NEWS
Posted 19 October, 2008 in CA News
By Jerry Berrios, Staff Writer
Article Last Updated: 10/12/2008 11:46:58 PM PDT
http://www.dailynews.com/business/ci_10706865
The $700 billion bailout plan passed this month gives Hollywood $478 million in tax breaks, which entertainment industry leaders hope will help stem the tide of runaway production.
But experts also say these long-awaited tax breaks need to be combined with state and local incentives in order to actually lure productions back to the Golden State and, particularly, Los Angeles.
“Policymakers just can’t take it for granted and assume that everyone wants to be in Los Angeles,” said Eduardo Martinez, an economist with the Los Angeles County Economic Development Corp. “The recent move of ‘Ugly Betty’ is a good example of that.”
The hit ABC-TV show moved filming this season from Los Angeles to New York, taking advantage of the 35 percent tax credit extended to production companies.
Los Angeles and California offer some tax incentives, but they are nowhere near the levels offered by New York and other locales. And given the budget problems facing California and its local governments, that situation isn’t likely to change any time soon, Martinez said.
In addition to such perks as tax incentives, more than 40 other states are cultivating relationships with the entertainment industry by offering production-related programs at their vocational schools and universities, he said.
Nearly a decade ago, the Screen Actors Guild and the Directors Guild of America estimated that runaway production had a $10.3 billion impact on the U.S. economy. While no official follow-up study has been conducted, officials have complained about production companies fleeing to less- expensive locations such as Vancouver, as well as Ireland, Australia, New Zealand and Eastern Europe.
The Motion Picture Association of America and the Directors Guild of America have been lobbying for federal tax breaks for some time. The incentives were included in a tax-credit extension bill tacked onto the $700 billion bailout.
It allows all production companies to claim a $15 million deduction per movie during the first year of filming. The credit climbs to $20 million if the company films in an economically depressed area.
Previously, the credit applied only to productions with total budgets below $15 million, or $20 million in a poor area.
“It is more of a tool to attract financing for motion pictures projects, which is always a struggle,” said Amy Lemisch, director of the California Film Commission. “Any enticement for that is a good thing.”
Another provision dealing with employee categories and production and distribution partnerships allows the entertainment industry to pay a lower tax rate.
“This puts our industry, which employs 1.5 million Americans, on equal footing under the tax code with other leaders of the U.S. economy and will help keep jobs and film production here in the United States,” Dan Glickman, chairman and chief executive officer of the Motion Picture Association of America, said in a statement.
U.S. Rep. Howard Berman, D-Van Nuys, supported the $15 million deduction, commonly known as the runaway production provision.
“Many foreign countries from Canada to Ireland to New Zealand offer financial incentives to producers to take productions abroad and jobs with them,” said Gene Smith, Berman’s spokeswoman. “This provision is to provide financial incentives to keep those jobs in the United States.”
The nonprofit LAEDC predicts that movie and TV production will employ an average of 151,800 workers a month this year, down from 157,800 in 2007. Martinez attributed the decrease to the 100-day writers strike and the subsequent Screen Actors Guild negotiations with the studios.
The organization does expect employment to rebound to a monthly average of 159,700 in 2009, but only if the studios and SAG agree on a contract and the economy rebounds.
The number of feature films made in Los Angeles has steadily declined since 1996 except for a few anomalies, said Todd Lindgren, vice president of communications for FilmL.A., a private nonprofit organization that processes film permits for the city, county, school districts and other entities.
“That means there are fewer jobs,” he said. “There is less money that is pumped into the local economy.”
But there are new opportunities on the horizon.
Commonwealth Studios is moving ahead with its plans for a $125 million production complex on the outskirts of Moorpark.
Long Beach Studios has announced it will build what it calls the world’s largest independent production complex on the 77-acre site of a defunct Boeing plant it purchased.
And in August, Avenue Six Studios opened a 20,000-square-foot film and TV production studio in Van Nuys with ABC-TV’s “Lost” as one of the first clients.
Last week, Marvel Studios announced that it will film its next four movies - “Iron Man 2,” “Thor,” “The First Avenger: Captain America” and “The Avengers” - at Raleigh Studios in Manhattan Beach.
“We are still the capital of the world for filming and production,” said Martinez, of the LAEDC. “We are always going to have a critical mass compared to the rest of the states, the rest of the country and the rest of the world.”
These latest measures to curb runaway production come as Los Angeles is poised to celebrate its film centennial next year 2009. The city’s first movie “In the Sultan’s Power” was filmed in 1909 in downtown L.A.
