Fitch: WGA strike impact limited

Fitch Ratings said it believes that the decision to strike by the Writers Guild of America (WGA) has limited impact on the credit profile of the media and entertainment sector over the short-term.

However, the agency said that a prolonged strike could impact specific sub-segments of the industry, adding that it classifies the sub-segments reliant on the WGA into six areas: Broadcast TV Networks, TV Studios, Cable TV Networks, Movie Studios, Movie Exhibitors and the TV Broadcast Affiliates.

The fact that many of these sub-sectors are housed within highly diversified media conglomerates mutes much of the impact of the strike on the overall credit profile of companies within the sector, Fitch noted.

Specifically, News Corp. (BBB, stable outlook), Time Warner (BBB, stable outlook ), Disney (A-, stable outlook), Viacom (BBB, stable outlook), CBS (BBB, stable outlook), General Electric (Not Rated) and Sony (BBB+, negative outlook) together account for a large portion of these sub-segments through their various business lines, Fitch said.

The agency added that each of these entities has revenue streams that are not dependent on the WGA, especially over the short-term, as well as various alternatives to at least partially offset down time from WGA programming.

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