Budget boost from out-of-state incentives allows high-end series to put even more money on the screen
Atlanta. Chicago. New Orleans. Wilmington, N.C. Austin, Texas. Albuquerque, N.M. Ireland, Hungary and Puerto Rico. These are among the locales that TV producers and actors have to be prepared to call home, at least temporarily, if they are fortunate enough to land a primetime drama series.
The sharp rise in the number of states wooing TV productions with lucrative tax incentive coin has cost California dearly in terms of its market share of primetime drama series lensing.
The Golden State is steadily losing ground in the sector that is the single-largest driver of long-term production employment in the biz — high-end drama shows that have the potential to run for years. This decline has occurred at a time when the overall number of hour-long series in production has exploded, thanks to the growing appetite for original programming on cable, and now even digital platforms.
The spread of production to far-flung spots around the country has become a fact of life for producers, who welcome anything that affords them more money to put on screen. Neal Baer, showrunner of CBS’ summer hit “Under the Dome,” knew going in that the show would likely lense far from Los Angeles. He was part of the decision to settle the series in Wilmington, N.C. in order to tap the infrastructure and labor pool built up during the past 15 years with shows including “Dawson’s Creek” and “Homeland.”
In the case of “Dome,” Wilmington is a great fit because its environs suit the needs of the show’s fictional small town of Chester’s Mill, as envisioned by “Dome” author Stephen King.
But even though the show’s writers room and post-production remains in Los Angeles, the impact of filming outside Hollywood’s homebase is not lost on veteran producers.
“It’s kind of like an organ transplant,” Baer says. “You know that somebody’s getting a new organ, but somebody also has to die. In this case that’s Los Angeles, and that’s not good.”
Producers are frustrated with the shortcomings of California’s tax credit program, not just in terms of the relatively small amount set aside for production rebates compared to other states, but also the limitations in the types of shows that are eligible. Not so long ago, it was only lower-budget series for cable and the CW that regularly set up shop outside of Southern California in order take advantage of production subsidies — usually in Canada.
But now the network-studio congloms play a kind of incentive sweepstakes with every show. In success, a TV drama series will employ 150-plus below-the-line staffers for four to nine months and have a strong ripple effect for local businesses with demand for everything from set construction materials to food for catering to hotel and transportation services.
Network execs say with so much money on the table, they’d be remiss if they didn’t investigate every possibility to gain financial support for a series. The growth of incentives competition coincided with a period of uncertainty for the studios in the backend value of shows as digital distribution and on-demand platforms sprouted up, raising questions about traditional syndication models. The big checks that Netflix and Amazon have handed out for off-network rights to shows have helped ease those concerns, but the intense focus on improving series profit margins from day one remains.
No city has been as aggressive in the past decade as Gotham, thanks to the coordinated efforts of local and state officials to build up its production base. The town that was once known as a bureaucratic nightmare for lensing is now home to a slew of series, not all of which demand to be shot in NYC.
The list of new shows on deck for the 2013-14 season includes CBS’ “Hostages,” NBC’s “Believe,” “Ironside” and “The Blacklist” and CW’s “The Tomorrow People.” New York City has further expanded its program by offering additional coin to shows that complete all post-production work within the city.
The wide availability of incentives is credited with helping make broadcast and cable networks more open to shows set in unusual locales. CBS’ new midseason drama “Reckless” is built around the sultry Southern charms of Charleston, S.C. The legal franchise revolves around the romance borne of the friction between a Yankee litigator and an oldschool local prosecutor.
The show and its Charleston setting was conceived by scribe Dana Stevens long before there was any thought of tax rebates. But once her script was picked up to pilot, the fact that South Carolina had a program and was ready to roll out the red carpet made it all the more attractive to the network. The state has further sweetened its incentive pot in the months since the “Reckless” pilot was shot last winter.
“The reason we came here was really the creative reason, but the tax incentive certainly doesn’t hurt,” says “Reckless” exec producer Ian Sander, a TV vet.
South Carolina has the potential to grow as a lensing hotspot, Sander observes, because of its distinctive look and easy access to New York, Miami, Atlanta and other production hubs.
But nets are also spreading out beyond North America in search of savings. NBC’s “Dracula” shoots in Hungary thanks to the influence of foreign co-production partners. CW’s costume drama “Reign” (Mary Queen of Scots as an angsty teen) is following the lead of numerous cable shows in originating from shooting in Ireland.
Primetime comedy series production remains a stronghold for Southern California. Only two of the 38 new and returning network half-hours on tap for the new season will shoot outside L.A. NBC’s “The Michael J. Fox Show” and Fox’s midseason entry “Us and Them,” both of which are in Gotham. Half-hour shows are big sources of production jobs, for sure, but they tend to be more stagebound and focused on standing sets compared to dramas.
Where drama series are concerned, there’s real drama for California. A report issued in July by the California Film Commission showed the number of hourlong scripted series shot up 48% between 2005 and 2012, or from 79 to 117 skeins, but the state’s market share plummeted to 34% of that larger pool of shows. In 2005, the state was home to 65% of all hourlong scripted series.
The biggest growth driver has been the expansion of scripted cable series, which shot up 277% from 2005 to 2012, or from 13 series to 49. California’s share of the market for cable dramas has inched up 17% during that period. But those gains are not enough to offset the plunge in its share of network TV dramas, generally the shows with the biggest budgets. In 2012, only 37% of network hourlong series were shot in California, compared to 89% in 2005.
The tax incentive programs California enacted in 2009 took special aim trying to hang on to basic cable dramas, given the growth of that sector. But because the legislation explicitly bars network and pay TV hourlong series from receiving incentives, producers have even greater motivation to look well past California for the most high-end shows with the greatest need for below-the-line hires.
Network shows are only eligible to apply for California incentive coin if they are already in production and agree to relocate from outside the state — and in applying for those funds they also compete with cable shows. Industry insiders say the decision to offer a carrot for shows to relocate is misguided, given the high cost of such a move and the disruption factor for cast and crew members. The state would be better off committing more dollars upfront to shows in the startup phase, insiders say. Since 2009, only four shows have tapped the program to relocate, and only one of those is still on the air: MTV’s “Teen Wolf.”
As the California Film Commission report observed, the flight of lensing “is especially dire for TV series production, given that producers are unlikely to film their first season in California without a reasonable assurance that tax credits will be available for future seasons.”
While California pols debate the issue of tax breaks for Hollywood, and economists question the returns from incentives across the country, producers in the trenches say the decisions always come down to simple math.
“It all boils down to how much money we can spend on our show,” as “Dome” executive producer Baer says. “We want more money so we can put it on the screen. That isn’t going to happen for us in Los Angeles.”
(Pictured: Stephen King visits the North Carolina set of CBS’ “Under the Dome.”)