Tossing Public Dollars at Movie Studios

Parent Cafe
1

Georgia is just the latest state to provide subsidies and other public incentives to the major movie studios in order to start or promote a local film industry. I saw a TV news report a few months back about how actually, relatively few new movie jobs are located in Hollywood. Vancouver BC has been cleaning Hollywood’s clock for years, but states like Georgia and Louisiana are literally throwing money at the studios. Why should the public subsidize these guys? How much ROI do these studio jobs actually provide? Georgia is now bragging about Ant-Man, which was filmed near Atlanta.

http://www.wsbradio.com/news/news/state-regional/ant-man-has-mighty-economic-impact-georgia/nm2RG/

2

I know Michigan was doing similar things before, but don’t know any details or how well it worked out or anything.

3

The same reason cities have offices that work with movie studios to try to get movies filmed in that city. There is a lot of revenue associated with a film crew coming in, bringing all their entourage (not necessarily the actors, but all of the many staff needed for set construction, props, food for the actors, etc.). And then they spend their money in that location – hotels for all these people, catering for all these people, buying local props, using local people for set construction, etc. Then, of course, there is benefit to having your city be prominently featured in a movie – this example is dated, but how many people would be running up the stairs of the Phila Museum of Art if Rocky hadn’t done so?

4

For the same reason that cities offer tax incentives to companies to locate there.Movies are a little different, because they are obviously not permanent (ie you shoot for a week, month, months, you are done), but there is a shot in the arm there, for catering, equipment rentals, background actors, hotels, and so forth people mentioned. Also, if you attract a film shoot there and then that gets others to think of it, you build up a cottage industry, video and film equipment rentals, lighting, other services, that cater to the film industry, and it becomes something that starts feeding itself. NYC has done that for years, with tv and video production, and there are whole businesses that make their living with film and tv and music video production, studios like Kaufman Astoria Studios, other studios in the old Brooklyn Navy yard, and so forth.

Then, too, there is prestige, having movie X (Let’s say Spiderman) shoot in your town/city becomes a tourism point. There is a whole industry in NYC where they take all these people out of town to see the locations where “Sex and the City” were filmed,for example. It is like getting a company to locate there, Atlanta proudly proclaims itself the headquarters of Coca Cola, Home Depot, NYC talks about the many corporate headquarters there, and so forth.

The basic idea is that any benefit the town pays for in terms of for example lowering the taxes the production company pays, supplying advisors and such, police protection, is more than made up for in new revenue. Sometimes that is true, other times locations get hosed, but for the most part they are willing to take that risk. Put it this way, compared to city build stadiums and such, this is a lot more lucrative for the towns and cities, sports stadiums end up costing cities money and rarely if ever provide the benefits they claim.

5

http://www.seattlemet.com/articles/2015/4/10/the-future-of-washington-film-is-in-the-legislature-s-hands-april-2015

There is some $$ data on WA in this article. Our tax incentives were capped at $3.5M and produced good returns. It sounds like a lot of money, until one notices that the next door neighbors offer more. And when said neighbors also happen to look like you, guess where the next movie “taking place in WA” will be filmed? As the result, we lose a lot of film revenue to our neighbors, because both Portland OR and Vancouver BC, with the Space Needle photoshopped in, can be made to (kinda) look like Seattle.

6

LA just voted to cap the amount of incentives at $180 million/year for 2016 - 2018. Thank goodness. It is a huge amount of money to give away (30 - 40% tax credit) and while I don’t doubt that the multiplier effect has had a good benefit, that happens with every business.

7

It was a 6 billion dollar industry in GA last year. And there is no sign that the tax credits are going to go away. Both Louisiana and NC altered/eliminated their tax credits recently and GA is benefitting even more.
I am not particularly a fan of tax incentives of any kind for corporations. We have a national economy and if a business moves from State A to State B, state B may benefit, but the negative impact on State A is a problem on a national level.
Even with the movie business, GA’s economy is lagging. In part, this is because there aren’t enough new businesses being started here.

8

Since this is a college forum, here’s an article about the broadcast relations director at Northwestern, who interfaces with the studios for movies to be shot on campus. I would assume most similar schools have something fairly similar.

My H served as an extra in a movie filmed there (he was supposed to lean against a tree and kiss a girl, which he was of course happy to do) and Rob Lowe filmed a movie literally underneath my dorm window.

http://www.northwestern.edu/magazine/winter2006/feature/movies.html

9

While oldest was at college, three films were partially shot on her campus.
Into the Wild, um something with Greg Kinnear and Morgan Freeman, and something else that I am totally blanking on.

10

It is terrible tax policy

11

Like I said, Vancouver has been exploiting its advantage for years. I remember that the Jodie Foster movie ‘Accused’ was set in Washington State, when in fact it was filmed in Canada. The last TV series I recall being filmed in the Seattle region was ‘Northern Exposure’ with Rob Morrow and John Corbett.

12

HI and many other venues try to attract films and TV shows and other employers to their areas as well. This is always a cost benefit analysis. The state/city/venue has to decide how much to offer for what benefit to their locale in terms of publicity, jobs, tourism, whatever. Some places have to offer more to attract the films/shows than others.

13

People should pay more to shoot in Hawaii! The light quality is so wonderful, especially where they film everything in the north of Kauai.

14

Well, they do have to pay for lodging, meals, etc. We have had quite a few films and some TV shows filmed in our state. Filming creates it’s own challenges–traffic, lodging, etc. It’s nice that they are filming shows and movies in different venues, spreading things out and not having so much done on sound stages and LA.

15

I live in a very small town in SE GA. In recent years we have had scenes for X-Men First Class, Anchor Man 2, and Magic Mike XXL filmed just a few miles from my house. To me, providing incentives to the film industry is like offering incentives to any other business. Hopefully the return will exceed the investment.

16

I loved Northern Exposure.
I remember seeing John Corbett & Bo Derek in matching outfits down in Fremont.( Seattle neighborhood)
We dont really do matching here that much so they stood out.

17

The Mayor of New York City recently announced that a new film studio will be built in the Bronx.

18

I know that NOLA has been working hard to promote themselves as a place to film TV and movies. It is one way to leverage all the empty properties, both residential and industrial. There is already a “creative class” there and it seems like a natural fit for many reasons. I haven’t read yet about the cost/benefit and am not a tax payer there so I have no financial stake, however. From the outside it seems like a smart thing to do for them if properly executed.

19

With a (now retired) H who has been a below- the -line film worker for 34 years, we have been through the cycle of film flight for some time. First it was Chicago, then NYC, then Vancouver, then NC and NOLA. He was able to follow a few productions but it’s been incredibly tough on the entrenched businesses that depend on filming here in LA. One thing that many of these states do not realize…that it’s not like luring some businesses that arrive after incentives, establish a manufacturing facility and then stay. Productions stop filming in your area the minute the exchange rate flops (as in Vancouver) or the tax incentives stop. LA is late to the party, politicians thought that there would movies would be made here forever, but now hardly any movies are made here in LA. I think it’s something like 20% of what it was 25 years ago. Even the soundtracks are now recorded in Eastern Europe and special effects are created and edited in China and Korea.

20

Hollywood tax breaks for the 1% of the 1%

… a favorite of the Democrats claiming to support the ‘working class’