Sony Pictures Imageworks announced late Thursday that its headquarters will relocate to Vancouver, leaving the fate of its 270 Culver City VFX workers in question. The Oscar-winning VFX and digital animation wing of Sony recently handled effects on WB’s Tom Cruise sci-fier Edge of Tomorrow and Sony-Columbia’s The Amazing Spider-Man 2. Its current and future big-ticket projects include Disney/Marvel’s Guardians Of The Galaxy, Columbia’s Pixels, the Angry Birds movie, and Sony’s Hotel Transylvania 2 and the untitled Smurfs sequel — all of which will be spearheaded by the Vancouver team as the company preps its move into a new 74,000-square-foot state of the art facility in Vancouver’s Pacific Centre.
Related: HBO, City Of LA, & Unions Praise Passage Of New Film & TV Tax Credit Bill
A smaller LA-area office will remain as the headquarters shift is completed next year, though it’s unclear how many current employees will make the move. Dozens of staffers from SPI’s Southern California office were relocated in January to Vancouver, where SPI first set up shop in 2010 with just 80 artists. The move to the new Canadian digs, which can accommodate up to 700 employees, comes as ongoing concerns grow among some VFX pros that British Columbia’s generous 58% tax incentives could lure even more runaway VFX production to the region, away from hubs like Los Angeles.
“The 58.4% subsidy for BC-resident VFX artists shows how unsustainable subsidies have become and how expensive it would be for states like California to compete in the ‘race to the bottom,’” said VFX activist Daniel Lay, who runs the VFX Soldier blog. “Even [the passage of] California state bill AB1839 would probably do little to stem the effects of VFX runaway production to B.C. because of how much higher it is. Furthermore, B.C. is starting to lose their advantage to Quebec, which not only matches BC’s labor subsidies but provides 25% on non-labor costs also.” Read More »
Warner Bros.‘ three Hobbit films have racked up over half a billion dollars in production costs, reports the AP, citing Kiwi financial filings that say Peter Jackson has spent $676 million New Zealand dollars ($561 million US) so far on his LOTR follow-ups. But that figure’s just the total so far as of March 31 and doesn’t include post-March spending, post-production expenses, and marketing costs. WB has additionally enjoyed $98 million worth of New Zealand tax incentives for shooting in the area. The first of the Hobbit pics, An Unexpected Journey, grossed over $1 billion worldwide after debuting last December. Sequel The Desolation Of Smaug is set to follow with a December 14, 2013 release followed by There And Back Again on December 17, 2014.
Related: Race To Finish ‘The Hobbit’: Video
Peter Jackson Confirms No ‘Hobbit: The Desolation Of Smaug’ At Comic-Con, Too Busy Finishing Sequels
New York Governor Andrew Cuomo today announced the creation of a new post-production, VFX, and animation company to be established at the Tri-Main Center in Buffalo, NY. Empire Visual Effects and Daemen College will partner on the project which is expected to bring 150 new jobs within five years to the western NY city. Funding comes from a $4.5M allotment awarded by the state of New York from its $1B Buffalo Billion Investment Development Plan. In 2012, Cuomo upped post-production incentives from 10% to 30% in the metropolitan NY region and 35% in upstate NY; in April 2013, he raised filming and post-production tax credits to as much as 45% for qualified productions.
The new study provides some statistical ammo for those in the Commonwealth who like the tax break, and are still smarting from a state Department of Revenue report in March that raised questions about whether it makes sense. The MPAA commissioned analysis from HR&A Advisors says that the state’s $37.9M in tax credits in 2011 added $375.3M to the Massachusetts economy including 2,220 full time equivalent jobs. That “reconfirms that incentivizing productions creates jobs and generates enormous economic return for local and state economies,” MPAA chief Chris Dodd says. Recent productions in the state include The Fighter, Grown Ups, Moneyball, Ted and The Town. The MPAA findings contrast with the state Department of Revenue study that concluded the incentive cost taxpayers $44M in 2011 and added about $39M to the state’s economy. Early this year Gov. Deval Patrick urged the legislature to cap the tax break at $40M a year, charging that it provided too much assistance to highly paid movie stars. The incentive appears to be safe for now; last month the state House dropped the idea for the budget it approved. The film tax incentive, introduced in 2006, sunsets in 2023. It consists of a 25% payroll credit for employees who make less than $1M a year, a 25% production expense credit, and sales and use tax exemption.
Ross Lincoln is a Deadline contributor.
Medient Studios, a Los Angeles-based production and distribution outfit with a presence in India, has announced plans to build a $90 million movie studio near Savannah, GA in a deal cleared this week by the Effingham County Industrial Development Authority. Although the deal may end up being good for Georgia, it comes during a precarious time for the Los Angeles-based entertainment economy — even with large-scale expansions underway at NBC Universal, Disney, and Paramount.
