“From Wall Street’s perspective, we estimate the impact of accepting the [writers’] proposal is largely negligible,” Bear Stearns wrote in a report last week.
If the AMPTP gave the striking WGA everything its negotiators are asking for, the world-renowned banking, brokerage and investment firm estimates that “the $120 million figure would carry an average impact of less than 1% on annual earnings per share for the media companies.
“That does not factor in any concessions by the writers’ side (the WGA), where the principal issue is a desire for a piece of ad dollars from new-media distribution. The potentially small financial impact suggests that studios (Alliance of Motion Pictures and Television Producers) are more concerned about setting a precedent in new-media revenue sharing.”
According to Wikipedia, Bear Stearns had total capital of approximately $66.7 billion and total assets of $350.4 billion as of November 2006. According to the April 2005 issue of Institutional Investor magazine, Bear Stearns is the seventh largest securities firm in terms of total capital.