Twilight Sequel 'New Moon' #1 Advance Online … 
MPTF: Open Letter To Jeffrey Katzenberg 
'2012' Dominates For $225M 5-Day Launch … 
Showtime Rattled By Rival EPIX Arrival 
4TH UPDATE: MGM Studio Claiming Business As … 
'Paranormal Activity' Crosses $100M Cume: … 
EXCLUSIVE: DISNEY'S BIG JOB SWITCH; CFO Tom … 
Rich Ross Restructures Disney Studios' … 
20 Animated Films Vying For 2009 Oscars 
THE END OF 'OPRAH' AS WE KNOW HER: Daytime … 
Comcast & GE Pact To Keep NBCU Talks … 
Elle's Women In Hollywood Power List 
Governor Arnold Schwarzenegger has just called for a special session of the California legislature to figure out how to "stop the bleeding" because of the state's miserable economic condition. And he reached out to keep Hollywood at home by "providing tax incentives to new film and television production locating in California and production that has left the state, to return to the state." How will this be received by the legislature? My bet is badly and perhaps unfairly. Especially since Schwarzenegger also proposed $4.4 billion in tax increases, including a temporary 1.5% sales tax increase, and a slew of budget cuts that slashes assistance to the needy while raising taxes on those least able to afford it. So legislators may see providing services for the poor as more important than providing tax incentives to moguls. But what else is there to do?
True, Hollywood players like Iron Man director Jon Favreau have been lobbying Schwarzenegger for incentives to stop runaway production. I first reported back on July 22nd that Marvel Studios intended to keep $600 million in productions in the Los Angeles area, especially if the state of California made it worth their while. Then Marvel announced that its next 4 movies as well as its corporate office space are moving to Raleigh Studios Manhattan Beach. Schwarzenegger pledged to Favreau and Marvel to reach across the aisle and push for tax break legislation in Sacramento.
But the heat really was on the Guvernator before that in the wake of Ugly Betty leaving Los Angeles for New York to take advantage of an Albany-passed package of fat rebates. That impacted hundreds of local crew members who lost their jobs plus thousands working for L.A.-based vendors that depended on Ugly Betty. That production bought lumber, paint, wallpaper, cabinets, other building materials, office products, fabric, art supplies, computer equipment, food, beverages, flowers, film, makeup & hair products, wigs, insurance, jewelry, clothing. It rented lighting equipment, sound equipment, video playback equipment, heavy machinery, office equipment, backdrops, costumes, furniture, scenery, props, soundstages, offices, parking facilities, cars, trucks, storage facilities, computers, camera equipment, grip equipment, editing equipment, drafting equipment, cell phones, computers, toilets, dumpsters, live plants, production trailers, tools, hardware, artwork, walkie talkies. It used the services of dry cleaners, printers, location companies, special effects companies, utilities, caterers, payroll services, restaurants, security, post production services, clearance houses, etc. When it shot on locations around Los Angeles, it paid for permits and use of property, police and fire department personnel, facility engineers, etc.
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. But, 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.
Though his showbiz proposal contained no details, Schwarzenegger is known to favor tax credits of $100+ million to keep film and TV productions in California as part of an overall stimulus package. But Schwarzenegger's plan also carried a possible bummer for Hollywood labor. To "reduce barriers to job creation and rendition", it called for "providing flexiblity to employers regarding flex time schedules, meal and rest periods and overtime rules, to reduce the amount of costly litigation and encourage employers to keep jobs in-state."
Loading ...
Not being American I don’t have any skin in the game, but I do think it unfair to ask the taxpayers who are already facing increases in their taxes at a time when no doubt their incomes are being squeezed to fund breaks for one specific industry.
Of course having a film shoot in California provides lots of ancillary jobs and a boost to the economy, but so does any number of other industries and businesses. Are they going to be included?
Should one specific industry be singled out (even if politicians go ga-ga at the sight of a celebrity)? & If New York wants to pay people to come and work in their State, let them, they have budget problems as bad as California. What’s the alternative, you keep playing one location off against another and everybody loses.
In the interests of fairness any tax break available to the entertainment industry should be available on the same terms to any other industry, and you have to be prepared to say: I’m sorry we can’t afford it we have to pay teachers, healthcare and pensions first.
