The Golden State saw a loss of production spending to other states and countries more than double last year from the year before, the California Film Commission said today. According to the CFC’s annual Progress Report (read it here), more than 40 projects that applied for but did not receive a piece of California’s $100 million Film and TV Tax Credit program last year ended up spending $1.062 billion outside the state in territories that offered incentives. That’s a record loss to the state since the tax credit program was introduced in 2009 and a $722 million leap over the $370 million spent outside California in 2012-2013 on projects that missed being picked in the tax credit lottery. And here’s the thing: that $1 billion plus figure doesn’t take into account projects that didn’t even apply for the incentive last year – like tentpoles with budgets over $75 million, which are ineligible for the current program.
Still the report wasn’t all bad news — though there was a lot of that within its pages. With $700 million in tax credits allocated since California introduced its incentive program, today’s report estimates that has led to $5.39 billion in total aggregate direct spending. The CFC document adds that includes about $1.72 billion in below-the-line wages. But as anyone in the industry who has seen a friend or family member relocate to Georgia or up to B.C. for five months, it is not stopping the flood. Read More »
California's Tax Incentives Lottery System Is Broken
Despite this year's record number of applications, a lot of people are unhappy with the lottery system used for California's Film and TV Tax Credit Program. The current random-drawing method negates merit and is uncertain, explains Deadline's Dominic Patten reports.
We won’t know for nearly a month who gets a piece of California’s $100 million Film and TV Tax Credit program pie this year, but we do know today how many projects were picked via lottery and how many applications were submitted. The California Film Commission says 23 projects have been initially selected and that 497 applications were submitted before Monday’s 3 PM deadline. In terms of the initial projects pulled in the lottery, there’s a slight decrease from last year. In terms of applications, that’s a record for a program where demand always outstrips supply. It’s about 30% more than last year’s record 380, when the likes of Warner Bros’ Entourage movie, the fourth season of MTV’s Teen Wolf and the fifth seasons of FX’s Justified and ABC Family’s Pretty Little Liars emerged as winners. Last year saw 29 projects initially successful in the lottery. That went up to 31 projects a day later on June 4, 2013, when a TV series dropped out and freed up funds. With a Deputy Fire Marshal pulling the numbers, the lottery started yesterday afternoon but was suspended around 4:30 PM when the CFC offices were evacuated due to a nearby bomb scare. Picking up where they left off, the commission restarted the lottery at 9 AM today.
Related: DeadlineNow: Don’t Blame Canada, Fix California’s Film & TV Tax Credit (Video)
Now that the initial winners of the credit covering about 20% of production costs also has been determined in a random selection process, the state office plans to take the next few weeks to check the applications thoroughly to make sure they are eligible for the incentive. A list of successful projects will be made available on July 1. In past years, the commission has announced the name and number of projects that scored on the lottery, but this time round it wants to thoroughly check each potential winning application individually to make sure it qualifies. Read More »
The lottery for a piece of California’s $100 million Film and TV Tax Credit program was interupted today after a suspicious package was discovered on Hollywood Boulevard, closing down the busy stretch near La Brea Avenue. About 45 minutes into the lottery process, where a deputy fire marshal had the ceremonial duty of pulling winning numbers for successful candidates, police ordered the California Film Commission’s offices evacuated, sources tell me. The lottery is expected to pick up Tuesday morning where it left off. Commission officials left behind documents in the office that recorded the winning projects selected so far, I’m told. Hollywood has been closed between La Brea and Sycamore with traffic being pushed onto side streets (in other words, it was a nightmare). (UPDATE, 5:46 PM: LAPD says the bomb squad determined the package was not harmful and is planning to reopen the streets in the area soon.)
Related: HBO, City Of LA, Disney & Unions Praise Passage Of New Film & TV Tax Credit Bill
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UPDATE, 1:14 PM: The state Senate leader has removed Ron Calderon from the California Film Commission in the wake of allegations in an FBI affidavit of bribery and influence peddling of the state’s $100 million Film and TV tax credit program. “If for no other reason, the appearance of impropriety dictates that the senator no longer sit on that commission,” President Pro Tem Darrell Steinberg said yesterday after details of Calderon’s supposed actions were made public. Steinberg added that regardless of whether the claims — first revealed by Al Jazeera America — turn out to be true, he doubted that one person could change the state’s film and TV tax credit program the way Calderon is said to have told an undercover FBI agent he could. Steinberg also told reporters Thursday that any effort by Montebello Democrat to drop the $1 million minimum budget requirements for a film to eligible to qualify for the program down to $750,000 was never brought up in committee talks. Additionally, the FBI has asked the DOJ to look into how the sealed affidavit got out.
PREVIOUSLY, OCT. 31 AM: California State Sen. Ron Calderon took tens of thousands of dollars from undercover FBI agents to make changes to the state’s $100 million Film and TV tax credit program, according to Al Jazeera America. Citing a sealed FBI affidavit, the channel aired a report Wednesday providing details into the well-known investigation of the influential state politician.
