Tue, Jul

Los Angeles Economy on Strike! 


LA ECONOMY - It's a little confusing. There are 2 LA's...the City of LA and the County of LA. The County has 88 incorporated cities (and numerous unincorporated areas too). City of LA is the biggest, Long Beach is Number 2, and almost all the other cities are tiny by comparison. So when somebody says “Los Angeles,” whether it be a politician or the MSM, they should really specify which of the two they are referring to...I'm referring to BOTH of them.

WGA and SAG-AFTRA (SAG and AFTRA) Strikes

So, first the screenwriters were striking and now the actors are striking. This is very bad for the Los Angeles Economy. But necessary, because as Jessica Chastain recently said: “87% of SAG/AFTRA union members make less than $26,000 a YEAR. They don’t qualify for health insurance“.

So it was troubling to me when a misleading CNBC article was recently being circulated on Twitter by members of BOTH SAG and WGA. It's a June 1 article by Jennifer Liu entitled “The Top Hollywood Exec Made $498 Million in the Last 5 Years—384 Times As Much as the Average Writer”. She's referring to Warner Bros Discovery head honcho David Zaslav, who I refer to as The 500 Million Dollar Man (no, he's nothing like Steve Austin, although he is good at destroying stuff and intimidating GQ Magazine into editing and then pulling an unflattering profile) because he made almost that amount in only 5 years (the LA Times list circulating has him on top in compensation for a 5 year time period).

For those of you who are good at Math, do the Math in your head. That means that the typical writer made over 1M in 5 years ( kind of like an LA City Council Member )...actually, it's around 1.3M in 5 years or 260k per year (which is NOT true; more on that below). Coincidentally, that's exactly 10 times what Ms Chastain says, 87 out of a 100 SAG/AFTRA members make LESS THAN annually. So that would mean that Zaslav makes MORE THAN 3,840 times as much (almost four thousand times as much) as the typical actor. It's hard to negotiate in good faith with poor people who can't pay their bills when you make that obscene amount of money. How about giving most of it back so that they can pay their rents and mortgages. Let's get something straight: The strikes are for the majority of the membership of each union, not for the very top members (the famous ones), who also make ridiculous amounts of money. Tom Cruise would like to keep promoting his new movie right now...the strikes are not for folks like him...they're for all the actors and screenwriters whose names you do NOT know...which is most of them. The very top people have the leverage to get very highly paid upfront, the rest do not...they need the union for the leverage to eek out an existence, especially because of ridiculously low streaming residuals (and Zaslav started a trend of canceling AND removing content to avoid paying residuals...he even canceled and didn't release a completed movie for a tax write-off). I strongly believe that WGA and SAG-AFTRA should MERGE (just like SAG and AFTRA merged) for better leverage in the future! That way, you don't have actors working when the writers are on strike, which is what was happening until just recently.

Getting back to the CNBC article, it does NOT help the cause of the WGA (and SAG) and it's not true. It's mixing up MEDIAN Pay and Average Pay. It's also conflating the non-math definition of "average" with the math definition of average. The math average of the pay of all the members of WGA will be high because of a few people at the top making a ton. But the average/typical writer would make much lower MEDIAN pay. What's the difference between the Average & the Median of a set of numbers...in this case, the list of the pay of each WGA member IN ORDER FROM SMALLEST TO BIGGEST. Average means you add all the pay numbers/amounts, and divide by the total number of WGA members. Median is the MIDDLE pay number in the list. If a few people at the top make ridiculous amounts of money because they are creators/producers/successful, average pay will be strongly impacted by their pay, even though most screenwriters are having trouble paying their bills. MEDIAN fixes that by focusing on middle earners. If you use MEDIAN pay of WGA members, David Zaslav's pay will rightfully seem even more obscene & the ratio will go even higher. Typical (average) members of the WGA do NOT make 260k per year, and if they did, nobody would pity them.

So this CNBC article does NO favors to WGA and SAG-AFTRA. It actually HURTS their cause...maybe (cleverly) by design. Sneaky and insidious. So, to sum up, the average/typical, or middle-of-the-pack, writer IRONICALLY makes MEDIAN pay, NOT Math Average Pay. And a headline that screams otherwise is NOT a friendly headline. Keep in mind WHO OWNS CNBC. At the end of the article: “Disclosure: Comcast is the parent company of NBCUniversal, which includes CNBC.” What's ironic is that the article includes a list and Brian Roberts, CEO of Comcast, is Number 8 on the list with 170M in 5 years. If the author had put him in the headline, she'd be fired.

