Report: Entertainment biz slumping

Fall SAG elections singled out as crucial to industry

A midyear economic report on regional effects of the recession says the entertainment industry has been slumping despite solid boxoffice this year and suggests that SAG's fall elections could prove pivotal to Hollywood's well-being.

The Los Angeles Economic Development Corp.'s report also repeated its warning that the trend of runaway film and TV production can only be reversed by California's passing more generous tax incentives for state-based projects.

"Runaway production is not an ephemeral thing and represents lost jobs and tax revenues to the Los Angeles economy," the LAEDC said. "While the state of California has finally started to offer incentives, they are felt by many in the industry to be too narrow and not focused on feature film production."

The nonprofit economic organization projects a 0.8% uptick in film and TV employment in Los Angeles County during the next 12 months to 157,500 jobs. Film production is expected to contribute a 1.6% jobs growth, TV and radio employment is forecast for an 8.4% tumble and miscellaneous work for free-lance writers and performers a 7.7% rise.

As for its labor-related comments, the LAEDC said, "There could be a near-term bump in local feature film production activity due to the recent SAG settlement."

But it added: "Keep an eye on the SAG board elections in September. The balance of power between the moderates and the hardliners will be important, as late in 2010 a TV contract will have to be negotiated."

Said veteran LAEDC economist Jack Kyser: "We're watching to see if the moderates can retain control of the SAG board. They're more real-world and understand the dynamics of the industry a little bit better."

On other industry trends, the group pegged theatrical boxoffice as strong while noting "the evident peaking of DVD sales."

The LAEDC marked down the entertainment segment's midyear letter grade to B-minus. The group had rated Hollywood's economic health at B-plus at the start of the year.

"B-minus is better than most of the business out there, which got a heck of a lot of Cs and C-minuses," Kyser said.