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UPDATE, 5:22 PM: The lottery is over and 28 projects were selected today for this year’s California’s $100 million Film and TV tax credit program. That’s even with the 28 projects that were initially approved on June 1, 2012 in last year’s lottery. The doors closed Monday at 3 PM at the Film Commission’s office on Hollywood Boulevard with the last few applicants getting their submissions in under the wire. Soon afterwards, the random picking process began. A total of 380 projects were submitted between 9 AM and 3 PM today before the deadline. That’s a record for the program since it was introduced in 2009. The previous high was the 322 projects submitted last year for 2012’s $100 million allocation. A Deputy State Fire Marshal actually picked tickets out of a cylinder built for just such a lottery purpose. Each ticket had an allocated number on it that each submitted project was given Monday. All the remaining projects will now go on a waiting list in case approved film or TV projects drop out or have production or scheduling delays and lose their place and credits. Though 28 projects were first approved last year, the total figure that actually received tax credits actually ended up being 75. Today’s approved figure could also change as the Commission conducts a more thorough review of the projects. This year’s initial successful applicants will be contacted tomorrow. A full list of the features, miniseries, MOWs and TV series that were awarded a portion of this year’s $100 million and how much they received is expected Tuesday afternoon. Keep your fingers crossed Hollywood.
Related: Governor OKs $100M Film-TV Tax Credit Until 2017
PREVIOUSLY, 2:05 PM: There’s less than an hour left if you want to take a chance at getting a piece of this year’s $100 million California film and TV tax credit program. The state Film Commission is accepting applications until 3 PM PT at its Hollywood Boulevard offices for this year’s lottery, and then Lady Luck works her magic. “At 3 PM we’ll close the door so that we can conduct our lottery with assistance from the Deputy State Fire Marshal” who adds another layer of transparency to the process, Film Commission executive director Amy Lemisch told me today. “The lottery ensures credits are distributed fairly”. Once the $100 million is used up, remaining projects that didn’t receive funding will be put on a waiting list. That list isn’t quite the purgatory one might think: If already-approved projects drop off due to scheduling or production delays, those on the list will take their place and credits. Last year, 28 projects initially won a piece of the up-to-25% tax credit program. Read More »
After years of decline and a few small rises, production is strongly up in LA according to FilmLA. In its 1st Quarter report, the non-profit permitting group says overall production in LA County rose by 17.6% over the 1st Quarter of 2012. FilmLA’s data comes from filming permits for shooting on streets, non-certified sound stages and in unincorporated areas of Los Angeles County. The organization had Q1 2013 with 13,361 permitted production days over 11,360 in the same period in 2012. Feature production in LA was up the most of all the categories with a 25.5% rise over Q1 2012. What is especially noteworthy of that upward turn is that the quarter is usually a slower time for feature production in LA so that big a rise could be a strong indicator of the beginning of a significant change. The previously downward turning on-location Television production was also up double digits over last year. The category rose 19.0% in Q1 2013 over 1Q 2012. Of all the Television subcategories, TV Pilots were up the most with a 37.3% rise over last year for 460 PPD. With the first quarter of the year typically being when most pilots are made, the rise is significant. The overall rise in TV production is the best Q1 TV production has had in six years, according to FilmLA.
Related: LA Production Sees Small Rise In 2012 Despite TV Drama Drop… Read More »
2012 was a rollercoaster of a year for production in Los Angeles County, said FilmLA today. In its end of year report, the non-profit permitting group noted that while overall on-location production in LA County rose a meager 1.7% from 2011, TV Drama fell a harsh 20% from the year before. FilmLA’s data comes from filming permits for shooting on streets, non-certified sound stages and in unincorporated areas of Los Angeles County. With the likes of the upcoming LA-set Gangster Squad actually filming in LA, 2012 Feature production saw a slight 3.7% rise over 2011 with 5,892 PPD as compared to the 5,682 of the year before. That is actually the best year since 2008 before the state passed the California Film & TV Tax Credit Program, which now hands out up to $100 million a year in a lottery system. On the flipside, the drop in Drama-permitted days and the 11.8% slide in the TV Reality category pulled overall TV production in the region down 3.4% with 16,762 permitted days in 2012 compared to the 17,349 PPD in 2011. However, TV Sitcom filming was up 52.9% with 2,048 PPD compared to 2011’s 1,339 PPD. TV Pilots were up 2.2% from 2011. Commercials rose 14.1% in 2012 over the year before. Read More »
Justified, Teen Wolf, Pretty Little Liars and Body Of Proof are among the 28 projects picked by lottery to receive tax credits from the California Film Commission’s $100 million allocation, the commission revealed today. The basic breakdown: 10 film productions and 18 TV productions will receive credits. The commission says 53.5% of the projects were independent and 46.5% were studio-based. It estimates the projects will spend more than $683 million in California, including nearly $265 million in qualified wages.
