Industry Figures Paint Bleak Picture for L.A. Film and TV Production

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While job growth in the entertainment industry has been on the upswing since 2005, California has actually lost employment while other cities like New York have reaped the gains from increases in production activity.

That was one of the conclusions at the Hollywood Chamber of Commerce’s State of the Industry Conference on Tuesday in Hollywood, where a series of speakers and experts presented a generally sobering picture of the problem of production flight from the state and region.

FilmLA’s Art Yoon, presenting statistics gathered by the Milken Institute, said that since 2005, California has lost some 4,500 jobs, while areas like New York have added 13,000 positions. The Milken Institute’s Kevin Klowden plans to publish a full report on employment in January, but Yoon noted that the loss of employment has been especially notable in areas like one-hour network drama series and big budget feature films.

That dire sentiment was reflected in the comments of several speakers who participated in a panel on California’s incentive program.

Randy Baumberger, president of the studio group at Paramount Pictures, said that when the studio plans for production shoots, “L.A. is not even in the selection set some times.”

He and other speakers warned that the loss of jobs to other states with larger incentive programs was worrisome because some cities, like New Orleans and Atlanta, are building up their “production ecosystem,” including soundstages and a base of crew talent.

Eileen Ige-Wong, senior vice president of production finance at 20th Century Fox Television, noted that the differential in costs is significant between Los Angeles and other cities. A budget for a one-hour drama that is $3 million per episode in Los Angeles will be $2.5 million in North Carolina and $2.4 million in Louisiana. The latter states have had more aggressive incentive programs.

Advocates of expanding California’s incentive program are preparing for a legislative push that is expected to focus on expanding the eligibility to network and premium cable dramas as well as movies over $75 million.

But Amy Lemisch, executive director of the California Film Commission, was blunt in what it would take to make the state more competitive. “We just need a bigger pot of funds,” she said,. California provides $100 million per year in tax credits to producers, but “we run out of those funds in one day.”

Asked what the prospects were for convincing lawmakers to adopt such legislation, and to get Gov. Jerry Brown to sign it, she said, “I think we will get attention…I am hopeful we will be successful.”

Assemblyman Adrin Nazarian also added to the chorus calling for expanded incentives, but he also outlined some of the potential political pitfalls. Among them is the perception, particular prevalent in Sacramento a decade ago, that such incentives were bailouts to billionaires. And North Carolina, which has had a generous incentive program, is set to end it in 2015 after the newly Republican-controlled legislature questioned its benefit. He also drew some audible challenge from the audience when he said that he was “not completely convinced we need to match New York dollar for dollar” to remain competitive, and that a lesser expansion of the tax credits would be enough to convince producers to keep their productions in California.

Others noted that what is missed by such perceptions is that tax credits produce additional spending in their communities as well as jobs that have a multiplier effect.

The conference was held at Loews Hollywood Hotel, and sponsored by Variety and other companies.

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  1. Mary says:

    Actually Tomz…they pay the workers just fine, and then these well paid workers go out and spend into the local economy. Plus each production spends millions into small businesses (average 300-800 vendors per project), so unlike the corporate subsidies to build a Walmart, the film incentives are a direct spend into the local economy as long as they have the infrastructure in place to support it.

  2. tomz says:

    Bribery. that is all these incentives are. The rich accepting government bribes in order to spend less, pay workers less and make more profit for themselves.
    We not longer live in a capitalist society. We live in a corporatist/parasitic society where the rich extract wealth from the middle class through manipulation of law and taxation.

  3. Engineer's RIG says:

    They only have themselves to blame for this, they let this happen. California is a dump, its the worst state to do business besides its more than just tax incentives. Its quite ironic because runaway production actually put LA on the map no one had even heard of it a century ago, it was just some town in the Pacific Coast. The industry began in NYC and NJ but the primitive filming equipment of the day forced to faraway California where you could film because of the good weather however those days are gone, filming is more advanced nowadays and LA is also a cesspool, overcrowded, polluted. Its best days are gone because they let this happen, they squandered what they had, they got complacent.

  4. locationguy says:

    It’s because location fees cost way more in LA than they do in North Carolina or Louisiana. Whether filming in a residential area or business area, locations demand high fees, and neighbors come with their hands out demanding to be paid too. I don’t see merchants extorting construction crews when they’re tearing up the road. Film crews are easy targets.

    • jwdreams says:

      Locationguy is 100% right. My job on shoots a lot of times, is to pay of the neighborhood. They all have their hands out and usually are pretty demanding. There are a couple of big-wigs that do the same. If they see you coming, they charge you 10-20k to be in front of their business. It really adds up.