Personally, this will end worst than badly. (Yes I am using bad grammer, but it is for a reason.) For the record, Arnold is caught between a rock and a hard place. The choice is to either keep taxes low for normal people and let Hollywood exit, or give Hollywood massive tax breaks and increase taxes on normal people a 20% tax hike. I don’t know the actual tax rate, but that is likely about the total percentage hike, just guessing.
In any case, California has been bleeding population at a massive rate since Arnold has been in power, and it is likely worse than the losses suffered by North Dakota and Louisiana. I looked at Census information due to a project I did, and that is how I know about North Dakota’s population losses. Anyway, with the current economy, we need to force all the jobs in Asia to come back to the states, put to death the executives who sent those jobs overseas in the first place, and that is how we will avoid a depression.
If the State of California were allowed to play fast and loose with an “if you can find a better deal we’ll beat it” spirit of cooperation that extended to permits, free use of public property, tax credits and incentives then every producer lured to another country would be able to swiftly strike a better deal and keep everything here.
Instead of getting locked into a one size fits all structure, California should keep it fluid so it can rapidly adjust to the competition. Who cares if the production pays taxes or gets some money rebated or gets free services. Big deal. In the end if every penny of investment stays local it will reawaken the economy.
Tax cuts stimulate business.
We just voted for massive tax increases across the entire country.
We will all suffer.
Thank you, Arnold. It’s about time!
Michigan is offering 30 to 42% off for shooting there.
We will never get sacramento to go that far, but some give will help keep work in our state. Almost 40 states have rebates that we do not, it is absurd.
As to flex time schedules, etc. if they are union jobs they go by union rules. Even in other states with rebates they do not try to interfere with union rules.
Keeping work here benefits the unions but also the cities they film in and all the other people you mentioned that were affected by Ugly Betty’s move.
Sacramento cannot dictate what our union pay and rest times, etc are. But they can help our state’s economy and realize a tax rebate helps thousands more than the moguls, it helps the entire states’ economy.
The lib Democrats who control the California legislature have only a robotic answer to any tax relief – “NO”. Despite the fact other states have found economic gold by alluring movie shoots, California Democrats are perfectly willing to foist Hollywood into massive unemployment and then placate themselves by blaming the ensuing disaster on “big studioe” and Republicans.
But Hollywood voters always return these clowns to Sacramento. They’ve only themselves to blame.
I bet the state would have a lot more money if churches that politicize social issues were forced to pay taxes. Tax the churches now!
But what about those who live in New York who benefit now from the Ugly Betty move? No matter what happens, someone suffers. If production stays in California, then those of us in Louisiana or Texas or New Mexico will suffer. If production goes to other states, then California suffers.
What a political botch. Call me stupid, but I thought the man was more astute than this.
Lemme see if I get this straight. The California, and national economy is taking a hit of currently how much a month due to the SAG/AMPTP stalemate? Either big budget films cannot get insurance due to fear of SAG strike, or producers don’t produce because they’re a concerned of a shutdown mid-production. Hell, anybody know what bigger budget films are shooting in L.A. right now? What? Funny people with Adam Sandler, “A Single Man” by director/designer Tom Ford, some film with Travolta and Denzel Washington(?), and a few steaming hunks without the budget to generate any real cash flux into L.A. What else? Hell. Even with the writer’s strike at hand, we had more major/revenue generating studio projects in the works this time last year.
But instead of step in to stop the obvious hemoraghing by attempting to bring producers back to the negotiating table, something that could stop the blood-letting of tens of millions a month, he chooses to direct his efforts NOW toward tax incentives we don’t have a chance in hell of getting, and especially don’t deserve more than anybody else given the California Budget Crisis?
And worse than that, when producers already have a steadfast refusal to negotiate with SAG (putting aside the facade of the federal mediation which we all know is window dressing), he wants to toss into the fray all that “flex time, overtime” modification into the discussion? What? Producer proposed rollbacks given the migration to new media aren’t enough to have put a stake in the heart of current big budget film production? With a total stalemate at hand and producers drawing as hard a line in the sand as possible, the Governator thinks that this is going to improve negotiations and bring the sides closer together? Good Lord.
