What’s the Story Behind Those Oscar Swag Bags?

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Winning an Oscar seems like it’s pretty dang awesome. Just ask the producers of La La Land after their win for Best Picture!—or the producers of Moonlight after their win for Best Picture!

Here’s the thing though, even folks who lose at the Oscars get a pretty fantastic consolation prize: a gift bag. And this isn’t the kind of normal gift bag that normal folks like us are used to.

This gift bag is lit.

Unlike in previous years, this year’s “Everyone’s A Winner” swag bag doesn’t come with an official price tag, but total value of the items included is definitely well over $100,000.

The bag includes a luxury 6-day Hawaiian vacation, personal in-house sommelier services, advanced dual-layer pillows from Casper (@Casper), personal training sessions, a Haze (@HazeVape) Dual V3 Vaporizer, and an Oomi (@OomiHome) Smart Home system.

The gift bags are given to all the nominees in the four acting categories as well as all the nominees for Best Director. As consolation prizes go, it’s pretty much the tops.


A quick history of swag

The Oscars started handing out gift baskets to their acting nominees in the 1970s. But the gifts were small and not particularly show-stopping. That changed in 2001 when the Academy of Motion Picture Arts and Sciences (AMPAS) starting handing out “swag bags” that were truly worthy of the name. The gifts were no longer quite so small. Or at least, the price tags weren’t. In 2002, the gift bag had a total value of $20,000.1

And then, in 2006, the IRS came a-knocking.

You see, the items in these swag bags are taxable as income. While the IRS wasn’t going to go sniffing around a bunch of small-time gift baskets, these high-priced ones were too big to be ignored.

So they stepped in and brought down the hammer. Anyone who had received a gift bag before 2006 was exempted, but those who got one in 2006 received a pretty hefty tax bill.

That was the last year the AMPAS handed out gift bags, leaving the door open for an outside company to take their place—and the accompanying spotlight

Enter Distinctive Assets.

Masters of the swag-iverse

Launched by founder Lash Fary in 1999, Distinctive Assets (@DAssets) is a Los Angeles-based niche marketing company. When the AMPAS stopped offering gift baskets, Distinctive Assets stepped in to fill the void.

The company had already been awarding swag bags to nominees in select categories for years, but once the AMPAS stopped offering their own bags, the bags offered by Distinctive Assets became the bags associated with the ceremony.

“We launched the concept backstage at GRAMMYs and American Music Awards 18 years ago,” said Fary. “The win/win concept was immediately popular with talent, show producers, media and brands. We went on to work with nearly every major award show and created a platform for celebrity/brand marketing that now transcends awards shows.”

And over the years, those bags have really become something to behold. By 2016, the items and gifts offered in the bag topped $200,000.

In addition to the Oscars, Distinctive Assets also does yearly swag bags honoring the Grammy’s. The official name for the bag they handed out to Oscar nominees this year was “The 15th Annual “Everyone Wins” Nominee Gift Bags Celebrating Hollywood’s Biggest Night.”

You’ll notice a word missing from there and it’s “Oscars.” That’s because the AMPAS sued Distinctive Assets following the 2016 ceremony, claiming trademark infringement.

The suit was settled amicably between the two parties in April of last year. In a press release announcing the settlement, Distinctive Assets stated that they would “not use the Academy’s trademarks in the names, tag lines, descriptions or hashtags associated with its gift bags but will continue to accurately state that its gift bags are given to Oscar nominees.”

“My company’s so-called ‘swag bag’ is no more officially sanctioned by the Academy than the gowns and jewels given to nominees to wear on the Oscar red carpet,” said Fary in the press release. “It is simply one of dozens of promotions, parties and gift suites that happen throughout Los Angeles to celebrate Hollywood’s biggest night.”

So all’s well that ends well. Right? But what about the products that get featured? How does it work out for the companies that make them?

Turns out that it works out pretty great for them too, but maybe not for the reasons you expect.

A great opportunity – if you work for it

Yuri Cataldo (@YCataldo) is a marketing and branding expert whose bottled water company, IndieH2O (@Indigoh2O), has been featured in many different swag bags for the MTV VMA’s, The Emmy’s, The Golden Globes, and The Oscars.

“The biggest benefit to being in gift bags is the marketing opportunity,” said Cataldo.  “The best way to get free press is to have a reason why the media should write about your company and the prestige of award shows is an easy way to get a story.”

However, Cataldo is not so big on the idea that you should get involved with a swag bag purely to ride off the celebrity endorsements itself. “Almost none of the celebrities will pay for your product or take a photo after so make sure your main goal isn’t getting lots of sales from celebrities.”

Cataldo advises business owners that, “Once you chose to go into an award show bag plan out your marketing strategy as soon as possible and start contacting the press because once the award show is over they won’t care.”

He also warns that some gift basket opportunities out there might not be legit, telling business owners to “Do your research and know why you want to have your product in an award show event.  There are no official gift bags from these events and anyone who tells you otherwise is trying to scam you.”

Love live the swag

So that’s the story behind those crazy awesome gifts baskets! They’re a pretty fantastic perk for nominees in the acting and directing categories – and nowadays even the tax obligations can be pretty light depending on which products the nominees actually use.

“Only the fair market value of actual goods and services received are taxable,” said Fary. “In the case of gift certificates and other “gift offers” there is no value to the celebrity unless they actually redeem a gift certificate.”

He added that “96% of the gift bag’s value falls in the category of gift certificates or “gift offers” so the actual bottom line taxable consequence is very small and for most people inconsequential.”

Plus, the bags aren’t just entirely filled with gadgets, vacations and expensive food and wine. According to Fary, “the most redeemed item in the history of our “Everyone Wins” gift bags for top nominees has been the option from Halo Purely For Pets to have 10,000 meals donated to an animal shelter of the nominees’ choice.”

Hopefully all those fine folks from La La Land will be able to find something in this year’s basket to make them feel better…

Oh wait. We forgot. These baskets are only handed out to the nominees for acting and directing. Those producers were nominated for Best Picture … which means they won’t be getting one.

Dang. This is really not their week.


About the Contributors:

Yuri Cataldo, is a Yale-trained set/costume designer with over 100 credits in Film, Theatre, and Opera. In 2011 he founded IndigoH2O, the only multiple award winning bottled alkaline water and has been featured at the Oscars, Golden Globes, the Emmy’s, the MTV VMA’s, and in 60+ magazines and articles in the last two years. Yuri is the CEO at the ART TECH MEDIA GROUP where he works with artists and businesses to turn ideas into products and gets a ton of press in the process. His website is YuriCataldo.com

Lash Fary, is founder and president of Distinctive Assets, a Los Angeles-based entertainment marketing and gifting company.  For over fifteen years, Lash has worked with a veritable Who’s Who of Hollywood to introduce products/services to the entertainment industry and to develop celebrity-oriented promotions. Lash’s unique industry positioning and multi-faceted persona have created numerous high-profile opportunities and titles including author, host, entrepreneur, inventor, sultan of swag and gift guru.

References:

1
Framke, Caroline and Pai, Tanya. “The weird, contentious tradition of Oscars gift bags, explained” Vox.com. Accessed on March 1, 2017 from http://www.vox.com/culture/2017/2/22/14688240/oscars-gift-bags-distinctive-assets.

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