Show Me the Money

Even in a recession, Oscar is pumping money into the economy

It's an unseasonably warm morning about three weeks before the Academy Awards, and outside Hollywood's Chinese Theatre a lanky man in his mid-30s is strutting around on platform heels, wearing a batcape and mask.

This is Marty Portman. Four years ago, he gave up his day job as an auto mechanic and moved to Los Angeles, where he now earns his living posing as Batman, while not spending time in the nearby hotel where he lives or schmoozing with the Incredible Hulk.

Batman has been good to Portman, a mild-mannered guy from the south side of Chicago whose reedy voice doesn't quite have the throaty rasp of Christian Bale's.

"A really good day can average $30-$40 an hour," he says. "Some days I can make $50 an hour -- you never know, I could even make $100. Warner Bros. owns the character, so they can come up to me at events and say they don't want me around, but they can't do anything when I'm out here on the boulevard, because I own this costume."

Portman is optimistic that costume will give him a financial boost come the Academy Awards.

"I hope to be here Oscar night -- if they allow me," he says.

Portman is part of a whole economy that, at least to some degree, will benefit from the Oscars.

From the networks that sell commercials at $1.4 million per 30 seconds, to the hotels that book suites at hundreds and thousands of dollars per night, to guys like Portman -- not to mention the directors and stars whose salaries will polevault if they win a statuette -- Oscar is big business as far as Los Angeles is concerned.

According to the Los Angeles County Economic Development Corp., the Academy Awards pour at least $130 million into the local economy each year. And that might be a conservative number.

"There are a lot of things that you can't count, like how many limo drivers are out there," notes Jack Kyser, chief economist for the LAEDC. "During the awards, they actually bring in limos from outside the area.

"People will watch their spending, no matter who they are," he continues. "But toward the end, people get caught up in the spirit of the thing."

Individual studios have retrenched on some of the more lavish parties they have thrown in the past and have cut back on the massive ad spends they have indulged in to promote their movies. And the cost of the ads for the Oscar telecast itself are down from $1.7 million a year ago. Still, other players are keeping the Oscar economy alive and well.

The biggest spender is the Academy of Motion Pictures Arts and Sciences. Last year, it incurred $31,104,800 in Oscar-related expenses, according to the Academy. That included the costs of the ceremony, screenings, the nominees' luncheon -- and money spent to make 47 gold statuettes at $500 apiece, though not Oscar host Hugh Jackman, who works for scale.

This year, the Academy likely will spend a similar amount and maybe even more, given the realities of inflation.

But the real fuel driving all this is the license fee jointly paid by ABC, which holds the domestic rights through 2014, and Buena Vista, which takes international. Added to other revenue from ticket sales and the like, the Oscars bring in $73.7 million per year. By contrast, annual dues from the 6,000-plus Academy members generated a mere $1,489,300.

No matter how great a recession we are experiencing, that license fee remains the same and will do until the pact runs out. Current ad buys will impact the fee when the deal is renegotiated, but for now it remains the same -- and because of that, Oscar spending is still going strong.

The money the Academy receives does not just go to the telecast, but also to fund a whole host of worthwhile programs run by the Academy, from film restoration to grants to film schools to maintaining the Academy's Margaret Herrick Library.

And that is just part of the Academy Awards economy. Restaurants will be flush again; hotels full; and fashion houses rearing into action.

Fashion alone benefits from free publicity worth millions. The House of Valentino estimated that its media exposure on the red carpet in 2001 was worth $25 million, a Valentino spokesperson says.

"Just think about the TV time," says Marilyn Heston, president of MHA Media, a luxury brand PR company.

This is apart from the money made by companies that almost instantly make copies of Oscar-night fashion and sell them for a fraction of the designer-label cost.

And the fashion aspect of the Oscars means money that filters back into the L.A. economy -- like cash spent hiring tailors who make last-minute adjustments.

One tailor, Paul Fox, says he and his six-person team have had to completely dissemble and refit an outfit on the spot, as they did the three-piece suit Mickey Rourke wore to the premiere of "The Wrestler." The price for his services "starts at $100 and goes up," he says.

Hotels also benefit from the thousands of guests, executives and their entourages that come in for the awards -- not to mention for the many events leading up to the Oscars. Over at the Four Seasons Hotel in Beverly Hills, the $5,500-a-night presidential suite was booked well in advance, according to Sarah Cairns, the hotel's director of public relations.

And guests aren't just paying for the hotel rooms. If a guest feels a last-minute need for longer locks, the hotel could summon hair and makeup stylist Raphael, who charges $3,000-$5,000 for hair extensions.

"I use 100% real, quality hair only," insists Raphael, whose clients include Viacom chairman Sumner Redstone and the Saudi royal family.