Related: NY State Tax Break Tailored For ‘Tonight Show’s Return To NYC
Despite an overall increase in movie, TV and commercial production, Los Angeles saw a steep drop in television drama and reality TV production in 2012, a problem the city has attempted to address at least partially by eliminating fees for pilot production. And places like New York, Louisiana, and Michigan as well as Georgia continue to pursue production business aggressively.
Related: Post Production Work In New York Rises From Higher Tax Breaks
“Of course, we’d prefer these kinds of investments be made in the State of California instead of in Georgia,” FilmLA VP of Integrated Communications Philllip Sokoloski told Deadline. “Although the L.A. region has its own studio developments in progress, infrastructure development elsewhere can only intensify the competition we face for valuable film projects and jobs.” Read More »
UPDATE 3:30 PM SATURDAY: After Gov. Susana Martinez vetoed the measure on Friday, the state House and Senate repackaged the film and TV tax credit as part of broader legislation to provide tax cuts and other incentives for more types of business. The production tax credit will rise to 30% from 25% for a qualifying TV show producing at least six episodes in New Mexico. The extra 5% will also be available to film and TV projects that use a film studio inside the state for an extended time using some resident crew. Incentives remain capped at $50 million a year, but the revised legislation allows unused credits/subsidies of up to $10 million to be carried over to the following year — offering up to $60 million annually in some instances. The Legislature has adjourned but the governor has indicated she’s prepared to sign the bill.
PREVIOUSLY, 7:25 PM FRIDAY: Gov. Susana Martinez opposed the so-called “Breaking Bad bill” that would have raised the state’s film tax credit to 30% from 25% for TV series shooting at least six episodes in New Mexico, AP reported. Martinez told the Legislature she supports the film industry but objected to a subsidy just for Hollywood rather than making it part of an overall package of economic incentives she’s backing. With New Mexico-filmed Breaking Bad in its final season and In Plain Sight already wrapped, backers of the incentive are … Read More »
Studios enjoyed their best year ever at domestic box offices in 2012 — but still managed to persuade lawmakers that movie and TV investors need a sweet tax deduction to keep the cameras rolling in the U.S. The new agreement to avoid the so-called fiscal cliff collection of spending cuts and tax hikes includes a provision enabling investors in productions shot in the U.S. to deduct the first $15M of the costs or $20M if the shooting takes place in low-income areas. Investors love the break, in Section 181 of the Internal Revenue Code, because they can take the entire deduction in the first year instead of spreading it over several years, and can combine it with state tax credits. It began with the American Jobs Creation Act of 2004 and in 2008 was amended and extended to the end of 2011. But Congress didn’t renew it in time for 2012 productions. No matter: the package that lawmakers just approved will provide the deductions for productions made in 2012 and 2013. Read More »
New York Gov. Andrew Cuomo’s Office for Motion Picture and Television Development is taking a victory lap today, saying that tax breaks the administration supported resulted in a record 24 film and TV productions that plan to do their post production work in the Empire State. In July the state increased the post production credit to as much as 30% from 10% for work in and around New York City, and to 35% for other parts of the state. The number of projects queued up for relief under the new terms is higher than the total applications from the previous two years. That’s “proof positive that the post incentive is working exactly as we hoped it would,” says Yana Collins Lehman, co-founder and executive board member of the Post New York Alliance. New applicants include a film starring Kristen Wiig and Guy Pearce, called Hateship Friendship Courtship Loveship Marriage. Outlays for post production projects vary but go as high as $2.5M.
The credit could go as high as 35% for work done upstate — where officials are especially eager to promote economic development. Since the program began in 2004, the state has issued $1.04B in tax credits for projects with an estimated economic value of $7.57B.
Related: TV Production Takes Another Big Hit Says FilmL.A.
Here’s today’s release:
Governor Andrew M. Cuomo today signed legislation that will strengthen existing incentives offered by the state to attract additional film post-production activity to New York.
Since the state began offering tax credits to support the film and television industry in 2004, producers have spent more than $7 billion in New York. The new law signed today is designed to expand state support by specifically focusing on attracting post-production work to communities in all corners of the state.
Read More »
An MPAA-commissioned study released by Ernest & Young today concludes that state film incentive programs are good for local economies – and not just if you work in the business. “The economic benefits to residents extend beyond the production activities themselves and include increased activity by suppliers to the film industry and increased consumer spending from higher incomes,” says Robert Cline, E&Y’s National Director of State and Local Tax Policy Economics and co-author of the Evaluating the Effectiveness of State Film Tax Credit Programs study. Thirty-seven states currently have film credit programs. The programs, with Louisiana, Illinois, Florida and Georgia among the most utilized by studios in recent years, draw from an estimated $1.2 billion in tax dollars annually nationwide. While providing few hard numbers, the E&Y report notes that some of the long term benefits a state with a film incentive program can enjoy are increased tourism, if the location ‘plays itself’ in productions, infrastructure development and seasoned local crews which can lead to increased tax revenues, spending and investment. Read More »