In the Hollywood Limousine car lot in downtown Los Angeles, something is amiss. Normally, drivers would be busy transporting actors and film crews about. But today, half the drivers have been sent home with their limousines, and few clients call. "There is no business. Because of the threat of a writers strike, we are already down by about 20% this quarter," says Arjang Tagaui, owner of Hollywood Limousine, which caters largely to Los Angeles' entertainment industry.
The impending strike by the Writer's Guild of America on the Alliance of Motion Picture & Television Producers could cripple Los Angeles, industry insiders say. The WGA is negotiating with producers for additional money for secondary markets such as video, DVD, and the Internet, as well as more control over the final product. If their demands aren't met by the time the contract expires on May 1, writers are threatening a walkout, which could halt film production.
Small businesses that rely on the movie industry have had a busy first quarter as film projects have been stepped up in anticipation of the deadline. But work is beginning to drop off, says Ed Clare, president and executive director of the Production Equipment Rental Assn., a trade group.
The near-term outlook for the food stylists, waiters, production crews, limousine companies, and other small businesses in the industry is beginning to look dire. According to Morrie Goldman, vice-president for communications at the Entertainment Industry Development Corp., a strike could cost up to $50 million a day in lost revenue. Adds Clare: "The companies are usually booked way ahead of time, but there is nothing on the books. We are going to see a near total shutdown."
Chris Oliver, a Los Angeles food stylist, has been designing food displays for feature films and TV for 12 years. Although she was inundated with work in the last four months, Oliver is afraid those earnings might be all for the year. With rent to pay and two children in private school, she says the drop-off is terrifying. Says Oliver, whose workload has gone from five to six shows a day, worth anywhere from $3,000 to $6,000, to nothing: "I'm panicked. Everyone [in the film business] is."
Tagaui, the limousine company owner, confirms that a rush in film production and two awards ceremonies gave him the best first quarter in years. But now he wonders how his chauffeurs will be able to support their families. "Mostly I am afraid for the drivers. They rely heavily on the tips. Meanwhile, they have bills to pay, families to take care of," says Tagaui.
One ray of hope came in early April when the WGA pledged to continue bargaining with the Alliance of Motion Picture & Television Producers. Clare and other industry insiders think's is likely that the WGA will avoid a walkout. But because many productions were pushed into the first quarter, the stockpile means a slow second quarter is almost certain.
"Even if there's no strike, there will be at least a 25% slowdown in business as a result. If the strike does evolve, we will see a 50% drop in business," says Clare.
Small-business owners are scrambling for others way to stay afloat. Oliver says she may go back to cooking for weddings and bar mitzvahs, which would mean a pay cut. Food styling for commercials, though more labor-intensive than for movies, is another option. But if a strike is called, this market could be flooded with 50,000 unemployed film workers trying to get jobs on commercials, she says.
Small caterers say they're supplementing film-studio clients with corporate clients. According to Sandy Arabia, who works in the catering division of Tommy Tang, one of Los Angeles' top three catering companies, business has already come to a standstill, and his company had its first cancelations in years. But Arabia is confident it can fall back on corporate events.
"Normally I would be scared. But we have a good name, and our restaurants are consistently busy. Even in the last strike and the depression of the mid-Eighties, we were all right. I think we will be fine with the business-catering jobs," says Arabia.
The film-crew and equipment companies, many of which employ fewer than 25 workers, may have more limited options, says Clare. About all they can do, he says, is shorten the workweek, encourage vacations, and reduce their rates. The next step is layoffs. Others are just going to have to ride out the slow times. Says Tagaui: "God bless lines of credit."
By Deborah Gardiner, a freelance business writer in San Francisco