Oscar won't salvage tough party season



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At 5:30 a.m. on a typical February morning, the crates of roses and gladioli lining this vast warehouse at the heart of downtown Los Angeles' flower district would be nearly empty. But on a morning not long ago, thousands of stems awaited the pre-Valentine's Day romantics on the premises.

"Business is down," says Russell Ogawa, a manager with Mayesh Wholesale Florist, citing this year's low-key Hollywood awards season as a reason sales are running about 18% below a typical winter. Ogawa is optimistic about Oscar week, he says, "but we probably won't make up for what we lost."

And it's not just the flower peddlers who are hurting. All across town, individuals and small companies connected to the monthslong run-up to Sunday's Academy Awards are feeling the crunch from the WGA strike-ravaged galas, the studio belt-tightening and the tempered enthusiasm.

 "It's a very weird season," says Phillip Bloch, a top hairstylist for clients like Halle Berry. Bloch has had several regulars cancel their bookings. "It's like the year we went to war with Iraq. It's deja vu all over again."

The economic effects of the strike on what might be called the Awards Industrial Complex are more serious than fans of glitz might think. From the diminished Golden Globes and People's Choice Awards to the abandoned Oscar parties traditionally thrown by Vanity Fair and agent Ed Limato to the toned-down gifting suites, the scaled-back awards season might have cost the town as much as $100 million. The Los Angeles County Economic Development Corp. estimates that the walkout's total cost to the L.A. economy will hit $2.5 billion.

The biggest hit came from the Hollywood Foreign Press Assn.'s decision to dramatically scale back the Golden Globes.

"We calculated that had an overall economic impact of about $60 million -- and that does not include the advertising revenue lost by NBC," says Jack Kyser, chief economist for the LAEDC. "It rippled out pretty badly. The Beverly Hilton lost money; the banquet staff lost money; the flower shops, gift-basket shops, hotels -- they've all felt the impact."

Dozens of other canceled parties have had a similarly cascading effect. For every dollar a limousine company earns, it spends money to maintain vehicles, stock minibars, pay employees, etc.

"I usually do two or three parties per awards show," event producer Chris Benarroch says. "I didn't do any this year."

Those parties come at a hefty price.

"They range in cost from $200,000-$500,000," Benarroch says -- though insiders estimate the top soirees, like Vanity Fair's, can cost anywhere from $1 million-$2 million. "If you are doing a buyout at a place like the Chateau Marmont, that averages around $200 per person. Florals are anywhere between $5,000 and $30,000. For security, you are looking at about $5,000-$10,000. And for decor, anywhere from $20,000-$200,000."

Even though the Academy Awards will take place as usual Sunday, Kyser estimates the scaled-back party scene will lead to "well over $4 million" in lost expenditures.

On the front lines of losses are those directly involved with the parties and awards shows, like the hairdressers and stylists whose fees often start at $3,000 a day. Some top stylists can spend weeks finding the right dresses for key events and can earn $5,000-$15,000 per celebrity during awards season. "It is a big payday for everyone," says Marilyn Heston, president of MHA Media, a luxury brand PR company.

The high-end service economy is dealing with smaller returns this year.

"My tailor might make $1,000 per client and work on 10 or 15 people, so she is losing $10,000-$15,000," Bloch says.

Even with the events that are taking place, less money is being spent on them, partly because the studios -- which usually foot the bill for awards-related limos and hotel expenses -- became penny pinchers during the strike.

"During the SAG Awards, I heard from a number of actresses that the shows weren't picking up the tab for the limousines and cars and drivers for the nominees," Heston says. "I heard the cast of 'Ugly Betty' rented a bus to go together." (ABC couldn't confirm that report.)

Companies whose business is dependent on the publicity they receive during awards season also are taking a hit. Etienne Taenaka, regional director of the West Coast Vidal Sassoon Salon, who last year cut "Babel" actress Rinko Kikuchi's hair for the Oscars, says he is concerned less about the 10-12 Globes-related cancellations he received as he is about the reduced exposure via awards telecasts and preshows.

"It is really about the branding opportunities," he says.

