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With Production Dropping, Why Are the Film Studios Expanding?

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Local film and television production are still in a slump, and the internet, you know, still exists, but three of the major studios have huge development plans in the works--Paramount is planning an enormous expansion and modernization of its Hollywood lot; NBCUniversal is adding production facilities, theme park attractions, and hotels; and Disney has office/production projects in the works both in Glendale and in the Santa Clarita Valley. The New York Times says it "might become the most aggressive growth spurt in recent Hollywood memory," but wonders what the deal is. Here's what the insiders have to say about all this development:

-- "It doesn't make sense," according to former Sony chairman and current Mandalay Entertainment Group CEO Peter Guber.
-- The studios say they're being careful and building in phases: "NBCUniversal's newly approved plan, like Paramount's, is more about having the right to build than about specific expansion."
-- "Each of the projects follows a logic of its own, but they all reflect Hollywood's determination to remain a force here by planning enough physical expansion to contain operations well into the future."
-- "Being in control of your destiny is better than being at the mercy of others," according to Disney's real estate exec.
-- "'We're preparing for the next hundred years' by obtaining approvals for potential future growth," says Paramount's real estate exec of their expansion plans, which cover 25 years.
-- "Ed Duffy, a business agent for Teamsters Local 399, speculated that studios might expect to fill their new space with a flurry of small films, Web productions and reality shows — the sort of thing that normally does not create much work for the Hollywood unions." Still, he "applauded the expansion."
-- NBCUniversal's real estate chief says "We're going to give it everything we have to keep production here."
· Bold Growth Plans at Hollywood Studios [NYT]