Writers' strike's wide ripples

The strike, now in Week 2, reverberates through the broader Los Angeles economy.

An air of excited solidarity surrounds the picketing writers as they walk and pivot in front of CBS Studio Center here in the heart of the entertainment industry. But the mood also has an undertone of caution: Everyone knows that Hollywood strikes are never neat, and that the ripple effect will be wide in a county where entertainment generates some $30 billion in business a year.

One week into the strike by the Writers Guild of America (WGA), it's hard to find someone who isn't touched in some way, particularly near the studio production centers.

"I'm here striking for myself, obviously," says Barbie Kligman, a scribe on CBS's "CSI: NY." "But I'm also here hoping to get things going because I worry about our crew and all the other people who depend on us for work."

That would be people such as Judi Bell, owner of Cinema Paper Rentals and Graphics in North Hollywood, who relies 100 percent on movie and TV business for her livelihood. Her six-person shop provides the sort of "official" paperwork that doctors, lawyers, and everyday characters on shows such as "Law & Order" or "ER" paw through, slam down, and file. In the past week, says Ms. Bell, several top TV shows have canceled major orders or postponed them indefinitely ("that's the same as canceling," she says). Her business has already plummeted to about 20 percent of its regular volume. She's laid off one worker and warned the others to expect cuts in their hours.

"I guess I should have been prepared," says Bell, "but I just kept crossing my fingers and hoping they'd get it worked out."

But at the largest rally in WGA history this past Friday, while some called for the producers to negotiate, rankand-file union members affirmed their determination to strike as long as necessary. No formal negotiations were being reported as of press time Monday.

Like Bell, most people and businesses who rely on the studios for work are already feeling the pinch, says Jack Kyser, who tracks the local economy for the Los Angeles Economic Development Corp. Small businesses and independent contractors, covering everything from caterers and wardrobe mistresses to limo drivers and cameramen, are being laid off. Many had started to circle the wagons before the strike began.

"All the way from Studio City to Burbank and Glendale, sales began to drop over a month ago as industry people began saving their money," says Mr. Kyser. "Suppliers, prop houses, everyone, they're all looking ahead … because they just don't know how long this will go on."

Losses in the last major writers' strike, a 22-week walkout in 1988, topped half a billion dollars. If the writers stay out as long this time, Kyser says, losses will top $1 billion. That's a hunk of human misery, he adds.

Personal bankruptcies rose during the last big strike – and are likely to do so again, notes Century City bankruptcy lawyer Peter Davidson. Despite tightened rules in recent years for bankruptcy filing, he says, inevitably people will go into debt to bridge the employment gap.

This time, though, the safety net is smaller, he adds. The No. 1 source of emergency income for homeowners is their home mortgage, but the continuing meltdown in the housing market will make new loans nearly impossible for out-of-work industry gypsies. That means more people will be running up their credit cards, a trap that sucks many into bankruptcy when the bills come due, says Mr. Davidson.

A cruel irony of bankruptcy law, he adds, is that courts regard future "residuals" as assets. These are the monies paid to writers in perpetuity, every time their work is used in some fashion. They are also at the heart of the current contract impasse. In bankruptcy, these future payments enter the estate and, like an annuity, can be sold to pay creditors.

The Studio City Chamber of Commerce sits on the CBS production lot. While filming doesn't appear to have slowed yet, all the chamber's merchants are concerned, says executive director Esther Walker. "This is going to hit everyone, especially with the holidays coming."

Businesses out on Ventura Boulevard already report losses. Industry luminaries have trooped across the street to Du-Par's Restaurant since the days of Humphrey Bogart and Lana Turner, but on this late afternoon, as the sounds of nearby picketers float through the front door, manager Jaysee Paz frets.

"People aren't coming in for breakfast and lunches like they used to," he says, adding that business is down 6 to 7 percent. He's going to have to lay off help and cut back hours, he adds with a frown, looking around at nearby waitresses with no tables to serve.

Next door at La Salsa, a fast-food spot, the story is the same. Business is down; people aren't coming in, even for fast food. But in a particularly Hollywood-like twist, one local establishment actually reports an uptick in business: Sunset Tan, a tanning salon.

"We've actually seen an increase in people coming in and paying for reservations ahead," says a worker behind the counter. "They're not going to stop going to the salon just because they don't have a job," she says. Upon reflection, she adds, it's all the more reason to look good and feel good about yourself when you're looking for work.

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