“Here we are 100 years later,” FilmL.A.’s Lindgren said. “There is no guarantee that in a 100 hundred years it will be one of the drivers of our local economy.”
Posted 12 October, 2008 in CA News
Please look at the following petition & sign if you agree. It will bring more film business to CA at no cost to taxpayers or the state.
http://www.PetitionOnline.com/SDFILM/petition.html
Posted 27 July, 2008 in CA News
*This from Nikki Fink, deadlinehollywoodda ily.com:
EXCLUSIVE:* Over the weekend, /Iron Man/ director Jon Favreau organized a meeting with Marvel Studios producer Lou D’Esposito, California Film Commission member/producer Stanley Brooks, and actor Tom Arnold with California Governor Arnold Schwarzenegger to talk about the problem of runaway production. During the Saturday lunch at Caffe Roma in
Beverly Hills, Schwarzenegger pledged to reach across the aisle and push for tax break legislation starting this week in Sacramento.. …..Saturday’ s meeting was pushed by Favreau who wants to keep /Iron Man 2/’s $140 million production in Los Angeles. The director’s motivation is personal — the family man has a clause in his contracts saying his shoots must stick close to home. (During the luncheon, Schwarzenegger boasted that, on /Terminator 3,/ he used millions of dollars of his own
money to keep the production in California. People I’ve asked about this say it’s news to them…) Favreau deserves kudos for wanting to leverage his new-found clout for the greater good of the Hollywood community……Here’s one reason why this lobbying effort might succeed where others have failed: I’ve learned that Marvel Studios intends to build a $600 million production facility in the Los Angeles area if the state makes
it worth their while. But during lunch Schwarzenegger explained that the problem isn’t him: it’s the state legislature looking at a $15+ billion budget shortfall…. Since Hurricane Katrina, Louisiana is making a nice living off of hosting Hollywood productions by offering 25% cash rebates or tax credits for all in-state spending on things like equipment rentals, food, hotel rooms, and, at a lower rate, labor. The result is that in
2007 Louisiana had 53 film and television projects that pumped $400 million into the state’s economy. Its program has been so successful that other states have upped their incentive programs to stay competitive. New York recently boosted the showbiz tax credits on below the line expenses for qualified productions to 30% (up from 10%), and Mayor Michael Bloomberg added an extra 5% if a project is made within New York City limits. Unlike about 40 other states, California does not offer a tax credit program to keep Hollywood at home. So the number of film production days shot on location in Los Angeles has plummetted
nearly 40% since 1997, according to FilmL.A. Inc, a non-profit group that handles film permits. What’s at stake? Well, a major production can pump tens of thousands of dollars a day into local economy what with hotel room stays, catering, services and permits. One figure cited is that 3 weeks of filming of /Memoirs Of A Geisha/ generated more than $4 million for Sacramento and El Dorado counties
Posted 18 May, 2008 in CA News
Governor seeks to retain California productions
By ASSOCIATED PRESS
SACRAMENTO — Gov. Arnold Schwarzenegger said Friday that California must increase tax incentives to movie and television studios as a way to keep them from moving their productions out of state.
He said incentives being offered by other states are luring studio projects away and costing California tens of thousands of jobs.
Tax credit proposals have repeatedly failed to clear the Legislature. Legislative spokesmen expressed support for the idea Friday but worried about the lost taxes when California is struggling with a budget deficit Schwarzenegger said could reach $20 billion next year.
The governor’s comments were sparked by ABC Studios’ plans to move production of “Ugly Betty” from Los Angeles to New York.
Studio spokeswoman Charissa Gilmore declined comment Friday, saying no final decision had been made. She also declined comment on whether tax incentives would help keep the production in California.
“What happened was (productions that shifted to other states) didn’t come back to California; they went to Louisiana, they went to Florida, they went New Mexico because they give great tax incentives,” Schwarzenegger said.
New York Gov. David Paterson signed a law last month that triples his state’s film tax credit. Companies can receive a 35% credit if at least three-quarters of their production is filmed in the state.
A series of Assembly speakers, all from Los Angeles, have pushed unsuccessfully for a California tax credit since 1998. They include Assembly Speaker Fabian Nunez, who steps down as speaker next week and is termed out of office after this year, and his successor, Karen Bass.