Consider the source of the article. CNBC is a station for Wall Street, not Main Street, where investors/stockholders are the main viewers. Also, CNBC is owned by NBCUniversal (NBCU), which just trimmed the trees so that the writers and actors would get burned...and maybe get skin cancer (the new LA City Controller FINALLY made himself useful, saying NBCU did not have tree trimming permits for those trees during the last 3 years)..AND, according to The Wrap, “[the unions] accuse the studio of blocking access to sidewalks next to its Lankershim Blvd. gate with fences”...NBCU has “forc[ed] picketers to patrol in busy streets with significant car traffic where two picketers have already been struck by a car and...refusing to provide K-rail barriers to establish pedestrian walkways for picketers to use” Where is City Council President Paul Krekorian to lay down the law on the Big Corporation when all of this is going down? And Peacock, NBCU's streaming service, just announced its first subscriber rate hike!

OTHER LA Strikes

The Hotel Workers have been striking on and off. You really wouldn't want to own a hotel in the City of LA. The politicians kowtow to the unions and micromanage the hotels here.

A few developers (including hotel) have been able to get a taxpayer subsidy in the past by arguing that their projects don't pencil out financially without it to the LA City Council, which is ridiculous.

Shower a few local politicians with money (legally) and get Millions of dollars in taxpayer subsidies for MANY years by getting to keep the HUGE nightly hotel room tax or the City's portion of the Sales Tax. Westfield got the latter for their The Village at Westfield Topanga in Woodland Hills from Council Member Bob Blumenfield in 2014 to the tune of an estimated 59M dollars over 25 years, even after they had dropped the hotel component of the project. Giveaways like that are so wrong, they give certain operators a competitive advantage, and they starve the City of needed revenue for basic services.

The Hotel Industry in the City of LA is in shambles. Hotels were used to house the homeless long term during The Covid Years. I remember an LA Times article during Covid when I had to match curtains and carpets from pictures in the Times to confirm that a Luxury Hotel down the street from me, the former Orlando Hotel, was being used as homeless housing for over a year. They also used the Sportsmen's Lodge Hotel in Studio City. That one's an interesting story. Developers and Politicians using a “divide and conquer” strategy on that property, which should have been protected for Historic reasons. Google CityWatch writer Eric Preven's coverage of Sportsmen's Lodge...he was all over that scandal. Using Luxury Hotels to house the homeless long-term on our taxpayer dime?? That's scandalous too. It also deprives the City of LA of the much needed HUGE nightly hotel room tax and kills neighboring high-end stores and restaurants that depend on high spending tourists...which then lowers Sales Tax revenue for the City of LA.

I have a solution to the Hotel Strikes in the City of LA, though. Since any hotel developer and/or owner with half a brain would set up shop outside of the City (but still within the County), the City should let ALL Hotel operators pocket the Nightly Hotel Room Tax forever. That way, our local politicians can subsidize the hotel union that owns them with our basic services revenue. I do STRONGLY disagree with one apparent Union demand...to force hotels to back a proposal to fill empty rooms with homeless people. That is SUCH a ridiculous overreach...the hotels filed a complaint with the NLRB over that demand. Susan Shelley over at the LA Daily News is All Over That in her newest column. Tell me which tourists are gonna pay a small fortune to stay at a Hotel that is half full of homeless people. As Shelley states: “[On March 5th], voters in the City of LA will [vote on] the “Responsible Hotel Ordinance,”...that would require hotel operators to report to the City, every day, the number of vacant rooms in their property so the City can send homeless people over to the Hotels to stay in the rooms that night.” And the Hotel Union, as one of its many strike demands, has the audacity to apparently demand that the hotels support that ridiculous ballot measure that would do horrendous financial damage to them...GTFOOH. Tourists would stop coming and these Luxury Hotels would turn into 100% homeless housing on our taxpayer dime, but the Union doesn't care.

And Susan Shelley goes on to tell us about the Cherry on Top of the Union Demand Sundae, the Coup de Grace: “...the Union is ALSO demanding a 7% tax on guests of unionized hotels, which...[would] fund affordable housing for hotel WORKERS.” WOW.

One more strike off the top of my head: UPS Teamsters may go on strike very soon, so you might want to use FedEx or USPS instead.

If I did not mention your strike, I sincerely apologize. It's hard to keep up. But, obviously, all these strikes are very bad for an already shaky LA Economy dealing with Biden Inflation.

(“An Angry Angeleno” is the nom de plume of Yuval Kremer, a former ballot candidate for both LA County Supervisor and LA Mayor, and a regular contributor to CityWatchLA.)

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