Entertainment Sector Should Help Keep Recession in Check

Despite recent layoffs at major studios and production companies, the entertainment industry should help the region’s economy weather the nationwide recession, San Fernando Valley business and civic leaders said Tuesday.

The industry is still reeling from the national slowdown and the Sept. 11 terrorist attacks, but it remains one of the top five employment sectors in Los Angeles County and No. 1 in the Valley, they said. It contributes $31 billion a year to the county’s economy, or nearly 9% of the total.

“Entertainment, like all industries, has gone through a slow period,” said Fred Gaines, an attorney elected chairman of the Valley Industry and Commerce Assn. during the nonprofit organization’s annual meeting Tuesday at the Hilton Universal City.

“But the industry is still strong,” he said. “I expect it to remain strong.”

An estimated 250,000 people are employed countywide in entertainment, which encompasses TV, movie, music production and affiliated businesses, according to the Los Angeles County Economic Development Corp. This year, Disney and other large employers eliminated several thousand jobs.

“People are always going to watch TV and go to the movies,” Gaines said, especially since war and security threats are keeping many people close to home.

A drop in travel has had little effect on “runaway production,” the loss of film and television shoots to out-of-state competitors, VICA members said. The majority of TV movies are shot in Canada and other less expensive locations outside California, the association said. Runaway production in other countries costs the United States about $10 billion a year, according to the U.S. Commerce Department.

VICA is working to form a nationwide coalition of small businesses and chambers of commerce to lobby for tax breaks and other incentives to keep production in the United States, said Gregory Lippe, an certified public accountant who heads the group’s subcommittee on runaway production.

“The Valley is the film capital of the world,” Lippe said. “We need to keep it in California and in the United States. If we can do that, the industry will be in even better shape.”