Steve Stanton at SOT Advisory

When the government tells you: “We’re in the same boat”

When you realize we have entered the singularity and you are running out of time

The Hollywood cost structure was too high before generative AI. A growing percentate of footage was filmed/created in Canada and other locations (eg other states in USA). Now that generative AI can create Hollywood-level clips in minutes while sitting on your couch with a $300 Chromebook... The cost drivers that made sense 50 years ago suddenly become obsolete.... NYC taxi medallions were >$1m in 2011-2014. Rideshare apps caused an 80-90% collapse in the value. Entertainment is going through the same thing... This is not opinion. This is a reality that must be navigated. Here's a quick Google AI result explaining some drivers of movie production costs in Hollywood: Unions and organizations in the USA, particularly in California, increase film production costs through negotiated wage minimums, strict, expensive overtime rules, mandatory pension/health contributions, and required staffing minimums (featherbedding). Key organizations adding to costs include SAG-AFTRA, IATSE, Teamsters Local 399, and the WGA/DGA. Primary Unions and Organizations Driving Costs SAG-AFTRA (Screen Actors Guild - American Federation of Television and Radio Artists): Covers actors and talent, requiring minimum pay rates and adding 21% or more on top of actor pay for pension and health funds. IATSE (International Alliance of Theatrical Stage Employees): Represents technicians, artisans, and craftspersons (camera operators, grips, hair/makeup, hair designers). They enforce strict rules on daily turnaround times, mandatory meal breaks, and higher rates for weekend work. Teamsters Local 399: Represents drivers, animal handlers, location managers, and casting directors. They ensure minimum staffing for vehicle transport and location services, often increasing transportation budgets. WGA (Writers Guild of America) & DGA (Directors Guild of America): Dictate minimum compensation and residual structures for writers and directors. Art Directors Guild (ADG, IATSE Local 800): Represents production designers and set designers.📷California Film Commission (.gov) +6 Specific Cost Drivers (Especially in California) High Mandatory Fringe Benefits: In addition to pay, producers must pay into union health and pension plans, which can significantly raise the total cost of labor, particularly with SAG-AFTRA and IATSE. Strict Labor Compliance: California's labor laws, combined with union agreements, require adherence to specific, high-cost rules regarding overtime, meal penalties (e.g., if lunch is delayed by minutes), and mandatory rest periods. Staffing Requirements: Unions often require specific numbers of crew members, even if the producer feels they are not necessary, increasing the overall cost. Administrative Expenses: Managing union compliance requires dedicated staff or services to handle complex, specialized payroll

Gas prices just hit $3.70 — up 25% in 17 days. There’s 5 ways Congress and states can immediately lower gas prices by up to $1.10. This could make gas *cheaper* than before the war.