Talk about bad timing and a total political botch. Seriously appalling. It’s like debating cosmetic surgery which you absolutely cannot afford instead of focusing on your arm that’s been cut off and is squirting blood all over the wall.
I’m currently prepping three productions. All are out of state due to the rebates. I do not believe for a second that the legislature will do anything to help california in this climate.
It’s a shame, but California cannot compete with other states with such terrific incentives. And to those who say, “you should stay here anyway”, I wish we could but truth be told, these movies are getting made because of the incentives. without them we wouldn’t be able to complete financing. BTW, these are all independent features with no studios behind them.
State tax revenues will INCREASE if tax incentives are given to film and TV production. Why is that not obvious to the legislature and Governor? When productions leave they pay no state tax, when the film here they do. Wouldn’t you rather have a slightly smaller piece of the action than zero on zero? C’mon Arnold, get some help from the trades before you go in to the legislature and fail to deliver.
Once upon a time, Hollywood was full of glitz and glamor, (so that what people who lived outside thought) where people from little towns got of a bus and dreamed of stardom. Where tourist flocked to vist a real studio and maybe, lucky enough to happen on a crew filiming on location. Now, filming takes place right outside their window, in their own town. Bringing back filming, primary in California, will help the the economy in all area’s. I remember when it was, “the filming capital of the world”. California is fortunate enough to have it’s own mini industry to boost the budget, and they let it slip away.
For those of you who make a living in the entertainment business, but who are not actors. I’m going to presume that all you want is for there to be an agreement between SAG and AMPTP that gets film production back into full swing, and you seriously don’t give a rat’s ass what we agree to, as long as we agree so film production will get back in full gear and you get back to work.
Here’s the situation in a nutshell. All I seek is logical understanding. I don’t expect sympathy or seek that you “like” us, period. I’m appealling solely to your desire that SAG/AMPTP agree, which lets you get back to work.
Just hang with me a second. Because putting aside emotion for a second and understanding where we are is how you get what -you- want.
For the 99.9% of SAG members who are not “names,” we get paid very well per hour of work -on set-, then for every hour we spend working on set, we throw hundreds of hours of time, and tons of money (for things like training and promotion) to get that work.
Two things keep us -willing- to work, rather than refuse, and that’s what gets -you- work.
On the front end of days we’re on set, we pray for long hours so that we can get overtime pay that’s pretty normal for any industry so we can surive as much as months of not working -on set- (as opposed to busting our asses getting work on set). On the backend, we rely on our “deferred compensation,” which is residuals.
We already have a stalemate over pretty much, the residual situation, which with the migration into new media represents a rollback to actors.
On that issue alone I think most agree we’d have a current stalemate which costs all of us money — including you.
As “sagmember” pointed out, neither the governator nor the California legislature, nor any other legislature controls our overtime rules — in any state.
So the ONLY thing the governator can do by bringing that hornet’s nest of overtime/flextime issues to public rhetoric is to further divide the already inconquerable gulf that’s causing the production slow down, and keeping you from working at full capacity.
Love actors or hate ‘em, doesn’t matter. Love producers or hate ‘em, it doesn’t matter to the calculus of what gets everybody back to work. What gets people back to work is bridging gaps, rather than setting explosives under currently somewhat dormant issues.
Strike is already debated, and production has slowed because actors feel that producers are trying to take away one of the -only- thing that allows us to survive: Residusals.
To open another pandora’s box for the public forum has ZERO chance of getting production going again — as it’s not an issue legislatures have power to do bupkis about …
and it has every chance of reinvigorating currently dormant big dogs that would have us refuse to go to set as it would be considered a stop-in-the-tracks deal killer for a group (SAG) that has to agree to work so you can work.
Wanting to address tax cuts and race other states to the bottom of the barrel, through tax incentives, at the worst time of California’s financial history that many of us can recall seems wildly out of touch with realities already.
But kicking a sleeping dog of more deal-killer-production-haltage issues is just practical political naivte and ineptitude in an area many of us (wrongly) believed that if anybody understood, it would be this guy.
California became the centre of the movie industry when producers realized that the sunny weather, abundant, and cheap land, and equally abundant and cheap labour made it attractive to them. It wasn’t the first choice* but the folks who came figured it was the best choice for the time.
