Hollywood Adds Billions to State Economy, New Studies Report : Entertainment: The industry-commissioned reports also say it created more jobs than had previously been estimated and confirm signs that more production is going elsewhere.

Hollywood movie and television production pumped $16 billion into the state’s economy in 1992 and created more jobs than previously estimated, at least according to two new studies paid for by the entertainment industry.

Although the seven major studios still serve as the hub of industry activity, the studies found that the vast majority of feature films and TV programs are developed and produced by independent production companies, many employing fewer than 10 people, although many of these smaller firms work on a contract basis for the studios.

Overall, according to the narrower of the two studies--which was conducted by Monitor Co., a Santa Monica management consulting firm--the movie and TV industries directly employed 164,000 in California, of whom 95,000 were free-lancers, constituting a “mobile army” of skilled technicians, artists and craftspeople who go from project to project.

Yet while California remains the leading supplier of entertainment to the world, the studies confirm signs that production is fleeing, an exodus the studies attribute to rising costs and difficulties in filming on location in Southern California. For instance, 95% of TV sitcoms--which require little location shooting--are filmed in California but only 40% of TV movies are shot in the state.

The economic impact studies, which are scheduled to be released today, were commissioned by the Public Affairs Coalition of the Alliance of Motion Picture & Television Producers, which is composed of the major studios, two TV networks and many smaller companies. Not surprisingly, the studies tend to support the industry’s assertion that it is a crucial contributor to the local economy and that it is composed mostly of small firms rather than rich and monolithic studios. Also implicit in them is the industry’s criticism of the high costs and red tape associated with doing business in Southern California.

The studies were able to tap internal employment and spending information from studios such as Universal, Warner Bros., Walt Disney, Paramount, Sony and 20th Century Fox, and from ABC and CBS. In addition, several large payroll companies were used for source material, as were various crafts guilds.

The Monitor study examined data for 1992 (the latest available) and found:

* The motion picture, television and commercial production industry is one of the largest private-sector employers in the state, accounting for $16.3 billion in payroll and expenditures to suppliers.

* Los Angeles County, where much of “Hollywood” is, saw total industry expenditures of $15 billion. The figure for the city of Los Angeles was $8.2 billion.

* The production of movies, TV and commercials directly employs more than 164,000 people in California--40,000 to 60,000 more than previous estimates have said--and indirectly employs another 184,000.

* This labor force includes 95,000 free-lance workers, who range from actors, directors and writers to painters, lighting technicians and sound boom operators. They are employed on a project-by-project basis.

* The average annual pay for all entertainment production industry employees, both full-time and free-lance, was $45,000; the average for all Californians is $29,000.

* More than 1,000 California companies are involved in film and TV production in some way, but about 85% of these employ fewer than 10 people.

* The production industry generated total annual payroll of $7.4 billion and expenditures to suppliers of $8.9 billion, creating a major ripple effect in other sectors such as wardrobe companies, camera equipment firms, caterers, lumberyards, apparel retailers and florists.

* The major studios have earmarked more than $1 billion for future construction projects in the Los Angeles area alone.

These projects include a plan by 20th Century Fox to add studio and office space to its Pico Boulevard lot; Warner Bros.’ $100-million expansion of its Burbank lot and plans for a $200-million expansion of its West Hollywood lot; Walt Disney’s plans for a $600-million expansion of its Burbank lot; Sony Pictures Entertainment’s plans for a $100-million expansion in Culver City; Paramount Pictures plans to build additional facilities in Hollywood, and MCA’s spending $140 million for construction in Universal City.

The second study, by economist David Friedman, drew on broader sources to estimate that, with its economic multiplier effect, entertainment industry employment in California totaled 534,000 jobs.