Business

Strike's effects ripple beyond studio gates

For years, Television & Cinema Wardrobe Cleaners has lived by its motto: "We do nothing but showbiz!"

That narrow focus is costing the Sun Valley company, which lost 30% of its TV work just one week into the strike by the Writers Guild of America. That figure could double by the end of this week.

"It's dreadful," said Denny Ashkenazi, whose husband, Oren, owns TVC Cleaners, which provides dry cleaning and laundering services for TV shows, feature films and commercials. "Business is so slow."

Less than two weeks after the start of Hollywood's first major strike in nearly 20 years, local businesses are feeling the strain from reduced orders and canceled contracts. The pain has spread beyond businesses tied to the production of shows and films, reaching those that serve the industry or simply operate in the neighborhood, including catering companies, hotels, florists and dog groomers.

The strike "really does have far-reaching effects," said Mark Deo, executive director of the Small Business Advisory Network, which has been counseling many entertainment-related companies during the strike. "It's not just people directly involved."

Economists say the strike could be more disruptive than the 22-week walkout by writers in 1988, which cost the entertainment industry an estimated $500 million. Hollywood is a more dominant force in the region today, with studios and networks that are part of media giants such as Time Warner Inc., Walt Disney Co. and News Corp.

Many businesses have arisen to support the entertainment industry, which accounts for almost 7% of Los Angeles County's $447-billion economy. A large-budget film of about $70 million typically creates 928 jobs: 231 tied to the production and 697 indirect jobs, according to the Los Angeles County Economic Development Corp.

With the strike cutting off production at studios across Hollywood, many of these jobs quickly became unnecessary. For small companies without large resources, the economic toll mounts rapidly.

"Somebody get me a tourniquet, please," said Lance Sorenson of 24/7 Studio Equipment Inc., which rents out forklifts, generators and other production equipment to film crews.

Since the strike began, production companies have been contacting the Burbank company to inform it that they would soon be "on an indefinite hiatus" and would no longer be needing rentals, Sorenson said. As a result, his 43-person company has no work in episodic television lined up after the end of the month.

"We have put all of our eggs in this one basket that is the entertainment industry," he said. "We're anticipating and bracing for a real slowdown."

Many companies could have softened the blow by not limiting their business to the entertainment industry, Deo said.

"If you're dependent on one industry, you could go out of business if that industry goes down," he said. "It's good to specialize, but it's also good to diversify a bit to protect yourself."

Workers at TVC Cleaners simply weren't expecting the strike after numerous false alarms through the years, Ashkenazi said.

"Since 1988, there were a couple occasions where we were stressing over whether there would be a strike or not, but it never went through so everything was OK," she said. "That's why we were surprised this time."

If the strike continues, the company may lay off some of its 20 employees and scale back its operating hours.

"Our main concern is for our employees -- these are the losers in this battle," Ashkenazi said. "They're all working people who rely solely on this job for mortgages, for tuition, for their kids, for grocery shopping -- for everything."

At Star Waggons, which rents trailers used on TV and film sets, the strike brings back memories of the 1988 walkout, when the Sylmar-based company let 70 employees go.

"We're getting less calls and equipment's coming back in the gates," said Jason Waggoner, who along with his brother, Beau, runs the business founded by his father, the now-retired TV actor Lyle Waggoner. "The bottom line is, this isn't good for anybody."

Harold Ginsburg of Art's Delicatessen in Studio City said he had seen a precipitous drop in lunch orders in the last two weeks. The deli, a Hollywood favorite famous for its pastrami sandwiches, used to count on two to three orders a day from production companies and studios -- accounting for about 10% to 15% of its monthly business.

These days, Ginsburg's only steady customers are moms bringing their kids in after school for some corned beef or retirees hankering for some matzo ball soup or chopped liver.

"Definitely for lunch, we have had no studio business at all," he said. "Luckily, our older crowd doesn't work any more."

It's still too early to gauge the effect of the strike on the economy, but experts say the longer the strike, the harder it will be for companies to recover.

"If this strike continues," Deo said, "things will get far worse for small businesses."

For now, TVC Cleaners is scrambling to rethink its business model, which could include a shift from its entertainment-clients-only mentality to serve non-Hollywood clientele.

It's a tactic that has worked for Some Like It Hot. The North Hollywood catering company lost a lucrative five-month contract with ABC's "Ugly Betty" after the strike was announced.

"It was a big disappointment," owner Marcy Blaustein said. "Over the course of that many months, it's quite a sizable amount of money. It's thousands of dollars."

But the lost job won't cause a huge drop in revenue for the company, which caters commercial and music video shoots, corporate events and private parties in addition to its TV and film work.

"The thing that will save us," Blaustein said, "is that we are diverse."

andrea.chang@latimes.com

Times staff writer Lorenza Muñoz contributed to this report.

Copyright © 2015, Los Angeles Times
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