Commentary

By MARVIN R. SELTER “Every morning in Africa, a gazelle wakes up. It knows it must outrun the fastest lion or it will be killed. Every morning in Africa, a lion wakes up. It knows it must run faster than the slowest gazelle, or it will starve. It doesn’t matter whether you’re a lion or a gazelle when the sun comes up, you’d better be running.” There are lessons to be learned from this parable, particularly when it comes to the San Fernando Valley and the Los Angeles economy. We simply can’t afford to be smug or complacent, even in times of prosperity. Who can predict when the next economic free-fall will be upon us? That’s why it is incumbent upon us to support industries offering the greatest potential for regional economic development. At the top of the list is the entertainment sector particularly, the film, television and music industries. These businesses employ tens of thousands in the big studios and even more employees in ancillary service industries that support the entertainment business. It’s an industry that has shown remarkable growth, creating jobs and spawning small-business development here in the San Fernando Valley and throughout the region. Entertainment production growth has been focused in Los Angeles County. According to the Motion Picture Association of America, in 1996 the industry poured approximately $25.6 billion into the region. The number of jobs directly generated by motion picture and television production grew by 38 percent between 1992 and 1996. In contrast, U.S. employment increased by 10 percent in the same time frame. This dramatic expansion has revived the Valley economy. We must not take this industry for granted. Many covet it the Canadians, other states, neighboring cities, among others. And these challengers are making some headway, according to recent news stories. Although the Southern California region has a competitive advantage in entertainment and tourism, it can only maintain this edge if the studios are able to respond quickly and creatively to shifting market trends. If the studios are restrained from doing so, our economy will surely be affected. It’s a simple fact: The entertainment industry is considered the single most important key to our economic future. That’s why I’ve become a strong advocate of Universal Studios’ expansion plan here in the Valley. What’s this plan all about? It’s about the creation of 8,000 new jobs for the Valley at Universal City over a 15-year period. That’s above and beyond the 14,000-plus jobs that exist at Universal today. It’s about a total economic output in the city and county of Los Angeles of more than $3 billion annually, plus the $3 billion to be expended during construction of the new development. It’s about nearly $15 million in new tax revenue each year to Los Angeles city and county money that is sorely needed to fund and improve public services. It’s about a major studio making a major investment in the future of Los Angeles. Advancing a substantial development project through the political process in Los Angeles is always difficult. But when it comes to Universal’s project, the pathway has been particularly frustrating. It’s two years and 14 public hearings later. And there is still no closure. Universal is a worldwide business with many choices as to where to put its money and its people. The company is known for its film and television business, operating the largest studio in the nation at Universal City, and for its theme parks, which are going worldwide. But there is much, much more. The company’s recent acquisition of PolyGram propels Universal to the top of the music world, both here and around the globe. This bodes well for Los Angeles and the Valley, which hopefully will be the major host for these mega-music operations. I believe Universal continues to weigh its business needs, as all responsible businesses do. The media has reported that the company is evaluating the costs and benefits of the Universal City expansion plan before it re-enters the arduous permitting process. To date, Universal has made many concessions related to the plan. Expensive concessions have been discussed by decision-makers. Many have been agreed to by Universal. But these costly concessions seem never-ending. When Universal takes its plan off the shelf and plunges in once again, we all must pay attention. Everyone who cares about the city’s and Valley’s economic well-being must come to the table. We can’t let this billion-dollar investment in the future of the Valley, the county and the region get away from us. Laying back won’t cut it ask the gazelle and the lion that survived. Marvin R. Selter is president of CMS Inc., a management consulting firm in Sherman Oaks, and immediate past chairman of the Valley Industry and Commerce Association.