×
You will be redirected back to your article in seconds

MPAA Refutes USC Report on Film Tax Credits: ‘This is Academic Malpractice’

The Motion Picture Association of America blasted a recent study from University of Southern California that called into question the effectiveness of tax breaks for movie production.

A report led by Michael Thom, a USC assistant professor of public policy, found states that offered tax credits to lure the production of movies within their borders and away from major movie centers like New York and Los Angeles saw little fluctuation in growth of long-term employment. Thom’s study found that 26 states offering refunds to the production for portions of the money they spent in their jurisdictions saw no gains in employment, and that 18 states that allowed for the sale or brokerage of tax credits to another company in the state had no significant impact on wages.

Neither type of incentive “affected gross state product or motion picture industry concentration,” the report noted.

Now the film industry’s lobbying group is countering those findings with its own analysis, which found “the study contains a number of fundamental scientific flaws, including poor data selection and failure to account for different size programs across states, which render its conclusions invalid.”

“It is troubling and without excuse that such a false and misleading study, without statistical and intellectual foundation, would be recklessly promoted by an otherwise respected educational institution such as USC. It severely tarnishes the reputation of the university as well as the academic credentials of the author, USC assistant professor Michael Thom,” said Vans Stevenson, the MPAA’s senior vice president for state government affairs. “This is academic malpractice, designed to make a provocative statement rather than offer sound policy analysis.”

The MPAA contends that Thom used a broad category of jobs data, which took in jobs that are not tied to production, such as ticket-takers and sound recording engineers.

“It’s a narrow focus and a very unusual result,” said Julia Jenks, who wrote the MPAA’s rebuttal. “The design is very flawed.”

Thom issued this response on Wednesday:

“The film subsidies study, ‘Lights, Camera but No Action?;’ was published in a peer-reviewed journal, The American Review of Public Administration after two rounds of rigorous, double-blind review. That means that several academic researchers who are experts in the field evaluated the data, analysis and methodology, and determined the study to be credible and the analysis valid for publication. This study further validates previous work by other academic researchers, think tanks and state government auditors.

“Through my research, I found that there were in fact short-term benefits to state film incentives, such as temporary wage gains and obviously some commerce. However, I also found that the incentives had no sustained impact on wage growth and little effect on jobs and economic growth. The peer-reviewed analysis that I conducted accounted for differences in spending across the states and over time.

“For a second study published recently by the journal American Politics Research, I examined why states kept or terminated their incentives from 1999 to 2015. I found a half dozen states ended the incentives as the Great Recession eased. States that slashed the incentives already had spent very little or were skeptical that the film incentives program wasn’t working.

“I have included in my research recommendations for best practices if states choose to start or continue to offer filmmaking incentives. For example, before adopting or renewing such a program, states should hire third-party researchers to conduct multiple analyses of the economic benefits and compare the results. I also recommend that states cooperate with each other on program design to minimize risks for taxpayers and more importantly, to safeguard their programs from potential malfeasance.”

In an interview, Stevenson said that Thom was “standoffish” when the MPAA approached him to discuss the paper.

“I find it extraordinary that a study would go out and be peer-reviewed and not recognize that the basic data they’re using are wrong,” he said. “You would think when you put the USC name on a study they would take more care.”

Stevenson argued that Thom could have obtained better jobs figures from payroll companies that work in the film business or from unions.

“They’re looking at a hometown industry,” he said. “There’s all kinds of data that’s been ignored.”

More Film

  • Atlantics

    Netflix Snags Worldwide Rights to Cannes Winners 'Atlantics,' 'I Lost My Body'

    Mati Diop’s feature directorial debut “Atlantics” and Jérémy Clapin’s animated favorite “I Lost My Body” have both been acquired by Netflix following wins at Cannes Film Festival. “Atlantics” was awarded the grand prix while “I Lost My Body” was voted the best film at the independent International Critics Week. The deals are for worldwide rights [...]

  • Stan Lee, left, and Keya Morgan

    Stan Lee's Former Business Manager Arrested on Elder Abuse Charges

    Stan Lee’s former business manager, Keya Morgan, was arrested in Arizona Saturday morning on an outstanding warrant from the Los Angeles Police Department. The LAPD’s Mike Lopez confirmed that the arrest warrant was for the following charges: one count of false imprisonment – elder adult; three counts of grand theft from elder or dependent adult, [...]

  • Moby attends the LA premiere of

    Moby Apologizes to Natalie Portman Over Book Controversy

    Moby has issued an apology of sorts after writing in his recently published memoir “Then It Fell Apart” that he dated Natalie Portman when she was 20 — a claim the actress refuted. “As some time has passed I’ve realized that many of the criticisms leveled at me regarding my inclusion of Natalie in Then [...]

  • Bong Joon-ho reacts after winning the

    Bong Joon-ho's 'Parasite' Wins the Palme d'Or at Cannes

    CANNES — The 72nd edition of the Cannes Film Festival wrapped with jury president Alejandro González Iñárritu announcing the group’s unanimous decision to award the Palme d’Or to South Korean director Bong Joon-ho for his sly, politically charged “Parasite.” Following last year’s win for humanistic Japanese drama “Shoplifters,” the well-reviewed Asian thriller represents the yin [...]

  • Invisible Life Brazilian Cinema

    Cannes Film Review: 'The Invisible Life of Eurídice Gusmão'

    A “tropical melodrama” is how the marketing materials bill “The Invisible Life of Eurídice Gusmão.” If that sounds about the most high-camp subgenre ever devised, Karim Aïnouz’s ravishing period saga lives up to the description — high emotion articulated with utmost sincerity and heady stylistic excess, all in the perspiring environs of midcentury Rio de [...]

  • Best Movies of Cannes 2019

    The 10 Best Movies of Cannes 2019

    The Cannes Film Festival is too rich an event to truly have an “off” year, but by the end of the 72nd edition, it was more or less universally acknowledged that the festival had regained a full-on, holy-moutaintop-of-art luster that was a bit lacking the year before. It helps, of course, to have headline-making movies [...]

  • Aladdin

    'Aladdin' Soaring to $100 Million-Plus Memorial Day Weekend Debut

    Disney’s live-action “Aladdin” remake is on its way to a commendable Memorial Day weekend debut with an estimated $109 million over the four-day period. The musical fantasy starring Will Smith and Mena Massoud should uncover about $87 million in its first three days from 4,476 North American theaters after taking in $31 million on Friday. [...]

More From Our Brands

Access exclusive content