Will Trump's Policies Make Hollywood Richer or Poorer?
More than half of business managers polled say the new administration has changed how their clients are approaching investments as politics and taxes cloud the bull market.
President Donald Trump has yet to announce a definitive tax reform plan, and world leaders fear the threat of a nuclear attack is the greatest it has been since the Cold War. So THR asked each of its Power Business Managers to answer, honestly and anonymously, whether the change in administration is affecting how their entertainment industry clients are managing their money.
More than half said yes, while others say the stars and behind-the-scenes players they rep have adopted an attitude of "this too shall pass." Notes one manager, "I don't think anybody has really changed their portfolios because of it, but I think people are being much more aware and skeptical of how quickly and badly things can change."
Some worry about missing the upside of the bull market, while others wonder how long it will be until it crashes. And at a time when international diplomacy includes the president firing off 140-character threats to destroy North Korea, some say their clients are "uncomfortable" investing in their portfolio when "there are so many political problems in the world that could turn the market upside down." Instead, they're happier holding on to cash. "Most drops are temporary," says another manager, adding that the market righted itself within years of the massive 2000 dot-com bust. "But can the clients hold on for those returns? Are they OK with a 30 to 40 percent drop in a particular year? If they're not going to sleep at night, we need to be more conservative."
It's no secret that many in Hollywood weren't happy with Trump's election — but his goal of lowering the top tax bracket to 35 percent seems to be a silver lining, even though it remains uncertain whether a tax overhaul will be passed. "There are too many unknowns," says another manager. "Are they going to pass tax relief? What will it look like? We're not sure how to advise them with the current set of circumstances."
This story first appeared in the Sept. 27 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.