CORRECTION: Sign Revenue Can’t Help Tourism Woes

TOURISM_PHOTO_LOS FELIZ_JUNE 2016:jpgCORRECTION: In our June 2016 article, “Sign Revenues Can’t Help Tourism Woes,” we indicated that Chris Baumgart, chairman of the Hollywood Sign Trust, said that the trust contracts out the Hollywood Sign’s licensing to a public relations firm. In fact, the trust is not responsible for Hollywood Sign licensing. Instead, the Hollywood Chamber of Commerce manages licensing and contracts it out to a brand licensing firm. We regret the error.

BEACHWOOD CANYON—Whether it is Oscar winners like Argo, action flicks like San Andreas, or late-night talk shows like Jimmy Kimmel Live!, the Hollywood Sign appears frequently on the silver screen, and such films and television shows pay for the right to use the image.

However, it is not the city of Los Angeles who makes money off the sign’s lucrative licensing fees. In fact, the city does not even fully own the Hollywood Sign.

Instead, its ownership is governed by a complicated legal settlement reached in 1992 between the Hollywood Chamber of Commerce and the city.

Under this settlement, the city owns the land the sign sits on, while the chamber owns trademark rights to the sign’s image.

The settlement also created a little known organization called the Hollywood Sign Trust, which is responsible for day-to-day maintenance and preservation of the sign.

The arrangement means that the city does not receive any direct revenue from the Hollywood Sign. Instead, the Hollywood Chamber collects revenue from licensing fees on the sign’s image and is then legally required to direct a portion of this revenue to the trust to cover the sign’s yearly maintenance costs, estimated at between $30,000 and $50,000.

This arrangement has irritated many Beachwood Canyon residents, who live in the shadow of the sign and feel their neighborhood is entitled to at least a portion of the sign’s licensing revenue.

Christine O’Brien, a 35-year resident and local activist, calls the sign arrangement a “pretty rotten deal.” She questions why the chamber is not required to pay a leasing fee for the privilege to make a profit on public land, like other “concessionaries” in Griffith Park.

“We have no idea when they are going to film,” or even “how much revenue the sign generates,” she said.

Beachwood Canyon, an area of about 560 homes, sits directly below the Hollywood sign. In recent years, GPS technology has funneled an unprecedented number of sign seeking tourists into this once hidden residential enclave, creating a variety of public safety and quality of life issues.

Many residents believe revenue from the Hollywood Sign’s licensing should help fund solutions resolving these issues.

However, both the Hollywood Chamber and the Hollywood Sign Trust seem reluctant to get involved in funding such solutions.

Chris Baumgart, the chairman of the Hollywood Sign Trust, said solving Beachwood’s problems sits outside the trust’s “narrowly defined mission” of “preserving, maintaining, and promoting the Hollywood Sign.”

According to Baumgart the trust ensures the sign is structurally sound and is painted and insured. Additionally, the trust pays for a security system at the sign and maintains the official Hollywood Sign website. But, Baumgart said, the trust contracts the sign’s licensing out to a public relations firm.

Baumgart also said the trust’s yearly operating budget is far lower than most people expect.

In 2014, the last year tax filings for the trust are publically available, the trust’s assets were just over $120,000. Expenses were about $58,000.

This relatively small operating budget is another result of the complicated legal arrangement that birthed the trust. In short, at the end of every year, the Hollywood Chamber of Commerce is only required to replenish the trust’s bank account balance to $150,000. The $150,000 threshold remains constant—regardless of how much money the chamber makes from licensing fees.

The arrangement means that the Hollywood Chamber retains control over the vast majority of money made from the Hollywood Sign. Yet, it remains unclear how much money this actually is.

According to Leron Gubler, the president and chief executive officer of the Hollywood Chamber of Commerce, the chamber does not release figures on Hollywood Sign revenue to the public.

Additionally, Gubler said while the chamber is “trying to be cooperative” in working with the city to alleviate Beachwood Canyon’s tourism troubles, solving these issues, he said, “really goes beyond” the chamber’s mission.

The Hollywood Chamber of Commerce is a non-profit, tax-exempt corporation that focuses on promoting the wellbeing of Hollywood business.

Los Angeles City Councilmember David Ryu’s Chief of Staff Sarah Dusseault was installed as a trustee on the trust’s board last year.

Dusseault did not respond to multiple requests for comment for this story.

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1 Response

  1. Outsider 18 says:

    Fine story. No surprise that Ryu’s staff chief that serves on that board did not respond, because this is a conflict of interest. Its impossible to serve two masters. The Chamber makes the money. The Sign attracts millions of tourists that put a small residential neighborhood in a High hazard fire area at high risk, and Ryu continues to lie to residents about the campaign promises that were broken months after he assumed office. Watch out for Ryu. The only thing he does well is change his position after he gets exposed in the press. He then swoops in to try and take credit for change. I.e., the Runyan basketball court . He knew about it for 6 months, only to play dumb until locals threatened a law suit, then he did his 180 to stop the project. Our neighborhood knows first hand that this guy is a liar. He will drop you like a bad habit If what you want is NOT in his best interest. You will see If you and your neighborHOOD really needs help. Just another insider politician in the second most corrupt city government in the US.

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