What's worse for Los Angeles: "The Tonight Show" leaving for New York City or the city's largest publicly traded company, Occidental Petroleum, leaving for Houston?
Both the late-night talk show and the Fortune 500 company were signature L.A. entities. Yes, "The Tonight Show" was produced in Burbank, but the studio and the product were part of greater Los Angeles. Occidental's Westwood headquarters on Wilshire Boulevard is adjacent to the Hammer Museum, a legacy of the company's former chairman, Armand Hammer.
"The Tonight Show" move resulted in 150 layoffs, although a spokesperson said the workers were encouraged to apply for other local NBC jobs. There probably will be a trickle-down effect for restaurants, gas stations and other businesses near the studio that profited from tourists attending the live taping of the program.
It's unclear how many local jobs will move with Occidental to Houston. Oxy has about 40,000 employees worldwide. The company will relocate the management of most of its oil and gas exploration and production operations to Texas. But it will spin off its California business into a new company with about 8,000 employees. There's no word yet on whether the new entity will keep its headquarters in L.A. or move to another California city.
Then there is the prestige factor. "The Tonight Show" move was seen as another sign that L.A. was losing its status as the entertainment capital, as more film and television productions are lured by financial incentives to other cities and states. (Incidentally, New York revised its incentive program last year to provide tax credits for talk programs that relocate to the state; NBC will reportedly get a $20-million tax break for moving "The Tonight Show" to 30 Rockefeller Center.)
When Johnny Carson took the show to Burbank 40 years ago, he put Hollywood on the national stage five nights a week. Now, the show's move cements the East Coast as the center of the media (New York) and political (D.C.) worlds. As columnist Joe Mathews wrote last week, the move "robs California of its biggest stage for statewide communication, a rare place where a Californian (Leno) could ask questions of presidents, governors, mayors and moguls — and all Californians could hear the answers."
Occidental is the largest publicly traded company within the city limits, and it's one of the few remaining major companies based in the city of L.A. The lack of corporate headquarters was one of the knocks against the city in the Los Angeles 2020 Commission's first report in December, which noted that there were 12 Fortune 500 companies based in L.A. three decades ago, compared to four today. With the departure of Occidental, there will be three.
Los Angeles, the report said, can't attract major companies and large employers and that means fewer good-paying jobs. When Occidental's high-paying jobs head to Houston, its corporate and individual philanthropic giving will probably go to Texas as well. Companies and their employees tend to support charities in their communities. Fewer CEOs and headquarters in Los Angeles mean less charitable giving.
While "The Tonight Show" loss may have been the more powerful hit to L.A.'s collective ego, the departure of Occidental Petroleum will probably be the bigger loss for the city, and it presents the more challenging problem for the region's leaders. While politicians in Sacramento and Los Angeles have proposed legislation to slow runaway film and television production, they don't seem to have a similar game plan to attract and retain major corporations that bring money and jobs to the region.