The strike involving the United States’ largest media professionals labor union, SAG-AFTRA, could have a measurable negative impact on Hungary’s GDP, business daily Világgazdaság reports.
Hollywood writers have been on strike since May 1, and the actors’ union went on strike in mid-July. This means that U.S. film and TV production has come to a complete standstill. The effects of this will spill over to Hungary in the short term, as several major Hollywood studios have been coming to Hungary to film every year.
“With Hollywood studios gone, Hungary will lose around HUF 70-80 billion (€180 million to €206 million) in tax revenue,” tax consultancy and law firm Andersen Hungary, wrote in a statement.
The Hungarian film industry closed a record year in 2022, with revenues exceeding HUF 250 billion, 90 percent of which came from U.S. sources.
The growth of the domestic film industry has been driven by three factors. Firstly, foreign studios were attracted by the Hungarian support system established by the 2004 film law. In addition, given the large number of foreign studios coming to Hungary, the weakening forint also helped the domestic film industry, as American filmmakers were paid in dollars for their work. Finally, inflation has also boosted Hungarian revenues, as the fees for services provided to filmmakers have increased substantially.
Hungary is one of the top 10 film production locations in the world.
In Europe, only the British film industry is larger than Hungary’s. The main aim of the domestic sector is to serve overseas filmmakers, which is why the strike by U.S. screenwriters and actors is so painful for the 20,000 or so Hungarian workers in the sector.
Károly Radnai of Andersen Global, a global tax firm, said the strike of the screenwriters and actors will have two different impacts on the Hungarian film industry:
“The screenwriters’ strike only foresaw a medium-term slowdown, without immediate damage. Ongoing productions and those already in pre-production were not affected, there were no stoppages, only the arrival of new projects was slowed down. In contrast, the Hollywood actors’ union strike led to an immediate shutdown of almost all major productions, since without the main actors and actresses, filming cannot be resumed without the main cast and principal actors.”