That was the up side. The down side was that its own success destroyed the very factors that made it successful. Land got bought up, and exploded in price beyond even market value, labour got expensive, resources (water & power) got expensive, and the whole industry became heavily centralized into one small area.
An argument could be made that the migration of production away from that centre is the natural evolution thanks to changes in technology and economic conditions. They could also claim that a de-centralized industry may actually work out better for everyone by breaking the bubble of isolation that Hollywood exists in.
Personally, I think the whole problem could have been avoided if both Hollywood and Sacramento hadn’t been so inefficient, wasteful, and unrealistic when it comes to basic economics.
*Albequerque almost became the movie capitol, but it was raining when Cecil B. DeMille and the folks from Famous Players-Lasky arrived to scout it as a location for the Squaw Man almost 100 years ago.
Furious, where is your source that says that Albequerque was considered a location for movie filming in 1914? According to Wikipedia, establishment of studios started in about 1910. Hollywood was already a breeding ground for filming when Cecil B. DeMille arrived.
Getting back to the theme of my first post, I forgot about the motion picture lockout by the AMPTP. If the Governor wants to help out Hollywood, he should force negotiations to continue in an unmarked building with all the principles in the same room, and use the National Guard to imprison them and bring them meals until they make a deal. Nobody will like the conditions, but what are you going to do to get the entire system working again.
Sterling said: “Wanting to address tax cuts and race other states to the bottom of the barrel, through tax incentives, at the worst time of California’s financial history that many of us can recall seems wildly out of touch with realities already.”
What state are you from Sterling? You really think it’s a bad time to discuss tax incentives for filming in California? Of course those in the industry in California would like to see production return home. Ask most any producer about how much easier it is to film here with our existing infrastucture of production facilities, post production, prop houses, weather, etc – then ask if given incentives would they film here. Most would agree that SoCal is still THE best place to film bar none.
Once again let me state that Tax incentives will increase production in the state thereby increasing state revenue as well as create new jobs as well as protect exiting jobs. So how is that bad for California’s economy right now?
For some reason you also attempted to include the SAG/AMPTP in your comments on tax incentives and to make your point threw in an insult about how the rest of the industry “don’t give a rat’s ass what we agree to, as long as we agree so film production will get back in full gear and you get back to work.” Then I went to your website where I read your own obsevation of yourself and it all makes sense: “An egomaniac with a penchant for causing needless trouble wherever he goes”. Somehow I feel better knowing that you are just a fool shouting at the wind and not really an important voice in all of this.
Sigh … more of the same. I will keep this very short so that the point is not lost in a lot of explanatory rhetoric.
Unless and until POST-60’s are abolished, there is not much Arnold can do to keep shooting in California. The pennies you will save on production will not offset the residuals of post-60’s which can be avoided by shooting outside the 13 western states.
Fact: Entertainment is one of California’s biggest exports.
Fact: Nothing stimulates production to stay in California like tax incentives.
Fact: A robust increase of revenue and jobs within California as well as all of the support industries will more than make up for any lost revenue due to tax incentives.
When Hollywood was booming studios were not paying all of these taxes, that all came later as the state tried to get and got a big vampire bite on production. They know it’s intolerable to production and yet they keep trying to solve it by promising to suck less blood, when what they have to do is unlock the jaws and get off the neck of production.
If California got it’s tax money second hand from the income tax and local spending of well paid production wage earners California would be in great shape.
To Jessy S.
California was mostly used for shorts with stories that were set in California, mostly westerns and tales of the gold rush, but the bulk of the industry was still filming in New York, and to a lesser extent, Chicago.
The Squaw Man, Hollywood’s first feature film, was supposed to be shot in Albequerque, but the old legend says that when the location scouts got there, it was raining, so they moved on to what they hoped would be a more clement place. Sure it’s probably more legend than anything, but it sort of shows the randomness of fate, and how you can really have a movie industry anywhere, which more true now than ever.
So Hollywood would get a tax break, yet the middle class people are going to pay through the nose with the $10.25 sales tax hike? Yeah that makes sense….
