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Sep18
Will FED Rate Cuts Help Movie Industry?

The rate cut by the FED of 50 basis points probably won't have much impact on the movie industry, as most of their financing comes from private equity deals.

Another reason is the studios have their financing in place for the next several years, so it won't make a difference over the short run.

Probably the best news for the industry with the rate cut is it should cause people to be more open to spending money on entertainment; something they cut back on if they think things are difficult, focusing more on the basics of life.

There is also the selling of merchandise connected to movies that could have the most significant impact, as the Holiday season was already panning out as being tough with the toy recalls permeating the news. The segment needed some good news to make them want to spend.

Will%20fed%20rate%20cuts%20help%20movie%20industry.jpg

The rate cut should give consumer spending a lift, as people hear the positive news, in contrast to the bad news over the last several months.

As far as going to the movies, that will probably depend on what it always depends on: if there's anything out there worth going to see.

The mood by consumers now seems to be a little sluggish. Assuming no more major problems over the holiday season, it seems it'll be a year of good, but not spectacular spending.


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