THE FX OSCAR : SEEKING ACADEMY RECOGNITION.

Byline: P.J. Huffstutter Daily News Staff Writer

During any other Hollywood elite gathering at the Academy of Motion Picture Arts and Sciences, a curious bystander would spot stars in Armani suits, Versace dresses, Gucci shoes.

But last week at a private film event at the Academy's Samuel Goldwyn Theater the designers of choice are Levi, the Gap and Goodwill.

Their casual attire, however, belies the seriousness of the evening.

``Are you ready to rumble?'' one visual effects coordinator whispers to his companion. ``Think the Academy will finally take us seriously?''

The pair, just two voices among the event's 800-member audience, eagerly watch as the key effects people responsible for seven of this year's flashiest films show snippets of their work. Afterward, the visual effects experts answer the group's questions about techniques and tools.

These men are there to explain their art, to defend their methodology, to rationalize why their science is better, quicker, faster than the competition's. They are there, in essence, to fight for the Oscar.

The reward is more than just a gold statuette. A win can mean millions of dollars in business to a special-effects house.

While they may battle among each other, many people within the visual effects community say the real foe is the Academy, which refuses to recognize their growing importance.

It should, considering how lucrative visual effects films have become. Just look at the box office revenues from some of the film's competing for this year's visual effects Oscar. So far, ``Independence Day'' has grossed $306.1 million domestically; ``Twister,'' $241.7 million; ``Mission: Impossible,'' $180.9 million; and ``The Nutty Professor,'' $128.7 million.

All four movies were in the 1996 list of top-five box office hits.

This year's other visual effects Oscar nomination candidates include ``Dragonheart,'' ``Mars Attacks!'' and ``Star Trek: First Contact.'' The Academy will announce Tuesday which three films earned the nomination.

Visual effects also fundamentally alter the storytelling process. When Steven Spielberg decided to produce a movie about tornadoes, he approached Industrial Light & Magic in 1994 to see if computer technology could spin out a natural disaster.

``There was nothing to work off of except the question of whether we could make real-looking tornadoes,'' said Stefen Fangmeier, an ILM visual effects supervisor who headed the effects team in ``Twister.''

``We got some rough sketches of what was possible. That was good enough. They started shooting in May 1995.''

Directors like Spielberg understand that few movie fans slap down $7.50 to see a movie with great sound or superb art direction or fantastic costume designs.

But they will pay to see visual effects, to watch aliens fly or a dragon talk or a tornado wreak havoc on a small Midwestern town.

When you track the top grossing movies of all time, one thing becomes very clear. The visual effects community is making Hollywood a whole lot of money.

Yet those responsible for this creative shift say the film industry undervalues them, especially when it comes to awards.

One of the most coveted prizes in the United States is the Oscar for visual effects. The Golden Globes doesn't offer an award. Neither do the American Society of Cinematographers nor the People's Choice Awards.

Not even the Academy's own technical achievement awards - the ones you never see on TV - touch this arena.

Those in the visual effects field insist the award system is flawed: Too few films recognized and too few houses dominate the awards. Only three films receive nominations, compared with five in the equally technical field of sound.

The Academy of Motion Picture Arts and Sciences defends its procedures, insisting the prestige of the award rests in its rarity.

``We are the Academy. The awards mean something. You can't have an award for every little thing,'' said Rich Miller, awards administration director for the Academy. ``The creation of the visual effects branch (in 1995-1996) is proof the Academy takes this field seriously.''

In the past, voting for visual-effects nominations rested in the hands of members of other Academy branches. Effects-heavy films were often overlooked or ignored. Branch status now allows the visual effects committee - people who work in the field - to guarantee that at least three films will be annually recognized.

``I know visual effects are important for making films, and I know that technology is important for doing effects,'' Fangmeier said.

``But there's still a lot of people who don't realize that.''

That apparently includes many of those in the Academy. Out of the 248 films released in 1996, only three will make the cut for a visual effects Oscar nomination. Of the dozens of effects houses and thousands of crew members who worked on these three films, only four people per film have a chance to take home the golden statuette.

It's not about money, insist visual-effects people. It's a matter of respect, of recognizing their contribution to the industry, of their importance in films where even the most famous human actors hold less box office appeal than digital wizardly.

Getting into the special-effects Oscar race isn't cheap, though. Films with smaller budgets may win for best picture but never for best visual effects.

