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Writer's strike: Winners and losers

Posted Nov 2nd 2007 10:22AM by Peter Cohan
Filed under: Earnings reports, Google (GOOG), General Electric (GE), Time Warner (TWX), Starbucks (SBUX), Employees, Walt Disney (DIS), Viacom (VIA), Sony Corp ADR (SNE), CBS Corp 'B' (CBS), News Corp'B' (NWS)

The New York Times reports that 200,000 Hollywood workers are about to be affected by the imminent strike of the writers. And Teamsters -- while not on strike -- are not likely to cross the writers' picket lines. The fight is over how the DVD and Internet pies get split between producers and writers. Which stocks will be winners and losers?

One winner is Starbucks Corp. (NASDAQ: SBUX) as its shops will undoubtedly attract writers who normally would be reporting to a corporate office. They'll spend time using Starbucks wireless Internet access and drinking its over-priced Joe. In addition to all the people who will stop watching their favorite TV shows, the corporate losers from the strike will include the following:

How much will the strike cost these companies? It depends on how long it lasts and how much the audience dwindles as they start showing re-runs. Advertisers will start to look elsewhere during the strike -- maybe the Internet. And if these advertisers do shift more money to the Web, will they come back to TV once the strike is over?

This suggests another possible winner -- Google Inc. (NASDAQ: GOOG). Can $1,000 a share be far away?

Which shows will you miss the most? Which other winners and losers do you see from the strike?

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

Tags: cbs, dis, ge, goog, inthenews, nws, sbux, sne, twx, via

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