Wall Street yawns at strike

Stock prices for most of the big media companies have barely budged since writers walked off their jobs in early November - a reflection of just how large and diversified these businesses are (and what an uphill battle the Writers Guild faces in trying to cut a breakthrough deal). “What shows are on this January don't make any difference to the value of these companies in a couple of years," Mark Greenberg, a senior portfolio manager with AIM Investments told Variety. "I can pretty much promise strikes do get settled. Each side will make concessions." This is not what the WGA wants to hear – nor are the comments of Wall Street watcher Henry Blodget, who writes on Silicon Alley Insider that "after a few annoying weeks of getting used to life without new TV shows, the audience is no longer listening. The longer the strike goes on, the worse a deal the writers are likely to get." Not everyone agrees with that assessment, of course, but those stock prices speak volumes about investor reaction. Here's more from Variety:

One investor explained that Wall Street never put much stock in executive hype about a digital windfall just around the corner -- hype the writers are throwing back at studios, who now say digital is still too undeveloped to be profitable. Digital revenue varies from the millions at some congloms to the nearly $1 billion at News Corp.'s Fox Interactive. Profits are nil, except at Fox Interactive, where they're driven by MySpace, the huge social-networking site that uses little scripted content in any case.

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From Wall Street's purview, the sides are ensnarled in a dogfight over a shrinking pool of revenues. And at least for now, digital distribution of shows is not the cure-all for declines in traditional profit-generating areas like syndication and international sales. Studios have taken a tough stance in the negotiations with the Writers Guild of America because contract talks with directors (who may wind up cutting a deal before the scribes) and actors are just around the corner next year.