``You have to be an $80 million or $100 million picture to compete for this award. That's all there is to it,'' said Larry Franco, producer of ``Mars Attacks!'' - one of the films being considered for an Oscar nomination. ``It's not going to go to `Highlander 14.' If the financial support isn't there, you're never going to get the nod.''

An Oscar win can change Hollywood's opinion of an effects house's capabilities. When staff at Rhythm & Hues won the award in 1995 for their work on ``Babe,'' the 10-year-old Culver City company known for its commercials found itself in the hub of a Hollywood buzz.

``I think us winning shocked a lot of people because everyone's so used to ILM winning all of the awards,'' said Rose Duignan, marketing director for the effects house. ``We've always been an aggressive company. Now, we're able to be aggressive on bigger projects, which leads to bigger budgets and more challenging work - which can lead to more awards.''

Rhythm & Hues' current project list includes creating computer-generated images for the DreamWorks film ``Mouse Hunt.''

Though smaller houses often contribute to big-budget blockbusters, the Academy's winner circle remains frustratingly elusive for many people working outside the big effects establishments.

When Paramount Studios decided to make ``Star Trek: First Contact,'' the film's producers approached ILM and asked them to create and manipulate authentic-looking aliens. They also tapped the talents of Pacific Ocean Post Film to handle computer-generated animation work, Matte World to create matte paintings and Illusion Arts to help out with various digital and miniatures work.

When choosing candidates for the Oscar nomination, however, the film's producers sided predominantly with ILM staff.

``I could hand (the committee) a list of 30 names,'' said Rick Berman, producer of ``Star Trek: First Contact.''

``There's lots of injustices with this award because you're forced to name names. It's a terrible decision. Every year, there are bitter feelings about it.''

The trend continues this year as two visual effects supervisors publicly complained after their names were left off the ballot.

``First Contact'' producers had named Todd Masters among the four people nominated for the award. But the Academy's visual effects branch executive committee decided to exclude Masters, insisting that his role as ``Borg effects supervisor'' was mostly work in makeup and costuming.

Last month, Twentieth Century Fox ran Oscar-pleading ``for your consideration'' advertisements for ``Independence Day'' and listed Tricia Ashford as the project's digital visual effects supervisor-producer.

But Ashford did not make the Oscar cut. ``Independence Day'' producers omitted her name from the list because, according to a group spokesman, the Academy rules cap the nominee limit to four people per film. The rules also prohibit producers - in any capacity - from being nominated for the award.

Richard Edlund, chairman of the Academy's visual effects branch executive committee, admits the nomination system has its flaws and recently told Daily Variety the branch is ``going through growing pains.''

He declined to comment further.

``Independence Day'' producer Dean Devlin insists the process is unjust.

``All five people should be up for that award,'' Devlin said. ``But when we talked to the Academy about this, the response we got was, shut up, you should be happy we let you name four people. We could always limit it to just one name.''

CAPTION(S):

14 Photos

Photo: (1-Color) INDEPENDENCE DAY

``We didn't get any military support on the airplanes, because we used Area 51 in the script. Only the crop duster was real. All the other planes and aircraft are fake. They're computer-generated image shots.''

(2) Volker Engel, co-visual effects supervisor

(3--Color) MISSION: IMPOSSIBLE

``There are no real trains. There are no real helicopters. This is one of the first uses of a purely digital sets built for a specific actor and used in a feature film.''

(4) John Knoll, visual effects supervisor

(5--Color) DRAGONHEART

``This is the most complicated computer creature ever brought to life on the big screen. (The dragon) would deal with emotional issues. Doing that with a digital creature is incredibly difficult.''

(6) Scott Squires, visual effects supervisor

(7--Color)THE NUTTY PROFESSOR

``We used everything you can think of to allow Eddie (Murphy) to play seven multiple roles in the same scene. We had to design a very elaborate system to shoot these dinner table scenes.''

(8) Jon Farhat, visual effects supervisor

(9) TWISTER

``All that blond hair and gold corn silk blowing in the wind was really difficult to work with. We would put the tornado behind the actors, then have to go back and put the hair or stalks back in frame by frame.''

(10)Stefen Fangmeier, visual effects supervisor

(11--Color)MARS ATTACKS!

``The emphasis was on creating a `cartoon realism,' and confronted 1950s imagery with contemporary tools. We spent a great deal of time relighting the shots.'' (12) Michael Fink, senior visual effects supervisor

(13--Color) STAR TREK: FIRST CONTACT

``Things couldn't look exactly like the older films or the TV series. You try to figure out a new look for a transporter, one that will impress the fans.''

(14) George Murphy, assistant visual effects supervisor