The GOP is resurgent. No, not the Republican Party — the Gross Oscar Product, the measure of all the money the movie industry spends during the awards seasons that culminates in the Academy Awards on Sunday.
Florists, caterers, limo drivers, valet parking attendants, hair stylists and other vendors and service providers to Hollywood are reporting a strong uptick in business, providing clear signs that the Oscar economy is staging a comeback.
“During the recession a couple of years ago, nobody wanted to be ostentatious. They wanted to keep it low-key and in good taste,” Richard LoGuercio, owner of Town & Country Event Rentals, a Van Nuys firm that rents furniture, cooking equipment and red carpet rolls for large events. “Now people are willing to spend a little bit more on items.”
One of L.A.'s leading economic indicators — demand for parking spaces — is also on the upswing.
“People are entertaining again,” said Chuck Pick, co-owner of Chuck’s Parking, whose Sherman Oaks company is providing valet parking for 21 Oscar parties this week. “We’re pretty much back to pre-recession dollars.”
This year, Pick noted, the parties are larger, which means more cars to park and, for his company, higher revenue — nearly $50,000 just this week.
Although most of the attention Sunday night will be fixed on the famous actors walking away with the statuettes, the unrecognized winners will be the army of workers whose livelihoods are tied to providing the services and products during the months-long awards season that has its climax this weekend.
The federal government doesn’t yet track the Oscar economy, but the Gross Oscar Product is estimated to create jobs for at least 7,000 people and generate more than $130 million in spending — about the size of the budget for the city of Alhambra — based upon a tabulation of advertiser spending in the awards broadcast, “for your consideration” ads in magazines and newspapers, and money the studios spend on Oscar parties.
Hollywood movie studios can spend from $2 million to $20 million pushing their Oscar contenders, which include hosting lavish parties that are the bread and butter for many in the service industry.
So when the studios curtailed Oscar campaign spending in the wake of the 2008 financial crisis, the pain was wide and deep.
This year, with the stock market recovering and consumer confidence on the rise, as well as a tighter Oscar race, Hollywood’s campaign machine is cranking up again. That’s fueling the local economy with heightened demand for event planners, security, caterers, stylists and others who serve the industry.
ABC alone is expected to generate more than $80 million from selling advertising on the network, up 14% from $70 million last year. Walt Disney Co., the parent company of ABC, pays the Academy of Motion Picture Arts and Sciences $65 million to $70 million annually for the domestic and international TV rights to the Academy Awards. The three-hour-plus show, which requires 3,000 people working behind the scenes, is costing the academy about $30 million to produce, $1 million to $2 million more than last year.
“It’s a huge undertaking. It just grows every year,” said Michael B. Seligman, supervising producer for the Academy Awards.
The academy is doling out more on such things as Oscar statues — they cost about $830 apiece, double the cost of five years ago because of skyrocketing gold and copper prices — floral arrangements and food.
Whereas last year’s Governor’s Ball menu was downsized to high-brow comfort food like chicken pot pie and mini Kobe burgers, this year’s menu from chef Wolfgang Puck returns to luxury cuisine such as lobster, Dover sole and sushi.
The money the academy spends flows down to small-business owners like florist Mark Held of Mark’s Garden in Sherman Oaks. For the Governor’s Ball, his company will supply a record 13,000 flowers — arrangements of orchids, tulips and roses — up from 10,000 last year.
“We feel the mood is a little more upbeat, not just about the Oscars but about business in general,” said Held, who also supplied flowers for the Golden Globes. “We’re expecting a bit of a bump the day after the Oscars when people send out congratulatory arrangements.”
Mary Micucci is the owner of Along Came Mary, an event producer and gourmet catering company that has serviced several large events this year. These include a 4,000-person party after the Grammys and a private party in Brentwood hosted by Paramount Pictures for its best picture nominee, “The Fighter,” that was attended by 600 people.
“We’re doing double the amount of business this entire awards season compared to last,” Micucci said.
Oscar clients aren’t just buying more goods and services, they are also opting to spend more for higher-quality items.
For example, instead of renting a plain, uncovered chair for $8 apiece, clients are now willing to pay an extra $7 for an upholstered chair, or to order the gold-banded china plates for $1 each in place of the plain white china that is 40 cents a plate cheaper, said LoGuercio of Town & Country Event Rentals.
Oscar-season charity fundraisers are also coming back. The Dare2Care event hosted by TV personality Leeza Gibbons was revived after being canceled last year because of the economic downturn.
“You know, in a bad economy, charity is the first thing to go, but people are starting to give again,” said Chad Hudson, who produced the event held Thursday at the trendy Boa restaurant in West Hollywood. Organizers had initially planned to hold a low-key cocktail party, but with increased interest and a healthier budget, they decided to lease the venue for the entire day, Hudson said.
Still, despite the rise in awards-season spending this year, no one is quite partying like it’s 2007 again. Like consumers everywhere, even Hollywood appears to have permanently adjusted to a new normal.
“I don’t think budgets will ever be the same as they were,” Hudson said of the pre-recession days. “We know we can do these things for less, and perhaps that’s smart.”