EXPERTS: CITY CAN HANDLE THE CUTS.

Byline: BRENT HOPKINS Staff Writer

Los Angeles' diversified economy should be able to absorb NBC Universal's decision Thursday to sharply cut staffing and spending in its news and entertainment divisions, economic experts said Thursday.

With aerospace a shell of its former self, the entertainment industry has become one of the San Fernando Valley's most crucial employment sectors.

Thus, the the decision by Burbank's NBC Universal to cut 700 jobs throughout its vast empire gave pause to the region's business watchers.

Coupled with corporate cutbacks in the past year at the Walt Disney Co. and Warner Bros., also Burbank-based, the usually stalwart economic component has shown unwanted tumult in the past year, setting up potentially broad-reaching consequences.

``For every dollar spent on employment in the entertainment industry, it multiplies out three times,'' said Thom Davis, business representative for IATSE Local 80, which represents Hollywood behind-the-scenes workers.

``Hotels, hardware stores, restaurants, all the way to the local dry cleaners, you name it. I don't know if people really have a grasp of just how much this industry means to the area.''

Countywide, entertainment accounted for 130,000 jobs, 3.5 percent of total employment in August, which the UCLA Anderson Forecast calls ``a small, but important percent.''

In the Valley, it creates one out of every seven private sector jobs and a quarter of its total payroll, according to the most recent analysis from California State University, Northridge's Economic Research Center.

Broadcasting's jobs are particularly lucrative, with its 3,000 positions paying average wages of $124,000 annually. While the loss of that buying power would definitely be felt, CSUN economics professor Daniel Blake said he didn't fear the same type of effect as the layoffs of the early 1990s. ``It's not like a manufacturing company closing a plant or laying off a shift, where it affects all the suppliers and maintenance people,'' Blake said. ``It's not devastating at all. If there's net staff reduction, (the loss) would just be the expenditure of their incomes.''

Those jobs could be absorbed within the myriad production companies throughout the area.

Roberto Barragan, president of the Van Nuys-based Valley Economic Development Center, noted that unlike the manufacturers who left the state a decade ago, entertainment companies have such deep roots in the community that a worker laid off in Burbank could easily get another job in Studio City or Hollywood. ``The entertainment industry is still very strong here in Los Angeles,'' said Bud Ovrom, now the L.A. deputy mayor of economic development and former Burbank city manager. ``We're sorry for the people who are losing their jobs, but from an economic point of view, this will work out.''

brent.hopkins(at)dailynews.com

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