Financial Crisis IV: Will Wall Street meltdown sour film sweeteners?
As bad as the financial crisis is on Wall Street, there might be a silver lining (albeit a thin one) for southern California's film and TV industry.
The deepening recession is almost certain to put more pressure on states around the nation to slash spending. And that could mean less money alloted for tax breaks and other incentives that have lured scores of films and TV productions away from California, which does not have incentives to keep its homegrown industry here.
"I would imagine the states are going to have to take a hard look at what they're giving away," says Sheri Davis, director of the Inland Empire Film Commission, which coordinates film production in San Bernardino and Riverside. "They are going to have to scale back their incentives because the economy is going to demand that." (Of course, Davis' area could stand to benefit if such state cutbacks keeps production in Southern California and closer to home in Hollywood).
Spurred on by the low U.S. dollar, which has made filming abroad more expensive, states have been trying to outdo each other by offering evermore generous rebates and tax credits to producers. Michigan earlier this year upped the ante with a whopping 42% rebate on all production expenses. Mississippi and Georgia also recently adopted incentive programs, and in April, New York boosted the rebate on below-the-line expenses for qualified productions to 30%, up from 10%. (Los Angeles is still smarting from the move of ABC's "Ugly Betty" to the Big Apple).
But don't expect states to give up so easily, says one film incentive program administrator.
Anthony Wenson, chief operating officer for the Michigan Film Office -- which has attracted more than 60 productions to the state, thanks to its aggressive incentive program -- begs to differ. "We're all concerned right now, but the bottom line is we're optimistic that the program will continue because it has had a real positive impact on the economy."
-- Richard Verrier