With the Golden Globes losing its luster this year, the big question now is just how much green Hollywood will lose as a result.
The answer: a lot.
Cancellation of the kudocast due to the strike could cost the local economy upwards of $80 million, according to the Los Angeles County Economic Development Corp. (Same org values the Academy Awards at around $130 million.)
And there will be losses that are impossible to calculate: The film studios and networks use the event to publicize their kudos contenders.
NBC will air a one-hour version from the Beverly Hilton Hotel. But with money already spent to produce the event, the after-parties cancelled, last-minute travel plans being changed and TV production crews being dismissed, the fiscal result will be widespread.
Hardest hit will be NBC, which usually pulls an estimated $15 million-$20 million in ad revenues from the three-hour live broadcast, which courts mostly women 18-49.
Instead, advertisers will pay a reduced rate to air spots during the NBC News-covered event that seems likely to generate lower ratings.
The network will particularly feel the loss, as it is in fourth place in primetime, its profits well below those of ABC, CBS and Fox.
As for the Hollywood Foreign Press Assn. and Dick Clark Prods., they’re losing the license fee NBC usually pays.
According to tax records, the HFPA netted $5.8 million from the 2007 telecast. Since the licensing fee is split after the show’s expenses are paid, Dick Clark Prods. would net a similar amount.
The show’s production costs an estimated $1 million-$2 million, with much of that already spent on the venue, sets, lighting, music, crews, red carpet, security and trucks — money Dick Clark Prods. and the HFPA won’t get back.
Dick Clark Prods. has no involvement with the news conference.
All of the contracts for advertising time on NBC Sunday from 8-11 p.m. will be abrogated, as though the telecast never existed. All contracts have a force-majeure clause — the so-called act-of-God clause — that lets NBC off the hook because the cancellation couldn’t be “reasonable anticipated or controlled” by NBC, one veteran media buyer said.
Advertisers will try to improvise and spend that money on other broadcast networks and on various cable nets during the weekend. But if there’s a strong competitive show, such as Fox’s preem of “Terminator: The Sarah Connor Chronicles” at 8 p.m. Sunday, it’s probably already sold out because of high demand.
The HFPA will also lose out on the sale of tickets and tables in the Beverly Hilton’s ballroom, as well as ads in the program. As a result, the scholarships and the programs it helps fund, such as for film restoration, are also hit.
The NBC Universal-Focus, HBO and Warner Bros.-InStyle hosted after-parties have been cancelled, while the plug is expected to be pulled on affairs hosted by the Weinstein Co. and Fox-Fox Searchlight.
“Who’s going to come to these parties and sit and watch them read a press release?” said one exec.
The WB-InStyle event alone attracted roughly 1,200 guests last year.
Industryites said those parties carry a pricetag of $350,000-$750,000, with many of the costs to produce them, including catering fees, already paid for and nonrecoupable. Other elements will be used at other events later this year.
Most gifting-suite organizers didn’t consider canceling their swag-packed events.
“There’s no reason not to gift the celebrities and trendsetters in L.A. due to the strike,” said Melissa Lemer, who along with business partner Lorena Bendinskas will host the Silver Spoon Buffet over two days this week at Voda Spa. “They still worked hard on the movies or TV shows. Those movies were still made. Those shows are still on and running.”
However, it’s uncertain how many out-of-town stars will be coming to L.A.
SAG notified publicists on Monday that the WGA plans picket lines around the press conference event, and it hopes actors will not cross those picket lines.
In a strike-related move, Silver Spoon’s suite will take donations that will go to IATSE Local 44.
“It’s to generate awareness of the people that aren’t working and are out of jobs,” Lemer said.
Some companies that rely on the Globes and other high-profile events, including hotels, limo rental firms, stylists, photogs and messengers, won’t feel the full impact until Sunday.
“There will certainly be people who feel the impact from a reduced Golden Globes,” said Jack Kyser, senior VP and chief economist for the LAEDC.
For example, if there is indeed a modest celeb turnout, that would affect the photographers who cover them. The photos from the Golden Globes run in magazines throughout the year.
“This is a double whammy for us because the People’s Choice Awards didn’t have a red carpet,” said Celebrity Photo prexy Scott Downie. “Agencies count on these larger events to carry us through the slow times when not much is happening in Hollywood.”
Mark Kesel, owner of Event Messenger Service, would normally employ eight motorcycle messengers to move photogs’ digital cards to wherever they are downloading the images — anywhere from a hotel room to a nearby Starbucks.
“I had no idea the strike would affect me this way,” Kesel said of this year’s Globes. “The money from these big events fills in the financial hole we get during January through February, which is always a slow time for messenger services. With the extra money from these shows, I usually buy new tires for the motorcycles or pay the registration.”
(Bill Higgins, David Cohen, John Dempsey and Tatiana Siegel contributed to this report.)