For years, the economic health of New York City could be summed up in one number: the Dow Jones Industrial Average.
The city’s business cycle still moves in tandem with the stock market, but the media and entertainment sector is flexing its muscle in Gotham.
The industry sector that has been defined by New York State Comptroller H. Carl McCall’s office as culture and media now accounts for 5% of the city’s total employment, about the same level as the securities industry.
The culture and media sector includes jobs in film and TV production, legit theater, museums, newspapers, magazines, books, cable and TV networks, but not telecommunications.
On a non-seasonally adjusted basis, the number of culture and media jobs has increased by 19% since 1992. According to McCall’s office, there were an average of 165,959 jobs in this sector during 1997.
These numbers don’t fully express the growth in culture and media activity since they do not reflect the fact that many union members are working a lot more than they used to, points out James Brown, an economist with the New York State Dept. of Labor.
Helping to fuel job growth in Gotham’s media and entertainment industries is a combination of factors: film-friendly admini-strations in both City Hall and Albany, a cooperative attitude on the part of labor in the wake of the studio boycott of the city during the early 1990s and the revitalization of Times Square, which is boosting tourism and Broadway admissions.
“The labor unions smoothed things over and the movie industry came back to the city,” said Rae Rosen, senior economist with the Federal Reserve Bank of New York. “The city was shown in movies as an exciting place to be and stars decided they wanted to live here.”
Direct expenditures on film, TV and commercial production rose 6.4% in 1997 to a record $2.4 billion, according to the New York City Mayor’s Office of Film, Theatre and Broadcasting. Despite the rebound of Gotham’s film biz, the securities industry still continues to generate a disproportionate amount of the city’s wages (17% vs. 11% 10 years ago), but Wall Street bonuses help spur the growth of the culture and media sector since well-heeled brokers and traders spend money on Broadway shows and other forms of entertainment and also make charitable donations to museums and other arts organizations.
Cultural groups that have campaigned against cutbacks in government arts funding have produced reams of research demon-strating that the arts help attract visitors to New York from around the globe. The Alliance for the Arts has estimated that the arts contribute $11 billion annually to New York’s economy.
Legit theater alone contributes more than $2.3 billion, according to the League of American Theatres and Producers. During the 1996-97 season, Broadway theater attendance reached 10,569,907, an 11.4% gain over the previous year and a 43.7% increase over the 1991-92 season.
Gotham has traditionally been the world’s media capital and the home of hundreds of company headquarters. All four of the major television networks (NBC, Fox, ABC and CBS) and nearly 20 cable networks make their home in New York.
The marriage between media and entertainment that came about through the mid-1990s mergers between Viacom and Paramount Communications, the Walt Disney Co. and Capital Cities/ABC, Time Warner and Turner Broadcasting also helped give rise to “Hollywood on the Hudson.”
But the consolidation in the publishing business and corporate downsizing has partially offset the rebound in film and TV production and Broadway attendance.
Thanks to tax subsidies offered by city and state government since 1994, media companies such as ABC, Viacom, Conde Nast and McGraw-Hill have pledged to remain in New York until well into the first decade of the new millennium.
Randy Levine, deputy mayor for economic development, planning and administration, says attracting and retaining media and entertainment companies is a major goal of Mayor Rudolph Giuliani’s administration. He points to the plan to allow Broadway theaters to sell air rights and the mandate that the buyer of the New York Coliseum build a 1,100-seat theater for Lincoln Center’s jazz program as evidence of this fact.
Another priority of the Giuliani administration is to increase the amount of production space in the city. “There is a shortage of soundstages,” said Levine. “The city is trying to encourage the development of soundstages in places such as the Brooklyn Navy Yard and Piers 52 and 53 along the Hudson.”
Many analysts and experts say the globalization of the national economy has played a major role stimulating growth in Gotham’s media and entertainment sector. “When you work in New York, you can talk to Europe in the morning, L.A. in the afternoon and Asia at night,” said Hal Vogel, entertainment analyst with Cowen & Co. “The city’s leadership position in media and entertainment is largely an accident of geography.”
Eugene Spruck, acting chief economist of the Port Authority of New York and New Jersey, is convinced that Gotham’s creative work force has contributed to job growth in the media and entertainment sector. “No other city in the U.S. has the same critical mass of artists, dancers, choreographers, playwrights, writers, graphic artists, musicians that New York does,” said Spruck.
The diversity of New York is what convinced Bob and Harvey Weinstein to open Miramax Films in their hometown. “In L.A. everyone is in the business,” says Harvey Weinstein. “I like the anonymity of New York. No one is pitching me when I go to the local deli.”