The Financial Cost of Hollywood’s Racism
The cost of not giving black films and filmmakers the funding, support, or distribution they deserve
$10 billion: That’s how much the American film and TV industry stands to gain in annual revenues, a 7% increase from the baseline, by addressing racial inequities prevalent in the industry, according to a recent study by the consultancy McKinsey, and reported in Deadline.
The McKinsey study found that Black-led film and TV projects are consistently underfunded and undervalued even though they tend to outperform other projects when it comes to returns on investment. Deadline writes that the McKinsey study aligns with a finding from an October 2020 report from UCLA showing that a lack of diversity on-screen was hurting Hollywood’s bottom line.
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The financial costs of racism are by no means limited to Hollywood, or even the broader entertainment industry. If $10 billion sounds like a large annual price tag, consider that last year, a Citigroup economist calculated that the U.S. economy had lost $16 trillion over the past 20 years in foregone economic output by failing to address racial gaps, like racial pay disparities and Black entrepreneurs’ lack of access to equitable lending.
“Make the hire, send the wire” applies to movie producers, too.