Study says film incentive is starting to reverse downward trend
As Gov. Jerry Brown considers whether to extend California’s 3-year-old incentive program, a report from payroll accounting firm Entertainment Partners has concluded that the state has lost 90,000 showbiz jobs and $3 billion in wages between 2004 and 2011 as a result of runaway production.
The internal study, based on its own payroll data and extrapolated to cover the entire industry, also found the Golden State’s share of total production wages for the U.S. declined from 68% in 2004 to 59% last year. About half of the production migrated to other states, the rest outside the country.
Ron Cogan, VP of marketing for privately held Entertainment Partners, told Variety the report’s data showed that California’s tax credit program has put the brakes on job losses and production leaving California over the past three years. The document — which has not been released publicly — also asserts that extending the program will have a positive impact on the state’s production level.
“Based on our data, if the California credit is not extended, we would expect the decline of California production jobs and wages to return,” said Mark Goldstein, president and CEO.
The conclusions are similar to those of reports by such entities as the Los Angeles County Economic Development Corp., which was paid for by the Motion Picture Assn. of America. Cogan said the data from the Entertainment Partners report, which was not subsidized by an outside entity, was first shared in May with the MPAA and then in recent weeks with Brown’s office once the California Legislature approved bills to extend the incentive program for two years at $100 million a year.
“We were gathering the data for own internal purposes and the MPAA got wind of it,” Cogan said.
Currently, California provides $100 million in annual tax credits for productions, but the 25% credit is smaller than many other programs, and demand far exceeds supply, with 28 projects selected by lottery out of more than 330 in June. The state’s Legislative Analyst Office said in June the program benefits were not generating enough economic activity to make up for the decline of tax revenues — a conclusion widely disputed by program backers.
Brown has until the end of the month to sign or veto the legislation.
In Hollywood, offlot production edged down 0.2% in the second quarter as TV slid 15.4%, features gained 9.1% and commercial activity jumped 28%, according to figures from permitting agency FilmL.A. Weekly figures disclosed Tuesday showed overall production off 19% last week to 600 days, with features plunging 46% to 90 days and TV shooting down 30 days to 394.
Reality TV — now a mainstay of L.A. TV activity — took the biggest hit, falling 97 days to 120. “Private Practice” was the most active TV shoot with eight days as “Parenthood,” “Raising Hope,” “The New Normal” and “Top Shot” also posting offlot permits.
In features, “Come Back to Me” was the most active with a dozen days, filming near Plum Canyon Road up in the unincorporated part of L.A. County, and “Double Decker” with 10 days.