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Writer's strike: Winners and losers

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:

  • CBS Corp. (NYSE: CBS) - David Letterman's writers will stop writing jokes and it will be interesting to see whether CBS will just start with the re-runs.
  • The Walt Disney Companies (NYSE: DIS) - ABC will be able to run a few new episodes of Boston Legal, Lost, Grey's Anatomy, and Desperate Housewives before its audience gets bored with the re-runs.
  • General Electric (NYSE: GE) - NBC Universal will probably run out of jokes for Jay Leno and scripts for 30 Rock after a few shows, unless the writers and producers can agree.
  • News Corp. (NYSE: NWS) - I am not sure how many new episodes of The Simpsons are already written, but will News Corp. lose its audience when the re-runs start?
  • Sony Corp. (NYSE: SNE) - I am not sure what shows or movies Sony is involved with but it will surely be hurt if it can't produce new movies.
  • Time Warner (NYSE: TWX), parent of BloggingStocks, will surely be hurt if its HBO unit can't produce new shows and its Warner Brothers can't complete new movies (no worries though, BloggingStocks writers will keep on writing).
  • Viacom (NYSE: VIA) will lose the audiences of its Comedy Central shows -- such as John Stewart's Daily Show and Stephen Colbert's Colbert Report. This morning's announcement that Viacom earned 96 cents a share -- beating analysts' 59 cents a share estimate -- could be a last hurrah since so much of that profit was due to the success of Transformers. It could be a while before the sequel can be written.

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.

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Last updated: August 20, 2008: 12:15 PM

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