Maybe the idiots up in Sacramento can learn to control their spending on Illegal Aliens who eat most of our budget. Wait that would require using their brains which they don’t have…
I have a better idea!
Congress should outlaw all tax breaks that states give to businesses of any type.
All these tax break have done is cause a race to the bottom.
There should be a level playing field across the states.
We are one country after all, no matter what some people would have you believe!
What a shame our legislators can’t see beyond the fact that it’s more than 250,000 people in Southern California who are dependent upon the seasonal employment of the film and television industry. We crew members are the ones who are losing our homes, our cars, unable to pay property taxes. Our health insurance and pensions are being affected. We’re not the fat cats, but the ones who are being most seriously hurt by the incentives in other states. Wake up Sacramento!
I think Hollywood should get a tax break. It will be good for business and it will create jobs and grow the economy. I think ALL businesses should get a tax break. If it’s good for the movie business, it’s good for any other business. It’s reasonable to assume they would also create jobs and grow the economy.
Oh, wait. We can’t do that. That’s “Trickle Down Economics.” That’s too Republican.
UGH on Ugly Betty!!!
Enough already with the Ugly Betty sob story about them leaving LA for NYC. We (LA) “stole” that show from NYC in the first place. The pilot was shot in New York. All through the first 2 seasons, the producers wanted to shoot in New York. The amount of greenscreen work, just to fake New York, was ridiculous.
I am, of course, completely for stopping runaway production. But how many shows that take place in LA are shot in New York? Compare that to the number of New York-based shows that are shot here and stop complaining about ONE show that went back.
In 2002 California used to have an incentive program called Film California First. Had the program not been in existence I would have had to take my film, The Rules of Attraction, to Canada. It was one of the first programs cut by Schwartzenegger when he came into office. At minimum I’d like to see a similar program reinstated, so that I can continue to argue to shoot my films in California, where the best crews in the world live and work.
“Anonymous,” be sure to get back to me the second those tax cuts for the film industry pass.
But while you’re holding your breath, you might want to get out of L.A. once in a while. When you stop in Berkeley, Sacramento, or hell. Go to Riverside. Ask a few peops how much they want to cut “*Hollywood*” a break right now — at the same time the Governator is also now asking for an increase in sales Tax — as opposed to other industries.
Be sure to attack them personally when they give you that “you gotta be kidding me” stare, then follow up by trying to tell them that helping Hollywood by cutting it a break will “trickle sideways” to them … and how helping us will more effectively help them than it would to do the same for other industries that actually have work somewhere around their town. Then when that doesn’t work, convince their rep in Sacramento to throw his/her career down the drain by being “smarter” than them and catering to Hollywood.
Timing is a key component to political pragmatism, and Arnold seems to have lost it (e.g., proposing that increase in Sales Tax right *after* Los Angelians just agreed to raise their sales tax to improve the transit infrastructure is jaw-droppingly poor timing).
So sure. Write Santa some notes, and hope Santa brings you a new mansion and a Lexus.
But if you think that Sacramento thinks that its constituents are going to support stimulus for the film industry at any time, let alone *now* — and that’s where the Governor should be spending what political pull he may have … be sure to get back to me when that happens. My breath will not be held.
Give major film producers a 100% tax rebate right now, and without a break in the SAG/AMPTP negotiations or some light at the end of the tunnel, and the grand total of new major film production and monies to the L.A. and State economy is going to buy a six dollar burger at C.J.’s, without fries.
We have an 800 pound Gorilla in the room when it comes to what’s stopping major film production and realistically, with work and creativity, he can disappear. Ignoring that best to focus on dream wish lists, on some conviction that the constituent of a majority of reps in Sacremento is inclined to favor us over some other industry was the hardest of sells when the State Budget was rockin’: Choosing -now- to finally get off his formerly muscled ass and gun for something that he couldn’t be bothered to do for years is the essence of bad timing, and the antithesis of smart politics.
Actually Sterling, I was the “anonymous” poster – I forgot to add my name to the post. Yes go and ask those in other areas about a stimulus, but ask on behalf of our state’s largest export gnp and then see if they support it. Give them the facts that film production will actually help state revenue and the financial health of the state. Your “trickle sideways” analogy is truly bizzarre! Your message seems to be that all is lost so why try? Stand aside pup and let the big dogs handle this one.