That branding is worth its weight in gold -- literally -- for jewelers like H.Stern, which for 11 years has set up a styling showroom during awards season to outfit stars for the red carpets. The cancellations have hit hard.

"That's $1 million-$2 million in press mentions that we didn't get," says Andrea Hansen, H.Stern's international communications director.

Kwiat Diamonds, a New York-based family firm, generated a flood of interest when Natalie Portman wore its earrings at last year's Vanity Fair party.

"Awards season is a very important stage for fashion and jewelry, and the cancellation of events was a missed opportunity for us to showcase some of our best newer designs," Greg Kwiat says.

Like many awards-season "gifters," Kwiat regularly rents a suite at the Four Seasons in Beverly Hills for a week before the Oscars, flying out six or seven staffers for the occasion. That still will take place -- but the Four Seasons has been among the hotels most affected this year.

Attendance started to drop with the People's Choice Awards, notes Carol Watkins, the hotel's director of entertainment sales. "Awards show to awards show, things are disappearing on us. For the Golden Globes, we were completely sold out; then they canceled, and it was very empty."

Watkins says 80% of the Four Seasons' rooms were booked by guests attending the Globes, each with a three-night minimum. Their cancellations had a domino effect. "It impacts every person in this hotel, from the valet parkers to the housekeepers to the restaurant," she adds. "A hotel is a 24-hour operation, and everything was scaled down."

The WGA West's scrapped awards dinner would have cost $300,000, guild president Patric Verrone says. The guild plans to hold a gala event this year, so some of that money eventually will circulate through the economy. Until then, the service professionals who work at downtown Los Angeles' Bonaventure Hotel, where the event was scheduled to take place, will earn less in tips and overtime.

This year also has been tough for charities that depended on Hollywood for covering their most basic needs. An organization like Jane Kaczmarek and Bradley Whitford's Clothes Off Our Back, which auctions dresses worn by celebrities to benefit those in need, now simply has fewer items to sell.

And Ken Scherer, CEO of the Motion Picture & Television Fund Foundation, which hosts the annual Night Before party, says the low-key awards season will limit his fundraising.

"We raised $7 million last year, but we would be happy to get $6 million this year," he says.

The HFPA also will likely cut back on its philanthropic grants, which last year totaled $1.25 million.

"We have not completed looking into all the monies that we should have gotten and all the monies spent," HFPA president Jorge Camara says. "But we did not receive a license fee (from NBC), and what really concerns us is the donations we give, because we don't want to hurt the schools and the scholarships that we give every year."

Last year, he says, Martin Scorsese's organization, the Film Foundation, received the biggest amount -- $300,000. It will have to make do with far less this year.

The Writers Guild Foundation, which canceled an annual writers panel, "Beyond Words," will have to do without the $7,000 or so that it would have raised. Angela Wales Kirgo, executive director of the foundation, adds it is "down by $20,000-$30,000. Now we have to scramble to catch up."

On the less altruistic front, fewer awards events also have posed challenges for the paparazzi who count on awards season to bring A-list celebrities to Los Angeles for weeks at a time.

"My accountant works for one paparazzi photographer, and he said he's going to lose up to $100,000," hairdresser Bloch says.

The paparazzi can breathe a sigh of relief that the Academy Awards was not canceled, too. The Academy last year spent about $54 million on its Oscar telecast. According to Kyser, coupled with related expenses like studio awards campaigns, the Oscars alone bring $130 million into the economy.

And this year, the Academy will spend even more than last year.

"We were planning for two possible sets of eventualities," executive director Bruce Davis says. "We had to produce a great many more historical clip packages, just in case -- and those are not inexpensive."

Davis declines to put an exact figure on the extra expenditure but says, "It will be hundreds of thousands of dollars."

Had the show been canceled, the Academy would have lost most of the $70 million-plus it receives from ABC.

"About 80% of our annual revenues are earned from that license fee," Davis says. Plans for a new motion picture museum to be built close to Sunset and Vine -- which is expected to open in 2010 -- would have been scaled back, along with the Academy's preservation efforts, he says.

But with the Oscars back on track, the Academy -- and the industry -- can celebrate on Sunday. It's almost business as usual.