Company Town : ANALYSIS : Hyperbole on Studies Shows Hollywood Still Likes a Myth

Hollywood released two studies Monday showing that it is a bigger contributor to the state’s economy than anyone realized--generating 534,000 jobs directly and indirectly and spending $16.3 billion on payroll, goods and services in 1992.

Included in the findings are the kind of ominous warnings heard so much lately: Don’t chase us out of your neighborhood when we want to shoot there, and make it easier for us to get permits needed for our car chases, or more production will pick up and move to Texas, Arizona, Vancouver or Florida.

But there’s one problem with that tactic. Far from losing the battle with other states and countries, statistics show California is routing its competition, with more production work--and a far bigger number of projects than ever before. So what’s going on?

The goal of the studies, jointly released by the Public Affairs Coalition of the Alliance of Motion Picture & Television Producers, appears to be twofold: to convince the average Southern Californian that Hollywood is an increasingly important economic contributor, and by doing so to provide ammunition for the inevitable lobbying push for concessions to aid the industry.

There was no shortage of hyperbole in the public statements accompanying the study’s release. Mayor Richard Riordan called it his most important news conference. And in a real stretch, he linked everything from home prices in Los Angeles to the very salaries and jobs of the reporters covering the news conference to Hollywood’s well-being.

Also speaking were such luminaries as MCA President Sidney J. Sheinberg, Paramount Television Group Chairman Kerry McCluggage and Motion Picture Assn. of America President Jack Valenti. All echoed the singular theme that Hollywood is a $16.3-billion-a-year economic gorilla that needs to be nurtured instead of tripped up by regulations.

One who did not speak, however, was the author of one of the studies, economist David Friedman, who has an entirely different take on the threat to California’s production industry.

Friedman’s statistics are in sharp contrast to the largely anecdotal evidence that California is losing much of its production. His figures show that the percentage of film starts in California has not declined at all and has actually grown from 51% in 1986 to 68% now. That’s hardly the sign of an industry packing to leave.

Friedman disputes the notion that more jobs and paychecks are being lost. In most cases, he says, workers who go on location do so temporarily, continuing to cash their paychecks and spend their money at home in Southern California. As for jobs moving out of state, the actual number of out-of-state film industry jobs remains a small fraction of California’s 164,000.

In New York, film industry jobs total 20,000. The number is 7,600 in Illinois and 4,600 in Texas. As for the much-hyped production center of Florida, the number of film industry jobs is 3,200, a figure Friedman says is “probably less than the number in three square blocks of Mid-Wilshire.”

That isn’t to say that Friedman believes nothing should be done for the industry. Rather, he says, Hollywood and government officials would do well to junk the blackmail-like talk that is increasingly heard when Hollywood threatens to take its business elsewhere if the state climate does not improve. Entertainment executives were vague in describing whether there is a legislative agenda they will push, although a similar news conference set for today in Sacramento suggests there will be.

The answer to why Hollywood came out with the study now probably lies in the fact that there have been a couple of high-profile battles that made Hollywood feel unappreciated as an economic force.

George Vradenburg, executive vice president at Fox Inc., acknowledged that two catalysts were Fox’s own troubles in getting permission to expand and modernize its aging Westside studio and the high-profile opposition by some residents in Hermosa Beach to filming scenes there of TV show “Beverly Hills 90210.”

But Friedman says the perception that the state is chasing away production just isn’t based in fact. He hopes the studies will be used to shift the issue to how to take a hugely successful industry and make it even more so.

“There’s a perception of massive decline even though there hasn’t been,” Friedman said. “We need to take a home run for this state and turn it into a grand slam. We need to focus on expanding an already robust industry.”