Veteran studio executive, and outgoing Sony Pictures Entertainment CEO Tony Vinciquerra believes one of the long-term consequences of last year’s Hollywood strikes will be more film and TV production leaving the U.S. at a time when the overall industry is contracting.
Speaking at the international television market MIPCOM on Monday, Vinciquerra, who is stepping down as SPE boss at the end of the year, said the tough new terms in the SAG-AFTRA and WGA agreements — “both the length of [contracts] and the contract terms” mean productions are increasingly going abroad to shoot. “The impact that has had on business has been far more severe than anyone understands, and it’s still impacting us, both on the film and the television side,” he said.
“We tried to convince [the unions], we tried to talk to the unions about what we thought would happen, and now it is happening,” said Vinciquerra. “While the unions were all yelling about corporate greed, somewhere in the neighborhood of 15,000 non-union jobs disappeared in our industry over the last two or three years…that had nothing to do with the strikes. That was over a three-year period. It was the business and the business was contracting and is contracting.”
Significantly lower below-the-line costs, as well as generous international tax incentives, mean the coast of producing in U.S. has become significantly higher than abroad, he noted.
“There’s a very significant difference in California, which has been the hardest hit [and] just hasn’t responded to what’s going on in the world of incentives,” Vinciquerra said. “The cost of doing business in California is so high that it’s very difficult to price out a film.”
Overall, Vinciquerra said he expected further cuts and layoffs in the industry. “Over the next 18 to 24 months, it’s going to be very chaotic, there’s going to be mergers, consolidation, sales, bankruptcies, potentially,” he said. “But after that happens, these companies, all of our colleagues, we’re going to be in a very stable position.”
Vinciquerra gave hints of his future plans after Sony. The exec, previously president and CEO of Fox Networks Group, joined SPE in 2017 in the aftermath of the devastating Sony hack, and is widely credited for helping turn the company around. Last month he announced he would be stepping down as Sony CEO, to be replaced by Ravi Ahuja, currently SPE president and COO.
“I had the intention to go to Sony for a much shorter period of time. But then we had COVID, and then we had the strikes. My goal was to do what we did, to get the company back on track, to stabilize it [which] I think we’ve accomplished,” said Vinciquerra. “I was working [before] as a private equity advisor and that’s what I’ll probably go back to do. This is not retirement. I’m just changing direction. I already did this once when I left Fox. There’s a famous quote out there that nobody leaves these jobs intentionally. Well, I’ve done it twice now.”