Kyser Sees More Woes for Production Sector

LOS ANGELES Despite a short-term rise in local commercial production, the Los Angeles Economic Development Corp. forecast for 2004 issued yesterday was grim.

“The state of the production community is troubled,” commented Jack Kyser, LAEDC chief economist. “Runaway production, piracy and now the prospect of a WGA, SAG and AFTRA strike. Thank God the commercial contract is not up [for renewal].”

The Screen Actors Guild commercial contract, which halted production from May to October 2000, is in effect through October 2006, said Pamm Fair, deputy national executive director, SAG, Los Angeles. Fair has said that despite “a lot of fingers pointing to us for driving work out of the country,” the charge is “not fair. But certainly runaway is taking a huge bite.”

Kyser said that jobs in the production industry are in decline. From a 1999 peak of 146,000 workers, the 2003 figure is 114,000. Kyser forecasts a further drop to 111,000 in 2004, despite a predicted burst in commercial production borne out by a rosy January.

Because of the upcoming Olympics and California elections, Kyser said there would be a significant amount of extraordinary advertising. “By fall, advertising will support several hotly contested initiatives, such as on worker’s comp, mandated healthcare and split-roll taxation, a jiggering of Proposition 13,” he said. “Advertising is one of the brighter lights in the California economy.” Kyser ranked the industry at B-, but warned that grade could drop in the near term.

Kyser said production cost-of-labor issues might arise again because of recent reports of unions in Vancouver, B.C., offering salary givebacks to solicit production and counteract a weak American dollar. Steve Dayan, a business agent for Teamsters Local 399, said two weeks ago that he did not predict a similar move in California’s unionized labor. “That,” Dayan said, “would be a race to the bottom.”

Kyser added that Governor Arnold Schwarzenegger might do something about runaway production, owing to his inside knowledge of Hollywood. “I think he will get to it after worker’s comp, paid family leave and mandated healthcare, which are big issues for production companies as well,” Kyser said.