Injustice at the Oscars: The controversies that Hollywood doesn't want you to hear about

While movie stars celebrate the year in film, industry workers are struggling to get by. Here's what's at stake

Published March 2, 2014 11:59AM (EST)

  (AP/Amy Sancetta)
(AP/Amy Sancetta)

As you watch movie stars approach the Dolby Theater for the 86th Academy Awards tonight, check out the imposing façade of the legendary Roosevelt Hotel nearby. That’s where the first Oscar banquet occurred in 1929, when Louis B. Mayer of Metro-Goldwyn Mayer established this affair, ostensibly as a way to unite the warring factions of Hollywood. What he really wanted, however, was to persuade the actors, directors, technicians and writers to do what he desired. “I found that the best way to handle [filmmakers] was to hang medals all over them," Mayer said of the awards. "[Then] they'd kill to produce what I wanted.”

The Russian-born mogul abhorred unions, and he believed that his prizes and his club, the Academy of Motion Picture Arts and Sciences, would thwart any budding labor effort. He was wrong, of course, as today, dozens of labor groups try to hold their own with the studio conglomerates. In fact, the real action at the Oscar’s will be off camera, a few blocks away at Hollywood & Vine, where the people who work in the industry will protest their treatment by those who run the industry.

First in line will be the low-level security guards who earn a paltry income, without benefits, to guard the stage doors so the stars can be safe. Many of these guards earn so little that they depend on food pantries and public services to provide for their families. They plan to demonstrate Sunday afternoon for better wages.

Next up are the members of the Writers Guild of America, who will watch the ceremony from their living rooms in Brentwood, Venice and Santa Monica, amazed that the studios have suggested that they should actually give back money in order get a new contract.

Finally, there are the visual effects (VFX) artists , hundreds of whom plan to march Sunday from 1 p.m. to 3 p.m. to protest the tax dollars being doled out to producers who move their film sets to the highest-bidding countries. This practice has devastated large swaths of workers, while benefitting producers.

All this scrimping on labor costs is happening at a time of unprecedented mogul riches, when all entertainment revenues worldwide are slated to top $2 trillion in two years. Indeed, there’s so much money circulating around town, you’d think that industry workers would be rolling in dough. At the Santa Barbara Film Festival recently, there were lavish parties and tented luncheons that resembled something from a D.W. Griffith movie set.

Veteran producers were agog at the money studios were spending to promote their Oscar contenders. Take "Inside Llewyn Davis," for example: Every member of every creative guild received not just the DVD of the film to view, but the script to read and the songbook to sing. In some cases, these packages were sent separately, via overnight deliveries that required signatures. All this for a film that was basically locked out of January's Oscar nominations.

“Do you know how expensive that is?” one director asked me incredulously. No, I don’t, I answered, in between sips of pinot noir.

But I took it as a good sign. Surely some of the $26 million that the Academy of Motion Picture Arts & Sciences was spending to celebrate itself would trickle down, right?

Not quite.

Sunday’s peaceful marches won’t be allowed anywhere near the red carpet, said Tom Seltz, co-president of the security firm that the Academy hired to safeguard its big event. “L.A. will be on a lock-down mode,” he told me. His firm, Security Industry Specialists (SIS), has hired 700 off-duty Los Angeles Police Department officers to work three shifts over the weekend. The uniforms will earn time-and-a-half, plus insurance and police pension costs, so their wages will approximate $100 an hour, or about $1.7 million.

That’s a far cry from the money that lower-caste security guards collect for similar SIS work—about $15 an hour, according to one guard. Seltz wasn’t sure how many low-level guards will work this weekend, or exactly how much they’ll earn: “We subcontract out the low-level guys,” he explained. But they’ll remain on duty until the wee hours of Sunday morning, when the last of the 1,500 revelers leave the Academy's Governor’s Ball, the crumbs of a chocolate dessert still clinging to their chins. Some SIS workers claim they receive insufficient training for the dangerous work they perform.

In a page on their website, SIS disputes such claims and Seltz himself tells me, “We can show that they (workers) aren’t telling the truth. Give me specific claims and I can knock ‘em down.” If he sounds upset, it’s because the guards are staging a protest Sunday afternoon with the Service Employees International Union. (The SEIU has been trying for years to organize SIS employees, who also guard Amazon warehouses and Google’s headquarters.) Some SIS security employees in California have also joined a class action to sue their employer for the recovery of unpaid wages and compensation for missed meals and rest periods. Employees say that the firm limits workers to only part-time work. “That means a worker who earns $15 an hour, for 20 hours a week, is collecting $15,600 a year,” said Jacob Hay, a spokesperson for SEIU United Service Workers West.

* * *

Los Angeles has a history of supporting labor unions. In 1990, L.A.’s janitors asked the SEIU to help them organize for better wages, which had been as low as $4.50 an hour. About 400 striking janitors held a peaceful demonstration in Century City, but they quickly found themselves facing fifty baton-wielding police officers. About 36 marchers were wounded and arrested in that ugly incident, which appalled the city.

So when janitors hit the streets again a decade later, they were joined by 2,500 construction workers and shopkeepers. The entire crowd was cheered on by honking motorists. Even then, people were angry at how corporate CEOs paid themselves millions while giving little to those who cleaned up after them. The drama concluded with janitors getting a union contract, wage increases and health coverage. The entire tale produced similar victories in Houston, Miami and other cities as well as a major motion picture, "Bread and Roses," by Ken Loach.