“If the governor would propose ways to increase revenue to offset the credit, this would be a blockbuster hit in the Legislature,” Nunez spokesman Steven Maviglio said in a statement. “Unfortunately, the governor has never included funding in any of his budgets for the bill and has undermined the bipartisan support the credit has enjoyed by proposing a cuts-only budget.”
Besides New York, Alaska lawmakers last month voted to give state corporate income tax breaks of 30% or more to offset money spent in the state on movie production. Michigan boosted its credit to 42% of production expenses last month.
Massachusetts enacted credits in 2006 and increased them this year. However, a state Dept. of Revenue report last month found the incentives cost the state $138 million in lost tax revenue.
Posted 27 October, 2007 in CA News
http://www.dexigner.com/digital/news-g12469.html
Posted 27 October, 2007 in CA News
L.A. feature filming down but TV’s up
Reality television dominating local production
In a surprise development, studios held back on stockpiling feature films in Los Angeles during the past three months in the face of strike fever but third-quarter TV production stayed sizzling.Third-quarter feature stats showed 1,897 days of off-lot shooting on public property in the Los Angeles area — down 22% from the third quarter of 2006 and off 24% from the previous quarter. It was the slowest third quarter for features in four years, according to permit statistics issued today by the Film L.A. agency.
“We had heard that production should continue to increase as contract talks instensified but we just didn’t see that happen during the third quarter,” Film L.A. president Steve MacDonald said.
But TV production was at the second-highest level ever recorded with 5,950 days, Film L.A. said. That figure represented a 10% gain from the second quarter and trailed only the first-quarter record of 6,478 days.
TV activity has soared in Los Angeles over the past few years, thanks to the growth of cable and reality shows. Film L.A. stats showed a 2% gain in the third quarter, pushed by a 43% hike in pilots and growth in areas such as talk and variety.
Reality TV continued to dominate, edging down 1% to 2,374 days, while TV drama activity declined 12% to 1,852. Sitcoms slid 16% to 504 days.
The figures are one of the few measures of local production activity, although some observers note that the stats capture less than half of the region’s production activity.
Posted 19 October, 2007 in CA News
http://www.film.ca.gov/GreenProject/index.html
Posted 19 October, 2007 in CA News
From the Spartan Daily News (San Jose State University)
CEO donates to art program
DreamWorks executive gives $300,000
By: Jovanni Colisao
Posted: 10/15/07
Jeffrey Katzenberg, chief executive officer of DreamWorks SKG, made a
surprise announcement Thursday afternoon: he will contribute $300,000 to
SJSU’s animation/illustrat ion program. Katzenberg made the announcement
during an event with students and faculty members moderated by President Don
Kassing.
“It’s a wonderful help,” Kassing said. “It reflects on how an industry will
spot universities thathave strong academic departments in areas where they
need talent and we have that here in our animation department.”
Posted 6 October, 2007 in CA News
http://www.burbankleader.com/articles/2007/09/29/politics/gnp-polland28.txt
Posted 6 October, 2007 in CA News
Commercial Production Industry, Labor and State Film Commission Sectors
Offer Testimony
BURBANK, Calif., September 21, 2007, Robert Goldrich — The first public
hearing of the State Assembly Select Committee on the Preservation of
California’s Entertainment Industry was held on Monday (9/17) at the IATSE
Local 80 office in Burbank. It was a session marked by both hope and
skepticism, the former over the committee members’ commitment to stem the
runaway tide of production through an incentives program–and the skepticism
rooted in this being just the latest in a series of seemingly productive
meetings with legislators which in the past has failed to yield any relief
to the flight of filming from the Golden State.
Committee chair and Assemblymember Paul Krekorian (D-Burbank)
acknowledged the frustration felt in the industry over the lack of tangible
incentives to help California at least come close to leveling the playing
field with assorted other states and countries that have put tax credits,
rebates and the like in motion to lure feature, TV and commercial
production.
“Give us another shot,” he told those gathered for the session, offering
a hopeful promise that this time around things will be different. He said
the key to finally attaining success is getting the right message out to
those legislators, particularly in the State Senate, who need convincing.
Krekorian said he understands the argument that financial incentives for
the filming industry shouldn’t be a priority when funding for education,
health care and other services is hard to come by. But the fact is that the
lack of anti-runaway production legislation is forcing good paying, working
middle class jobs out of the state. And the tax revenue that would be
generated by keeping those jobs in California could go a long way towards
helping to bankroll progressive education and social service programs. “How
many more services could we provide today if we had taken the proper action
[to retain the filming business] a decade ago?” Krekorian asked
rhetorically.