      There are a lot of people in this city that don’t want us here, or at least think that we are not contributing to the city. I have neighbors come up and scream at me and tell me to go away. And when I try and talk calmly with them, they won’t have it. “Take it somewhere else” is usually the comment, They have no idea that our industry can directly effect what ever business they are in. If we go down 10%, that means 10% less for us to spend on their business. The thing I usually say to them is something like “Thank god we are working, and all these people are working, so that we can pay our bills this month.” That sometimes gets them to calm down a bit.

  5. occultology says:

    Fukushima is irradiating and poisoning the entire Pacific, West Coast included, ending the California Lifestyle and probably all else. Production will slowly end for the next 100,000 years or so. Pretty soon it will seem as if Hollywoodland never existed. The only reminders of this once legendary magical oasis will be the faded, flickering and ghostly images of “those things called ‘movies’ they used to make. A Hollywood Twilight. And the only ‘Stars’ that anyone will remember will be the Melting Starfish in Puget Sound (Google it), and the only “Films” will be the leftover, radioactive residue from the ‘All Living Things’ of the previous age.

  6. This isn’t just a problem for the Film & TV Industry, but for all businesses in California. The “2013 Best & Worst States For Business” survey on, chiefexecutive.net, ranks California dead last.

    I grew up in Los Angeles, and wouldn’t trade it for anything. But Los Angeles and California have been on a downward spiral for years. I am planning to move to Austin, Texas. Incidentally, Texas ranks at the top of this survey, and in several others that I have seen.

  7. EK says:

    Where was the LA Film Czar? Would have been good to have his take on all this, even if he is new to the job.

  8. Michael Jaffe says:

    There are at least three problems: 1) not enough money in the credit pool, Can’t plan anything as a result. I’d be there now if the credits were available. Instead I’m in Vancouver. 2) A way needs to be found to determine who is actually bringing production back from “wherever” and who would have shot here in any event. 3) The low budget IA contract available to a few select producers in Los Angeles should be made broadly available and the limits increased.

  9. Doug says:

    Funny how they quoted the head of the Paramount Studio Group talking about run-away Production, since Viacom took over Paramount in the mid 90’s That studio has chosen to close most of it’s Dept.s, sold off most of it’s inventory, and has laid off thousands of employees, choosing in stead to rent nearly empty stages and offices rather than continue to be a functioning Studio Facility. When they hired a Talent Agent as the Head of the Studio and he hired a back lot manager who was from Walmart, it went from bad to worse. It’s very sad what was lost forever there.

  10. Frank DeSade says:

    I couldn’t agree more. California is the WORST state in the U.S. to do business in. Citizens of other states refer to it as “The People’s Republic of California” comparing it to Communist country because of it’s many draconian laws and overtly hostile attitude toward business in general, and the film and television industry specifically. Why would anyone want to film here anymore? The unions have forced most independent film and TV companies to more either overseas or to right-to-work states. And as for filming in Los Angeles, this will not improve until FilmLA is either dismantled or overhauled. FilmLA is basically an organization which shakes down film and TV companies for ridiculous fees in order to enable them to shoot here. As long as FilmLA is in charge of issuing filming permits for Los Angeles County, don’t expect much filming to be done here, or any production companies that have left to return.

    • tomz says:

      That is pure FALSEHOOD. The unions have SAVED what jobs there still are. The greedy corporatist STUDIOS are responsible for all of this outsourcing, and THEY are behind the entire incentive program which was gained though massive lobbying. It has nothing to do with the unions. Wages for union employees have gone DOWN for the last 5 years in LA while studio profits are up, up, UP!

      And “right to work” is the biggest oxymoron even conceived of. What it really means is no workers rights, and that employers can fire, layoff or cut wages and benefits whenever they want using whatever excuse they want, or none at all. Its another weapon bought and paid for by billionaire special interests to undermine domestic worker protections.

    • Laurence Junior says:

      Are you a shill for the studios? Union wages in L.A. are the same as non union wages in N. Carolina and New Orleans, and much cheaper than the Union wages in New York. Which, incidentally GAINED 13,000 film jobs because of the tax rebates, not because of high L.A. union wages. Check your facts dummy. Right to work just means the right to work for less wages and tries to turn workers against each other so corporations can exploit them easier. FilmLA is an excellent organization that fights to keep production here. How successful would they be if they “shook down film and TV companies for ridiculous fees” in a state that already is losing production to cheaper locations? Your argument makes no sense.

  11. LA and California on the whole has been hemorrhaging entertainment jobs since the 1990s, through runaway production (notably Canada), higher production costs, and the dreaded NIMBYism, which forces productions into less populated and not-as-serviceable areas. Couple this with the business UNfriendly environment of California, and you have a literal Hollywood disaster film in the making.

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