Against a backdrop of increasingly likely strikes by writers and actors, the beleaguered Los Angeles production community could be in for an economic double whammy this year as national belt tightening triggers a cutback in the amount of money spent to make new television commercials.

The timing of the emerging advertising slump could not be worse for thousands of local producers, gaffers, sound technicians, camera operators and other skilled trade workers who make their living toiling behind the cameras. Many of them are still recovering from the economic dislocation caused by last year’s six-month strike by commercial actors against the advertising industry. A good portion of those workers had been counting on commercial jobs to help fill the void if the Writers Guild of America and Screen Actors Guild are unable to reach new labor accords with the studios, jobs that it now appears will be tough to come by. “With strikes, commercials will be an even more important part of the work our members do,” said Bruce Doering, national executive director of the 5,000-member International Cinematographers Guild, Local 600. “You’re going to have everyone in the television and feature industry fighting for commercial jobs. It’ll be the only game in town.”

Already a slowdown is underway in the number of commercial productions seeking permits to film in Los Angeles, according to the Entertainment Industry Development Corp. In March, as television and motion picture production shot through the roof in anticipation of a possible July work stoppage, the number of commercial production days declined to 645 in Los Angeles from 682 in February and 810 in January. The March totals were down 13 percent from the like year-earlier period.

National context

“Advertisers are spending less and that is making its way down to the number of spots being shot,” said Morrie Goldman, vice president of communications for the development corporation. “We saw a lot of build-up over the past couple of years due to the dot-coms. You’re not seeing that spending anymore.”

“If there are strikes, then the people who are normally hired in television and features are going to be in a very vulnerable position. We expect some of those people to be knocking on our door,” said Frank Stiefel, whose Santa Monica-based Stiefel and Co. has produced about 100 commercials a year over the past several years. Stiefel said he expects that pace to slow down somewhat in 2001.

“Everybody experienced a drop in (commercial) shooting during the first quarter, and the second quarter is typically slow leading into the summer season,” he said. “We’re seeing the same reticence to buy that every other sector of the economy is experiencing.”

Steve Caplan, senior vice president of the Association of Independent Commercial Producers, which represents about 300 companies that make television commercials, said that despite the decline in the number of commercial film shoots in Los Angeles in the first quarter, the overall numbers remain fairly strong when compared to past years and do not signal a major retreat by advertisers.

Decade of growth

Throwing out the strike-interrupted year 2000, commercial television production has undergone a steady increase in Los Angeles since the mid-1990s, as spending on advertising outpaced even the impressive gains in the overall economy. In 1995, the Entertainment Industry Development Corp. reported 4,845 days of on-location commercial production in Los Angeles, a total that increased to 6,569 days by 1999.

“I don’t believe these are low numbers,” said Caplan of the first-quarter figures. “You look back at 1998 and 1999 and (commercial production in those years) might be a little higher, but that was during the dot-com explosion. You couldn’t do commercials fast enough for those companies.”

But those days are already a distant memory. The steep tech drop-off and downturn in the national economy are taking a toll on Madison Avenue and the effects are being felt nationwide. Analysts are forecasting just a 2.5 percent increase in ad spending this year, compared to an almost 10 percent jump in 2000. Major advertisers such as Proctor & Gamble Co. and General Motors Corp. have been announcing cuts in ad budgets and some of the larger national ad agencies have made their first job cuts in years.

Even Caplan, whose outlook is mostly optimistic, admitted to some trepidation about what’s ahead.

“There is some unease, some speculation about what’s going to happen with the big-picture economic stuff,” he said.

Although his business has remained strong through the first quarter so much so that he is moving forward with plans to open a satellite office in Orange County Michael Waters, president of Santa Monica-based ARTiFACT, a 25-person boutique production house, acknowledged sharing some of that concern. Exacerbating the slowdown in the national economy has been the uncertainty among advertisers about a strike-interrupted fall television season, he said. Still, Waters said he doesn’t believe a drop-off in television commercial production will persist.

“I don’t necessarily agree with all the doom and gloom. Advertisers know nothing moves merchandise like a television advertising campaign,” he said. “The big question is, will advertisers pull the trigger and buy these campaigns when they don’t know what the new season will bring?”

Moreover, strikes by actors and writers would free up what is currently jammed studio space around Los Angeles, Caplan said.

“If the competition is not there, it would relax some of the cost pressures and give commercial production a boost,” he said.

While he is anticipating leaner times this year, Stiefel agreed that most advertising slumps are not prolonged because advertisers are quick to see the consequences of cutting back on television spots.

“I’m guessing the impact will be felt most in the first half of the year,” he said. “At first (advertisers) will be reluctant to commit the money. But if they are interested in maintaining their market share, they are going to have to be on the air. They are going to have to buy ad time and they are going to have to pay for production.”