Negotiations begin on a sour note

Worries about possible Hollywood strikes will lead to 4,000 new jobs in the film biz in L.A. County this year, up 3% to 133,900, followed by a loss of 3,000 slots in 2008, according to a forecast issued Wednesday by the Los Angeles Economic Development Corp.

Jack Kyser, chief economist at the agency, asserted that stockpiling by studios and nets in preparation for a work stoppage will be the key driver in promoting Hollywood job growth this year. And next year’s decline will be caused by a production slowdown, he added, even without a strike.

“There will be some kind of disruption next year,” Kyser said. “Even if all the guilds make deals, we’ll have a de facto strike situation with activity slumping while inventory is worked off.”

Negotiations between the companies and the Writers Guild of America began Monday on a sour note and will continue today to replace the current contract, which expires Oct. 31. The contracts for the Directors Guild of America and the Screen Actors Guild expire next June.

Kyser told Daily Variety that recent indications — the tenor of WGA talks plus the complication of sorting out compensation for digital platforms — back up his downbeat assessment. He noted that the scenario is similar to that of 2001, when job slots fell 10% to 126,000, then declined another 5% to 120,200 in 2002 due to the lingering impact of stockpiling — even though there was no strike.

Positive factors for the local showbiz industry are the strong 2007 box office performance domestically and internationally. Negative factors listed in the forecast include piracy and runaway production to such states as New Mexico in the face of a lack of government incentives in California.

Kyser noted that the latest version of production incentive legislation in California could be lost amid what he termed “other drama” in Sacramento. “The industry needs to make the case that its success has a big link to success in tourism, high technology, apparel and videogames,” he added.

The breakdown in job slots for this year, based on state figures, also includes 19,500 for independent artists, writers and performers and 11,100 in broadcasting. Kyser noted that those numbers tend to undercount actual employment, mostly due to freelancers and independent contractors working in one- or two-person shops and on a project-by-project basis.

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