Strike takes $2 billion toll


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The writers strike that began Nov. 5 wrung $2 billion from the local economy, as much as four times more than the 1988 strike that lasted six weeks longer.

Most of the pain, experts say, was felt by independent contractors, small-business owners and others that have courted TV production crews as favored customers.

The Los Angeles Economic Development Corp. estimates that while $733 million in production spending has been lost, another $1.3 billion came from the pockets of the caterers, florists, valets, hotel operators, restaurant workers, costume-house employees and others.

And when production staff gets back to work, they might find themselves dealing with vendors who have stripped their own staffs to a minimum and others that aren't yet back in business.

"No one is saying, 'I'm outta here for good,' but when they do come back, they'll be operating differently," said Mark Deo, executive director of the Small Business Advisory Network.

Deo said businesses learned the hard way that they need a diverse set of customers if they wish to thrive and that depending on the health of a few TV productions just won't cut it.

One husband and wife catering team, for example, shut their business down during the strike and returned to previous careers. They intend on reopening their catering business and broadening their customer base, but decisions haven't been made on how many employees will get rehired.

"You could talk to a hundred other people with a similar story," Deo said.

LAEDC chief economist Jack Kyser said that initially, the strike had little impact on the economy, with state employment data suggesting few, if any, entertainment industry employees were going without a paycheck in November and December. That differs dramatically from the 1988 strike, when 6,000 workers were jobless the first month, not including the striking writers.

Economists figure the 1988 walkout cost Los Angeles $500 million, though Kyser cautions that data back then is sketchy because it lacks detail, especially where collateral damage is concerned.

That the strike was costlier this time around was to be expected, given that there were only three broadcast networks and no cable productions to speak of 20 years ago.

For the past 14 weeks, dramatic television took the biggest hit, according to Todd Lindgren, a vp at FilmL.A.

Forty-six primetime dramas for broadcast and cable TV were shooting, or set to shoot, in Los Angeles during the strike, but the number trailed off through December, then fell off a cliff in the new year. The last casualty was ABC's "October Road."

Since each episode of each of the 46 shows costs an average $3 million, the absence of dramatic, one-hour TV shows has been sucking $138 million per week in direct production costs from the Los Angeles economy this year.

Plus, according to FilmL.A., each show employed 200 workers, causing up to 10,000 people to be jobless.

There also were 17 half-hour primetime comedies set to shoot during the strike, at a cost of $1.5 million per episode. FilmL.A. figures that shuttering them put 1,500 people out of work and has cost the city's economy $25.5 million per week this year.

When combining a fairly normal November and December with a horrible January and February, permits to shoot dramas in Los Angeles fell 65% during the 14 weeks, from 263 to 91, compared with the same period last year, when there was no strike. Sitcom permits fell 69%, from 59 to 18.

Meanwhile, permits for shooting reality TV shows has increased 8% from 153 to 165, so reality's positive impact has been a mere blip, FilmL.A. said.

Feature films were also up a bit, from 211 to 238, as some studios rushed productions forward in anticipation of work stoppages not only from striking WGA members but also from directors and actors who might also have walked.

But a few more films and reality TV shows didn't come close to making up for the absence of comedy and drama TV which, when added together, has been draining $160 million in direct production spending out of the Los Angeles economy per week since the start of the new year.

"That's a pretty bomb-proof number. Employees are not getting paid," Lindgren said. "But it does not take into account the trickle down effect."

One particularly hard-hit industry in that "trickle down" category is limousines. Experts estimate there are about 1,200 limo companies and 6,000 drivers in Los Angeles.

Alan Shanedling, president of the Greater California Livery Assn., confirms that November and December weren't a problem, but the new year "has been devastating."

Shanedling's own company, Fleetwood Limousine, lost $200,000 in revenue in January alone, and his 34 drivers missed out on $30,000 in tips, money they couldn't spend elsewhere and the cause of more trickle-down pain.

Because of the stripped-down Golden Globes ceremony, for example, several limo companies that were to supply 800 cars saw that business disappear along with 6,400 hours of work for drivers.

The cancellation of the weekslong Television Critics' Assn. press tour might have been an even bigger blow to the limo industry. Shanedling said a single client canceled 180 cars in one day. "Imagine 21 days of that," he said.

And some predict the January TCA press tour might never return.

"I don't know a lot about the details of the strike," Shanedling said. "But I blame both sides. Nobody wins during a strike. History keeps proving that."