The world knows Hollywood, but Angelenos have long known that the heart of the entertainment industry is really in the San Fernando Valley. Now there’s a study that, for the first time, shows the economic might of the entertainment industry here. Taking numbers generated by the Motion Picture Association of America, a Valley business group has calculated that the film and TV industry generates $6.4 billion in annual economic activity for the San Fernando Valley. And that figure based on payments for production goods and services, as well as payroll is four times the amount for Hollywood itself, according to Bill Allen, president of the Economic Alliance of the San Fernando Valley, which did the number-crunching. “We’ve been trying to show that when you look at this area as a regional economy, it is very significant,” said Allen, former president of MTM Television in Studio City. The Valley breakdown was culled from a larger study of the economic impact of the motion picture industry statewide. The alliance broke out figures for production spending for Valley zip codes. Not surprisingly, Burbank emerged as the Valley’s show-biz capital with $1.7 billion in economic activity. Burbank is the home of Walt Disney Co. and Warner Bros. and is the West Coast headquarters for NBC. Universal City, home of Universal Studios, generated $741 million in activity. Allen and others, however, said they were surprised to discover that the entertainment industry has significant reach in other parts of the Valley in part because Valley residents from Sylmar to Calabasas cash studio paychecks, and local businesses provide studios everything from catered food to klieg lights. “I think one of the revelations of this study shows how spread out the industry is,” said Melissa Patack, vice president of the California group for the Motion Picture Association of America, which released the larger study last month. The Valley breakout shows that entertainment generated some $281.5 million of production spending in Van Nuys and $73 million in payroll. The findings may come as a surprise to some, but those who work or live in entertainment-heavy Valley communities have been aware of the activity for some time. Realizing the large amount of entertainment-related business conducted in Van Nuys, that community’s Chamber of Commerce has been trying to put together a film council for some time, said Executive Vice President Nancy Hoffman. Woodland Hills, home to Panavision LP, also is home to a number of lower-profile entertainment-related businesses. “We have in Woodland Hills several film distribution companies,” said Bob Pearlman, president of the Woodland Hills Chamber of Commerce and a partner with the accounting/consulting firm Grant Thornton LLP. Even Pearlman said he probably wouldn’t be aware of the film production community except for the fact that several of the companies are clients of Grant Thornton. The Economic Alliance hopes use the MPAA’s findings as a beginning step to raising those companies’ low profiles. The economic alliance plans to compile a list of the less-visible companies, and promote the information in the organization’s upcoming almanac and on its Web site. “We want people all over the world to be able to access the information when they’re planning where to locate the business,” said Allen. In particular, Allen hopes the study’s findings will help entertainment companies broaden the list of relocation sites they will consider to include places outside of Beverly Hills and Santa Monica and the other well-known entertainment locations. The MPAA figures were compiled by looking at the total vendor payments made for goods and services by film and TV studios, so a portion of the dollars are coming from companies that are not themselves in the entertainment industry. For example, an entertainment company’s payments to a lumber company would be included in the tally, even though the lumber company has many non-entertainment customers. In addition to payments to vendors, the MPAA also looked at payroll expenditures. To identify how much of those expenditures were made in the Valley, the association broke out payroll by zip code. And again, some unexpected results surfaced. Sherman Oaks, for instance, accounts for more than $208 million in entertainment-industry payroll. Much of that is being paid to writers and other entertainment freelancers who are working out of their homes in the hills south of Ventura Boulevard, insiders said. Business developers in the area are already acutely aware of the entertainment-heavy demographics of the area, said Sharon Mayer, chief field deputy to City Councilman Michael Feuer, who represents Sherman Oaks and surrounding communities. Mayer said the area’s demographics were a prime reason the new owners of the Sherman Oaks Galleria decided to renovate the movie theater in that shopping mall. “They’re saying they want state-of-the-art theaters” because the community will demand it, Mayer said. As a former Studio City resident who now lives in Sherman Oaks, Mayer said she is also aware of the number of film workers who live in those communities. During the writers’ strike some years back, “I lived in a Studio City condominium and the pool was full.” The next step for the Economic Alliance will be to identify the entertainment companies that declined to participate in the MPAA’s voluntary survey, including NBC, and to add those companies’ contributions to the survey statistics, Allen said. “They may be post production, satellite distribution, they may be digital visual effects, multimedia gaming but we’re going to try and use it to attract businesses of all types,” said Allen. This year is the first time the MPAA was able to break out the economic impact for the Valley, having been assisted in that endeavor by the economic alliance. The MPAA’s general study, released April 24, found that the entertainment industry generated $27.5 billion in economic activity statewide in 1996, of which $25.6 billion came from Los Angeles County.