Stories of L.A. underdogs make great movies, and these days good scripts have never been more valuable. This is an era when series based on comics ("Iron Man") and young adult fiction ("Twilight") can explode into billion-dollar franchises. That’s why studios have gone to such extreme lengths to guard screenplays as if they were nuclear bombs: You may find, for example, digital watermarks on scripts that are designed to prevent theft or leaks. There are NSA-style clearance protocols for script readers, and locked doors leading to inner chambers where, on a bare table, sits the only copy of a dog-eared script.

So when WGA members sat down recently to negotiate a new contract with the Alliance of Motion Picture and Television Producers (AMPTP), they expected to be greeted nicely. Instead, the AMPTP opened talks by seeking cuts in writers’ pay. It proposed $60 million in “rollbacks” from the union’s health and pension plans, and reduced pay rates for screenplays and TV residuals. This was galling, since it arrived at a time when the combined profits of the six biggest negotiators (Disney, DBS, Comcast, Fox, Time Warner and Viacom) hit a record $40 billion in total profits.

As one union member told me, “it just goes to show you little they thing of us job creators.”

The writers want a 3-percent wage increase each year during the life of a three-year contract. They wanted increased residuals, and, for the first time, minimum wages to create high-budget new media entertainment made for video-on-demand productions like Netflix’s "House of Cards." Now, two days after the janitors sweep up the trash from the Dolby Theater, talks are scheduled to resume. The writers have until May 1, when their three-year contract expires.

* * *

Meanwhile (and despite the aforementioned record profits), it seems that less moviemaking is actually happening in Hollywood. According to a new report from Los Angeles County Economic Development Corp., the entertainment industry in Los Angeles County has lost more than 9,000 jobs since the financial crash. The county still ranks as the nation’s leader in creativity -- as measured by jobs in fashion, architecture, digital media, and entertainment -- but payrolls have slipped. Work is being lured out of state to Georgia, Oregon and New Mexico; and some of the industry’s biggest franchises ("Star Wars" and "Avatar") have gone offshore to Britain or New Zealand, which dangle lucrative “tax incentives” to producers who move their sets to their shores.

“That’s why visual effects people [can] hardly work in L.A. anymore,” said technical director Daniel Lay. Lay has worked at Sony Pictures Imageworks and other VFX houses over the course of his career, but has recently watched his jobs disappear as facilities shrink or move offshore. One boss told him that he had to move to Vancouver if he wanted to keep his job on a $10 million project. Why? Because the producer of a big budget film was getting 60 percent of the film’s labor costs returned to him in the form of a $6 million Canadian “rebate.”

Visual effects shop owners throughout the industry have moved their families to Vancouver, along with their key employees and their families. They set up new headquarters, find new homes and schools for the kids, then hire lawyers and human resource specialists to keep track of the complicated subsidies. “It’s a significant cost to these facilities and it doesn’t always give them more work,” said Lay. Lately, Montreal has started offering big rebates and luring VFX firms out of Vancouver -- the result being that American craftspeople move like gypsies from one foreign camp to another, just to keep plying their trade.

The studios and their lobbyists say that the tax incentives create jobs for the states and countries that host their films. The U.K. doled out an estimated $1.2 billion in rebates over the last five years, bringing workers to London, one of the most expensive cities in the world. Meanwhile, film tax incentives in Kansas, Missouri, Wisconsin and Connecticut have been curtailed or eliminated because job gains haven’t panned out. Many critics call these programs “corporate welfare.”

Then there is the whiff of scandal that trails these programs. The most riveting example reads like a scene from "American Hustle." California State Senator Ronald Calderon has long been a Sacramento powerhouse, the man who helped push through a state bill that funded film tax credits, and the head of the California Film Commission. Now, he’s been ensnared in an FBI sting.

The story goes that a mogul named Rocky Patel asked Calderon to expand California tax credits for independent films. Rocky claimed to be chief of United Pacific Studios, a film company in the arts district of downtown Los Angeles, and the parties met there, in a nondescript industrial building. It had cavernous spaces for B-film productions and TV shows, rooms big enough to build sets that resembled a classroom, a precinct, a hull or a sting.

According to an affidavit obtained by Al Jezeera, Rocky Patel was joined by two agents, one masquerading as his girlfriend and another as an investor. Calderon agreed to help them by lowering the floor for qualifying productions from $1 million to $750,000. In return, he allegedly accepted trips to Las Vegas, gourmet meals and $60,000 in cash.

Calderon never delivered on his alleged promise, but he may be heading to prison.

Last fall, A Daily News/New York Public Interest Research Group investigation found that New York's film and television industry has lavished Albany politicians with more than $900,000 in campaign donations since 2010. Gov. Andrew Cuomo has raked in the largest haul, taking $219,000 from the industry while pushing to expand a production tax credit program to cover shows that relocated to New York, such as Jimmy Fallon's “The Tonight Show.” So while Hollywood leaders have plenty of cash to throw at governors and lawmakers, they apparently can’t find a silver dollar for the rank and file.

Of course, you won’t hear about any of this as you watch tonight’s spectacle of the Oscars. But as the camera pans the marble pillars of Babylon Court and the patrician bones of the Roosevelt Hotel, remember that in 1929, when the Academy Awards began, workers were agitating for better working conditions, too. Somehow, in the depths of the Great Depression, they managed to organize themselves so they could deal fair and square with the moguls. Today, the industry is bigger and the workers a wee more sophisticated, but some traditions remain. Given the machinations behind this year’s Academy Awards, I’ll bet that even Louis B. Mayer would be impressed.

By Kathleen Sharp

Kathleen Sharp reports on business and entertainment from Southern California.

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