399
Is this Sterling Wolfe’s website or what? He feels obliged to post multiple times on every single thread and all he does is spout gibberish that a five year old would roll their eyes about. Much like Crystal Diane Stevens. The same person perhaps?
As an above poster said, those in Hollywood don’t give a crap about all those shows set in New York that are filmed in Hollywood do they? Such as CSI: New York. Where are the tears and histrionics in those cases? Oh that’s right. They don’t give a shit about anyone but themselves.
Thanks for the clarification Furious D. Yet I pretty much believe that the Squaw Man was filmed in California, and only location considered because it was a western. Today, the bulk of the industry still films in New York when you consider the fact that most news productions are based there while plenty of TV Productions are also filmed there.
A sales tax increase for the rest of us while the studios get tax breaks to pay the likes of Jolie, Pitt, et al. tens of millions per movie? An odd sort of similarity with Main Street taking it on the chin while Wall Street is given a bailout. How many of those talking about “job creation” by giving special breaks to Hollywood are the same that are up in arms over general corporate tax breaks? There is a word for such and it is called hypocrisy. “Spreading the wealth” starts at home and as soon as the A-listers and the rest of their ilk start “spreading the wealth” with PAs, background players and the 95% of the union that does not make enough to not have to take second or third jobs then perhaps they can actually have a platform to stand upon regarding “social justice.”
I agree with the previous poster about how many tv shows are really produced in New York. There aren’t that many in comparison to Los Angeles. I do find myself gravitating to shows based in New York because I find the city as almost a third character with a personality all it’s own. It’s fun to watch
You’ve got to look at the big picture. For the last 20 years businesses have been fleeing California because of high taxes, high property values, massive traffic jams, crime, illegal immigrants, and low quality of life in the urban areas. The whole argument about giving Hollywood some tax breaks is to try to stem the flow of even more money leaving the state. There’s no overnight fix for California. This is just an attempt to try to preserve what’s left of a major business in the state.
The problem Schwarzenegger has is where to cut? Everyone says cut the waste. But where’s the waste? 41% of the budget is for education! Should the state start closing schools? 10% of the money is for jails. Should the state release its criminals? 25% is for welfare. Who do we kick off? Another 10% is for transportation and housing. What do we shut down? Only 5.5% of the budget is the actual expense of running state government and Schwarzenegger has frozen hiring new employees.
Trying to hold on to movie production is probably the quickest and easiest way to stem the loss of a major business. Plus it keeps people employed, which means they’re paying taxes and are off the unemployment roles. That alone is worth it, even if the state collects less than it would of from the movie business.
As for California’s other problems, raising taxes will probably cause more people and businesses to flee, but the state can’t print money like the federal government, and unless the feds decide to bail out the state, there’s not much else it can do to balance the budget right now.
FYI the entertainment law community in Texas is looking at lobbying Austin to improve Texas’s incentives for attracting film & TV production…the tone of this Texas Bar Journal arrticle is concern that Louisiana and Michigan have stolen the Lone Star State’s thunder in attracting production because of better state tax rebates (BTW Texas has no state income tax so there is one place Texas can’t offer any discounts unless it starts collecting state income tax from everyone in Texas including long time permanent residents and then refunds something to the film and TV production companies that are likely to be transient businesses, a move that resident Texans are unlikely to permit to happen)
http://www.texasbar.com/Template.cfm?Section=Past_Issues&Template=/ContentManagement/ContentDisplay.cfm&ContentID=22398
If you ask me this is a race to the bottom amongst all the states and it’s going to prove unpopular among the broader community of taxpayers no matter what state they live in. I think Americans can get behind the idea of keeping entertainment production jobs in the USA (so called ‘runaway production’) but if you start pitting California vs. New York vs. Michigan vs. Louisiana vs. Texas ad nauseum this won’t end well, especially given the fact that unlike attracting say an manufacturing plant, those in ‘the biz’ could bail on a moment’s notice, frustrating the long time resident taxpayers of the state/jurisdiction.
I don’t know what the answer is here to keep all the states from duking it out amongst each other but there will be consequences to that and not all of them will be hugely positive.