“We’d be creating new money to spend on those needs,” concurred
committee member and Assemblyman Anthony Portantino (D-Pasadena) , who
observed that media coverage of filming incentives is skewed, promoting the
misnomer that such measures amount to financial backing for big name celebs
and entertainment “moguls.” Portantino and fellow committee member,
Assemblyman Cameron Smyth (R-Santa Clarita), related that the true
beneficiaries of filming incentives would be the middle class workers whose
livelihoods are in and/or related to this industry.
Committee member and California Assembly majority leader Karen Bass
(D-Los Angeles) noted that Assembly Bill (AB) 1696–which she authored–was
a live wire right up until the 11th hour when both houses were finalizing
the state budget earlier this month. But ultimately the bill–which would
have provided production grants to qualifying features, TV shows and
commercials shot in California– was nixed.
Bass said that she and other legislators will be “back at it in January”
to gain passage for AB 1696 and/or Senate Bill 740. Authored by Sen. Ronald
Calderon (D-Montebello) , SB 740 would institute tax credits for certain
projects (budgeted at up to $75 million) lensed in California, including
theatrical features, TV programs and spots.
Testimony
Assemblymember Krekorian noted that this week’s public hearing wasn’t
designed to define solutions but rather to open up a dialogue with the
industry, discuss the problems being faced and touch upon policy options for
keeping the industry at home. The committee ultimately will come up with its
recommendations- -including presumably incentives legislation- -based in part
on input and feedback received over the course of several hearings.
Among those offering testimony during the Monday session were: Amy
Lemisch, executive director of the <http://www.film. ca.gov/> California
Film Commission (CFC); David Phelps, director of external relations for the
<http://www.aicp. com/> Association of Independent Commercial Producers
(AICP); Cleve Landsberg, chair of the Assistant Directors/Unit Production
Managers/Technical Coordinators Council West for the <http://www.dga. org/>
Directors Guild of America (DGA); and labor representatives from the
<http://www.sag. org/sagWebApp/> Screen Actors Guild, IATSE Local 44 and
Teamsters Local 399.
Lemisch noted that production incentives in other states such as
Louisiana, Illinois, New Mexico and New York have yielded major dividends.
Expenditures on filming in Louisiana amounted to some $3.5 million in ‘02,
with a comprehensive package of incentives enacted the following year. In
‘05, that Louisiana figure of a few million dollars grew exponentially to
$246 million.
The CFC executive director also cited a
<http://www.laedc. org/economicinfo rmation/> Los Angeles Economic Development
Corp. (LAEDC) report which provided a handle on tax revenues generated by
filming. For example a feature film with a budget of $70 million translates
into nearly $10.6 million in state taxes. A commercial spending $560,000
would generate $47,000 in state taxes. And keep in mind that these are an
underestimate of revenue–state unemployment and disability taxes as well as
state taxes on any corporate profits are not included. The productions
described also generate substantial tax revenues for city and county
governments, including sales tax, business license fees, utilities and
parking taxes, permit fees and hotel taxes.
AICP’s Phelps noted that the commercial production industry has an
annual impact of some $4.5 billion, and is often referred to by assorted
film commissioners as “the bread and butter” of their business. According to
LAEDC research, commercial-making generated roughly $83 million last year in
California sales and income taxes alone.
Phelps added that there’s a misconception that a big chunk of spot
production would be shot in California anyway. The reality in this bottom
line-conscious business, he said, is that “every job is up for grabs” when
it comes to where to film. This, observed Phelps, has been recognized and
acted upon by some 34 states that have enacted production incentive
measures, most of which encompass commercials. This includes a three-tiered
program in New York specifically targeting spots.
But beyond incentives, Phelps affirmed that film-friendly policies are
also needed. Currently, he said, downtown Los Angeles–which has seen a
significant increase in its residential population– is considering
regulations that would place restrictions on filming, including the hours
during which lensing may take place. If enacted, such regulations could
discourage production downtown, which currently plays host to some 30
percent of the filming done in Los Angeles by AICP companies.
In his testimony, DGA’s Landsberg said of incentives, “The first thing
companies ask when I am hired to break down, schedule and budget a movie
project, is, ‘Where can we get the best incentive for our movie?’ This
naturally refers first to the creative requirements being fulfilled, but the
bottom line is always where can we get the most bang for the buck.
California has so much to offer, and we, who live here, want to stay at
home, but it is becoming more and more difficult to consider California as a
primary option.”
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