Some of the people using that hair will attend any number of parties that take place in the top hotels and in other chic venues, which can cost anything from a few thousand dollars to the $2 million or so that is lavished on the major events, like Vanity Fair's, though many are sponsored by corporate patrons. Even though companies like Vanity Fair are considerably scaling back, they are still pumping real money into the local economy at a time when it is badly needed.

A party feting a film's director and cast in the 5,000-square-foot Royal Suite atop the Beverly Wilshire Hotel will cost $2,500 plus $125 per guest -- the rough cost of a party that Miramax recently hosted there for its awards contenders, including "Happy-Go-Lucky" and "Doubt."

The big parties -- in contrast to cocktail events like these -- often are fundraisers that, in turn, generate money that benefits the groups they support. The annual Elton John AIDS Foundation has raised $20 million since 1993; and "The Night Before" has raised $25 million for the Motion Picture & Television Fund since 2003.

While many of these have seen their corporate sponsors provide less money, and others have had trouble raising quite as much as they did in the past (a factor that led the MPTF to close some of its facilities recently), they're still helping.

Nonprofits benefit in other ways from the Oscars. In 2007, the Clothes Off Our Backs Foundation, founded by actors Jane Kaczmarek and Bradley Whitford, auctioned off several pieces worn at the 79th Annual Oscars, including Jodie Foster's gray Vera Wang dress, which fetched $2,000.

Then there's the money spent on the campaigns themselves, which can top $10 million for an all-out endeavor.

Where does the money go? Studios, even during this recession, can spend millions apiece on advertising in the trades, the New York Times and Los Angeles Times. A full-page black-and-white movie ad in the L.A. Times' Sunday Calendar section is $47,214, according to the paper's 2009 ad rate chart. Add color, it's another $9,135.

Want to show your film to the press and awards voters? At the Wilshire Screening Room, the going evening rate is $300-$500 per hour, depending on the day of the week.

Even the valet parkers benefit.

A Beverly Hills party with 400-500 guests might require 25 attendants and cost $6,000-$7,000, according to Joel Groves, vp of Chuck's Parking. Up in the hills, with parking harder to find, it might need an additional 20 attendants and cost $12,000-$13,000.

For the film that wins the Oscar, it's all worth it.

Media By Numbers estimates that last year's best picture winner "No Country for Old Men" earned more than a third of its $74 million domestic theatrical take after receiving its six Oscar nominations. Add to that ancillary revenue and the added value brought to a studio's library the real additional take can top $100 million, insiders say, regardless of the actual post-nominations boxoffice.

For an actor like Sean Penn, winning the Oscar will not just mean that he can beef up his salary by several million dollars; it will also mean that he can effectively give the greenlight to any indie film he chooses to star in. For lesser known performers like Taraji P. Henson and Viola Davis, the Oscar will mean beefing their salaries from the low-six-figures to as much as $1 million or more, according to insiders.

With all this spillover, curiously, one of the few entities not to benefit directly is the city of Los Angeles.

Closing Hollywood Boulevard for the Kodak Theatre event actually costs it money -- an estimated $410,000, according to the city.

"We start at 2 a.m. (on awards day), setting up the K-rails (concrete barriers) and implementing the security zone for LAPD and work all the way to the wee hours of Monday morning," says Aram Sahakian, who heads the Special Traffic Operations Division for the L.A. Department of Transportation.

If the city does not reap direct revenues, its employees do. Costs include everything from time-and-a-half overtime wages of the LADOT traffic officers and engineers working the event to the rental of those K-rails from Toyota Grand Prix of Long Beach.

The city -- which faces a $433 million budget shortfall -- has the option of billing the Academy for these costs, but every year the City Council waives the fees. After all, the Oscars bring in other revenue that L.A. might lose if they moved to another city. Just like a film shoot, each dollar spent leads indirectly to tax revenues that are a multiple of that, sometimes five or six times the official dollar amount. Los Angeles' half-million-dollar giveaway will ultimately bring it many millions in tax revenues.

Then again, there is that intangible worth that no one can properly evaluate.

"(The Oscars) send out an annual message around the world that Los Angeles is the capital of glamour, entertainment and creativity," Kyser adds. "You can't put a dollar value on it."

Outside the Kodak, Portman can't put a dollar value on the Oscar, either. He might be making more if "The Dark Knight" had been nominated for best picture; then again, he'd be making a lot less if he continued playing his former character, Pinhead from "Hellboy." For now, he's happy to continue as Batman.

"The Batman character is more popular since 'The Dark Knight' came out," he reflects. "It was an excellent movie; I give it two thumbs up. It's one of the best Batman movies I've seen in awhile. I hope they win some Oscars."

Chris Edling contributed to this report.
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