Amy Kaufman and Chris Lee; Los Angeles Times  February 23, 2013

The famous ones spend nearly half a year pressing the flesh with Academy Awards voters and traipsing endless red carpets, enduring interminable panel discussions and fly-by-night awards ceremonies, making nice with grumpy reporters in vainglorious pursuit of the coveted little gold man. And yet come Sunday at the Dolby Theatre, four out of five nominees in the directing and marquee acting categories will go home empty-handed — a startling ratio of failure to success.

But none of them really loses. Each will score an “Everybody Wins at the Oscars” gift basket worth just less than $48,000.

Sealed With A Gift. Stuff We All Get. SWAG. The celebrity acquisition of expensive goods and luxury services in exchange for an implicit endorsement has become an entrenched tradition during awards season. In the week leading up to the Oscars, dozens of swag suites pop up around Hollywood in the hopes of attracting nominees, although most often they bring out reality stars and hangers-on looking to score a coffee maker or pair of designer sunglasses.

But in an era when social media exposure has changed the freebie playing field and the stigma associated with reaping the gratis gifts can prove a liability to a star’s popularity, when increased tax scrutiny has substantially deflated swag bags’ net values and reality stars have diluted the power of the swag marketplace, the rules of celebrity gifting in Hollywood have been fundamentally rewritten.

Not only are the companies included in the package giving away things for free, they’re even paying big bucks for the right to do so at a time when profiteering from swag is hardly a sure bet. Distinctive Assets, the marketing firm that puts together the gift, charges brands a minimum of $4,000 — and up to $20,000 — to be included in the basket.

Most A-list movie stars — think Angelina Jolie or George Clooney — wouldn’t be caught dead “swagging.” Not only do many celebrities fear freebie-hoarding blow-back, top stars can get things for free more discreetly.

Moreover, most of the big-ticket items in the post-Oscar gift basket aren’t even redeemed. Last year, interior designer Seyie Putsure offered a gift card worth $10,000 toward a design consultation for three rooms in a star’s home. Only Jessica Chastain took her up on it.

In four years of giving away $20,000 African safaris for two, Premier Tours only had one Oscar nominee turn up on the exotic getaway: Marisa Tomei.

“When celebrities do go, we don’t get much publicity because many refuse to take pictures,” said Julian Harrison, president of the Philadelphia-based travel company. “If they don’t go, we don’t have to front the cost, but we’ve still gotten the media value out of it.”

The tax implications certainly aren’t helping. In 2007, the Internal Revenue Service forced the Academy of Motion Picture Arts and Sciences and the Hollywood Foreign Press Assn. to pay back taxes on the lavish gift baskets the groups had given to Oscars and Golden Globes attendees. (Neither organization has given out a pricey package post-telecast since the crackdown.) The IRS requires the recipients of swag bags to declare anything they receive as income, because the gifts come in exchange for attending an event and are not simply given out of generosity.

Despite the financial risks, many brands still spend their entire annual marketing budget at a swag suite in the hope of finding just one influential person to embraces their product.

“I’m not pleased about paying $3,000 to be here, but that’s the cost of doing business,” said Megumi Hosogai, who was at Kathy Duliakas’ Celebrity Oscar Suite & Party giving away sunglasses specially designed not to touch wearers’ cheeks (so as not to ruin makeup). “This is literally my last dime. It would be better if my glasses were going on Jennifer Lawrence instead of Christina Milian, but you get what you pay for, and I don’t have the money to get my glasses on A-listers.”

This week, suites were held everywhere from ritzy Beverly Hills hotels to Hollywood’s Taglyan Complex, a “cultural center” adjacent to a church and modeled after a European villa. There were plenty of free facials, age-defying creams and cheap-looking jewelry. Some suites featured more risqué fare. At Duliakas’ lounge, an aesthetician displayed silicone breast implants to showcase the business’ services. At the Red Carpet Celebrity Retreat at the SLS Hotel, the makers of the FixSation — a vibrator attached to a skimpy pair of lace panties — were hopeful Chelsea Handler would stop by.

“She probably wouldn’t be offended; she’s a great candidate,” creator Tiffany York said of Handler. “For reality stars — this is nothing compared to what they’re used to.”

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