKG’s half-billion-dollar deal with Indian company Reliance is being held up because there is still several hundred million dollars in debt financing left to be raised. Banks had already been pulling out of movie-studio investments over the last year thanks to the housing crisis, and Monday’s turmoil will most likely just accelerate the trend. This may not necessarily be a terrible thing — less money being thrown around could mean more careful decisions and less terrible movies — but when was the last time Hollywood reacted calmly and reasonably to a crisis?