Explaining Southern California's economy

Could a condom ballot measure drive the porn business into bankruptcy?

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Robyn Beck/AFP/Getty Images

An empty condom package rests on a table during the shooting of a porn scene for the adult film production company Vivid, 18 May 2004, on the set in Canoga Park, California, about 40 miles west of Los Angeles.

UPDATE: Last year at Minyanville, Susannah Breslin explored allegations that the porn business, contrary to popular belief, is actually a terrible business that barely rises to the description.

Earlier today, my colleague Tony Pierce posted on the LA City Attorney office's lawsuit against a proposed ballot measure for June 2012 that would require all male porn actors on sets in Los Angeles to wear condoms in order for productions to be permitted. The measure is supported by the AIDS Healthcare Foundation, which has been advocating to take this issue to the voters for a while:

The foundation was only required to get 41,000 signatures to get the measure on the ballot. They gathered approximately 71,000. [AHF Executive Director] Michael Weinstein said they had no trouble getting enough people to sign the petition.

"It was not difficult at all," Weinstein said. "The overwhelming majority of people - liberal and conservative, of all ages and genders - understand this issue as an issue of fairness and worker protection."

Carmen Trutanich, the LA City Attorney, argues that the measure would be a waste of money for taxpayers. This is from the LA Daily News:

Calling the initiative a "needless and wasteful expenditure of public resources," the lawsuit asks the court to immediately relieve the City Clerk from preparing the ballot measure.

Assistant City Attorney Valerie Flores said the city is likely to face a costly lawsuit from the pornography industry if the measure becomes law. She said the City Attorney's Office wanted to get legal clarification from the courts about whether the city had the authority to enforce the measure, but insisted the suit does not necessarily mean Trutanich opposes the substance of the proposal.

"The only purpose of the lawsuit was to get judicial clarity about whether the city has jurisdiction to enforce Cal/OSHA state standards," Flores said. "We want to do that before we expend any taxpayer funds to enact or put the measure on the ballot. We are not anti-condoms on adult film sets."

Trutanich is, intentionally or not, allying himself with the Free Speech Coalition, which until this April operated a testing facility called the Adult Industry Medical Healthcare clinic. The AHF questioned whether this was anything more than a front to convince LA county and state authorities that the industry was policing itself — and successfully joined in a lawsuit to challenge the clinic on privacy grounds.

There are some interesting real business issues flying around here. I delved into this earlier in the year, when the debate on the ballot measure and safety in the porn industry was first gaining momentum:

To be honest, it's hard to tell who's really right here. Common sense suggests that not requiring condoms is indeed hideously irresponsible, but you can't discount a certain economic reality, which is that the porn business seems to have been in a near-constant state of disruption since the heyday of "Deep Throat," when porn showed that it could make serious money. 

What's raised the complexity factor is the impact of the Great Recession. Porn was once thought to be recession-proof. But as the MSNBC story I've cited above indicates, the last downturn has challenged that received wisdom. Porn may have been with us forever -- and will probably be with us forever. But the porn business? That could be another story.

Here's how the two sides compare. The AHF figures that the porn industry is endangering its workforce through lax testing procedures. Meanwhile, LA county and the state are fighting over who has the jurisdiction to monitor porn safety. But the porn industry insists that if it's forced to require condoms, non-condom production will go "underground" or head out of state. 

It's not clear that Trutanich wants the state/county issue to be resolved, despite what his office has said. LA Weekly has been covering the story and in this post quotes FSC's Jeffrey Douglas insisting that the state can't enforce the condom-use laws, at the federal level, that are already on the books (sort of — the requirement isn't terribly specific). But as our KPCC story notes, the county isn't really willing to take up the slack.

(Both Weinstein and Douglas went on "The Patt Morrison Show" today to present their respective cases.)

What Trutanich may be trying to do is prevent the city, which could face a $200 million budget shortfall next year, from fending off a lawsuit from the porn industry in response to the ballot measure — a lawsuit that the porn industry doesn't want to spend money on. 

That's right. Trutanich could be trying to simultaneously save the city and the struggling porn industry by alleging that the City Attorney's office is just trying to clear up a state/county dispute that isn't going to get cleared up. 

Some impressive lawyering there!

It's easy to see why this would make the AHF unhappy. Again, the LA Daily News:

Trutanich's actions enraged Michael Weinstein..."This is a conspiracy to deprive the voters of their constitutional right to decide this issue," he said, accusing the city of bowing to pressure from the adult industry.

The difficulty here really boils down to whose economics you believe. When I blogged about this before, I discovered that the real revenues in porn these days appear to be coming from "tamer fare" marketed to hotel pay-per-view, cable, and satellite broadcasts. Condoms wouldn't a problem in this context — and would give lie to the notion that strict condom requirements would send production into dangerous sub-basements and nearby Nevada. 

However, if the mighty California porn business (everything, not just the movies) isn't as mighty as everyone commonly thinks — that it's only anecdotally a $13 billion business that should really be a $30 billion business — and is rapidly selling a commodity product (smut) and seeing profits steadily eroded and growth stalling...well, then it needs all the help it can get.

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