Related: Will ‘Body Of Proof’s California Production Tax Credit Win Help Secure Back Order?
The selected projects, which could change based on schedules and other production-delay issues, will mean employment for about 2,800 crew members, an estimated 2,900 cast members, and 57,000 extras/stand-ins. (UPDATE: The Hollywood guilds have come out with a pro-tax credit statement praising the lottery results; see their statement below.) The commission received 322 applications for this year’s production tax credit lottery by Friday’s 3 PM deadline. It will continue to accept applications for placement on the waiting list. Here’s the breakdown of today’s winners, followed by the projects by name: Read More »
UPDATED: The California Film Commission will hold a lottery on June 1st to select which qualified movie and TV production projects will receive the next $100M allocation of tax credits awarded under the state’s production incentive program. The commission will accept applications at its Hollywood Blvd. office on June 1 from 9AM to 3PM, at which time the lottery will be held. Applications received after 3PM will be processed the following day, according to the commission’s website. Projects that are not selected for credits via the first day’s lottery will be wait-listed, as some of the chosen projects drop out and credits become available. Of the total, $100 annual allocation, $10 million is reserved for indie films with minimum budgets of $1 million and maximum qualified expenditure budgets of $10 million. Feature films with budgets up to $75 million are eligible for a 20% credit. TV movies and miniseries with a minimum budget of $500,000 are also eligible for the 20% credit. New TV series licensed for cable TV are eligible if they meet minimum budget and other requirements. Existing TV series that formerly filmed all previous episodes outside California, as well as indie films, are eligible for a 25% credit, subject to budget and other restrictions. More information is available here.
Sony Pictures executive Keith Weaver has been elected chairman of the board of the California Film Commission. Weaver is Sony’s EVP worldwide government affairs. He has served on the commission board since 2008. Commission executive director Amy Lemisch said of Weaver in a statement, “He’s as much at home in Sacramento as he is in Hollywood, and he knows how to get things done.” Other changes to the board include new vice chair Steve Dayan, business agent of the Teamsters’ Studio Transportation Drivers Local 399, and secretary Hilary Rice Armstrong, a documentary producer.
California’s film and television tax credits would be extended five more years if the State Assembly has its way, after a bill that would add an extra $500 million to the program was approved today by a 72-1 vote. The state Senate will vote on the legislation, enacted in 2009 to slow runaway production, later in the summer. “What we’re doing with this bill is retaining and creating jobs by leveling the playing field and making California competitive again,” bill co-sponsor Felipe Fuentes told the LA Times. An additional $100 million is set to be allocated for the fiscal year that begins July 1, the Times said, but of course that’s if a new state budget is passed by then — Gov. Jerry Brown’s proposed cuts are massive and could steamroll any proposed credit program; they also have generated serious pushback from both sides of the aisle. Also, a state budget has been signed into law only five times in two decades, according to Reuters, so who knows how long this could take. The California Film Commission, which administers the program, said that since the incentive was signed into law, its projects are responsible for $2.2 billion in direct spending within the state, including $756 million in wages paid to below-the-line crew.
It wasn’t enough that the Guvernator Ah-nuld mucked up California. On New Year’s Eve, Schwarzenegger made a slew of last-day political appointments and re-appointments in a smoke-filled room, and put his 3-year press secretary Aaron McLear on the California Film Commission. Others in the unsalaried positions include TV veteran Lindy DeKoven, former NBC Entertainment EVP, and Moulin Rouge producer Fred Baron, EVP of feature production for Twentieth Century Fox.
McLear, a Republican, previously served as a regional press secretary for the Republican National Committee from 2005 to 2007 and was communications director for the 2004 Bush-Cheney Campaign in Ohio. Prior to that, he served Ohio Governor Bob Taft as a legislative liaison, assistant press secretary and communications assistant. Baron, a Democrat, since 1990 has overseen the productions of feature films that include: Knight and Day, Date Night, The Day the Earth Stood Still, Live Free or Die Hard, Borat, Kingdom of Heaven, I Robot, The Day After Tomorrow, Last of the Mohicans, Grand Canyon, Edward Scissorhands, Hot Chicks, Broken Arrow, Romeo and Juliet, Alien Resurrection, Bulworth and Moulin Rouge. Interestingly, few of those productions were filmed in California. DeKoven, a democrat, has headed DeKoven Entertainment after she left NBC in 2000. She is chair of the Commission on the Status of Women. Also appointed was Hilary Rice Armstrong, another Democrat, who since 2006 has been president of Fire of Life Films and executive producer for California State of Mind: the Legacy of Pat Brown. Additionally, she has been development director for My California Now … Read More »