HomeGlobes, Oscars: The cost of cancellation
Jan 9, 2008, 05:24 PM | by Vanessa Juarez
Categories: Strike
Hollywood Insider spoke this morning with the Los Angeles County Economic Development Corporation's chief economist Jack Kyser, who explained how the ongoing writers' strike, the resulting cancellation of the Golden Globes, and the prospect of a year without the Academy Awards impacts those who count on Hollywood for a paycheck.
HOLLYWOOD INSIDER: What kind of an impact is the cancellation of the Golden Globes going to have on the local economy, and what will happen if the Academy Awards are canceled?
JACK KYSER: What we’re looking at is an economic impact from the Golden Globes of about $70 to $80 million each time the event is held, and with the cancellation, there’s probably a lot of people looking at refund policies, because the production costs were already spent with a lot of people planning on parties.
And the parties account for a big piece of the pie?
Oh yeah. It’s a huge impact. We count at least five parties that have been canceled, and that comes to about $2.5 million. And the pain is being spread to a lot of unexpected sectors of the economy. For example, the banquet staff at the hotel: They won’t be working that night, won’t be earning money in tips. The people that would be working the parties, the same situation. So you’ve got that impact.
Do you know which parties have been canceled?
NBC-Universal, HBO, Warner Bros-In-Style, The Weinstein Company, and Fox-Searchlight.
Even for the smaller parties that are going on, I would imagine stars aren’t going to be really excited about them without the big star-studded event.
Oh yeah. This is not going to be something that people want to watch. As somebody said, watching a press conference is almost like watching paint dry.
What about the Academy Awards?
We’ve done more research on that, and that’s around $130 million, and
it has unexpected impacts. For example, there’s a firm in Los Angeles
called ABS by Alan Schwartz,
and what he does is knock-offs of the most popular gowns on the red
carpet, and so if there’s no red carpet, there’s not business for Alan
Schwartz. So it’s just spreading.
What's the cumulative effect of the writers' strike so far?
Right
now the impact of the lost wages [of WGA members and below-the-line
workers], when you apply that ripple factor, it’s about $1.4 billion.
Do you know what these cancellation policies are like? There must be a deposit that’s lost in the process.
Yes, there is a deposit that is lost in the process. Literally,
when you’re blocking out a room for a party, there’s always the setup,
so you’re taking it out of circulation for at least three days so there
would be a significant cancellation policy. There’s pain for a lot of
people out there.
This is the first strike that’s really affected the awards shows,
with the exception of a strike in 1980 that affected the Emmy’s. Do you
think this is going to give the public more strike fatigue, and do you
think the tide is going to be turning on the WGA because of all of
these lost jobs?
Yeah, I think the problem for the production
workers is that they have to work a certain number of hours per year to
qualify for health and retirement benefits. There’s pain there, and I
think you are going to start to see the WGA probably lose some
sympathy. What they’re doing with this policy of not allowing what you
call the industry award shows — the Golden Globes and the Academy
Awards — is taking away a promotion venue for the studios. A lot of
people are expecting prestige films to garner most of the nominations,
and generally those [movies] don’t bring in a lot of the box office.
They’re trying to hit the studios in their pocketbooks.
Do any of your numbers or predictions account for advertising that would be lost in airing these shows?
NBC estimates that they’re going to lose about $14 to $15 million in ad revenues.
It doesn’t seem like people really thought this would go into the New Year.
And that negotiations would be so bitter. By the time SAG [contract
negotiations] come up, I think the hash will be settled because I think
the DGA will start to negotiate [before then] and we’ll figure out if a
pattern is being set. If a pattern does seem to be set [by DGA talks],
then both SAG and WGA will sort of be forced to go along with it.
Has this provoked any movement from Gov. Schwarzenegger?
No, the governor has his hands full up in Sacramento. He did this State
of the State and [he’s] looking at a $14 billion-plus state budget
deficit, so he has other things to look at. Some people have asked
about [Los Angeles] Mayor Villaraigosa, and here again, not much
movement.
Do you think this is going to have any affect on the presidential candidates?
No. If they come to Los Angeles they may talk about it, but remember,
this industry is very Los Angeles-centric, so if you’re trying to carry
California, you wouldn’t focus on this.
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