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SAG Travels Dangerous Road

Will the Screen Actors Guild do to Los Angeles what the United Auto Workers did to Detroit?

It’s starting to feel that way. Consider the situation.

The most radical faction in the 120,000-member SAG is in the leadership. They want authority to strike. A couple of weeks ago, moderates tried to negate the leaders but got beaten back. It’s unclear that the leaders will get their way, but the point is those most agitating to strike still have a leading role in this drama.

Besides this internal blood feud, SAG has a second fight that it believes is the big one. That is the external fight with the studios over how to divvy up revenue streams, including future new-media residuals.

But has SAG lost sight of the fact that it is in a third fight? That third fight really is the big one, because it is about survival.

As most everyone knows, all kinds of entertainment options literally have come online in recent years and more are streaming in. Not all that many of them need Hollywood at all.

Just think of all the Internet-based entertainment options that abound. Many weeks in the Business Journal, including this one, you can read an article about some startup that has jumped on the bandwagon of young companies creating some nontraditional entertainment option.

When I think of how my kids entertain themselves, I think of computer games, European soccer, and YouTube and various other Internet sites. I come up blank when I think about television or movies. My 8-year-old daughter watches “Hannah Montana,” and, well, that’s about it.

Actually, if SAG and the Hollywood establishment were clever, they would think of the nontraditional entertainment options not as a threat but as a fact. They would focus their energies on ways to better incorporate their talents and skills into the new options.

But, alas, SAG is preoccupied fighting the first two brawls, kind of like mastodons tusking over the last patch of turf that hasn’t yet iced over.

Now consider the history of UAW and Detroit’s Big Three automakers. For years they were locked in even more of a death grip. An increasingly radicalized UAW called for strikes, and the corporate bosses capitulated to their demands.

The more both sides fretted about work rules, pension obligations and job banks, the less they focused on creating snappy, safe, inexpensive and fuel-efficient vehicles of the future. They failed to fully understand the profound threat from non-Detroit car makers. When questioned, the tone-deaf bosses always seemed in denial. (“Most Americans don’t want to buy those tinny Japanese cars,” they huffed in the ’70s. “Most Americans don’t want to buy those expensive European sedans,” they said in the ’80s.)

Of course, as the automakers skidded, so did the fortunes of Detroit. In 1950, Detroit had the highest per capita income in the United States. But its ranking plunged to No. 62 as of a few years ago. Over that span, Detroit’s population has been chopped in half.

Does that fate await Los Angeles? Nah. Detroit is far more of a one-industry town than Los Angeles.

Still, the traditional entertainment industry is crucially important to the local economy, and that industry is facing ever-more intense threats from the outside.

Given the way SAG and the studios are behaving, it wouldn’t hurt for Los Angeles to diversify away from traditional Hollywood.


Charles Crumpley is editor of the Business Journal. He can be reached at

ccrumpley@labusinessjournal.com.

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