Runaway biz rising

Commerce Dept. reports major prod'n loss

Runaway production of film and TV programs to foreign locales has accelerated, draining away billions of dollars in domestic production activity in recent years, according to a Dept. of Commerce report to be released today.

The report, dubbed “The Migration of U.S. Film and Television Production,” will detail the ongoing trend of productions heading to less expensive foreign sites, particularly on the telepic side. It cites one study showing domestic production of made-for-TV movies declined by more than 33% in the last six years, while production at foreign locations rose 55%.

“The most serious impact is in the area of made-for-television movies for U.S. networks and cable systems,” Secretary of Commerce Norman Mineta said in a statement. “However, the impact is far-ranging. Runaway film production has affected thousands of workers in industries ranging from computer graphics to construction workers and caterers. These losses threaten to disrupt important parts of a vital American industry.”

The new report also endorses the conclusions in the 1999 study from the Monitor Co., which found production leaving the U.S. was creating more than $10 billion annually in negative economic impact. According to the Monitor study, paid for by the Directors Guild of America and the Screen Actors Guild, 80% of runaway production was going to Canada.

“The Commerce report affirms what we already knew — that runaway production impacts the lives of Angelenos in a very real way,” Rep. Xavier Becerra (D-Calif.) said.

Incentives needed

Following the issuance of the Monitor study, the unions campaigned for incentives to lure producers back. California recently initiated a three-year, $45 million program to subsidize production costs, but similar efforts for nationwide incentives have been unsuccessful.

“Domestic production is the lifeblood of our entertainment industry,” said Rep. Mark Foley (R.-Fla.), chief of the House Entertainment Industry Task Force. “This report outlines the severity of the problem and underscores our need to work proactively to stem this growing tide.”

The latest statistics likely will become fodder for both sides in the upcoming negotiations between union actors and studios.

Producers probably will point out that costs in foreign markets are far lower than those for productions made under SAG contracts and contend that the union’s economic demands will drive away even more production. The Screen Actors Guild will contend that the increasing globalization of production creates the need for explicit contract language spelling out its jurisdiction over foreign productions.

SAG members are barred from working for producers who are not SAG signatories, but the union has been lax in enforcing that rule on overseas work. Kevin Spacey recently called on SAG members to refuse to work on non-union contracts (Daily Variety, Jan. 16).

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