Thursday, August 16, 2012

Economic Downturn, High Taxes Hurt Hollywood as TV Production Joins Film Exodus

California's so uncompetitive that even the basic core of the state's historic entertainment industry is looking for more fertile pastures.

At the Los Angeles Times, "Los Angeles losing the core of its TV production to other states":
The five broadcast television networks will be rolling out 23 new one-hour dramas for the upcoming season. That would normally be good business for Hollywood's hometown industry — with bookings for soundstages and plenty of work for the costumers, camera operators and caterers needed to put a show on the air.

But not this year. Just two of the 23 new fall and midseason shows will be shot in Los Angeles County, as cost-conscious producers seek tax-friendly production havens in New York, North Carolina, Georgia and other states.

The exodus has been going on for years, especially in feature film production. But television dramas such as"CSI,""Criminal Minds"and"Desperate Housewives"have long been anchors of Los Angeles' entertainment economy, helping to offset the decade-long slide in moviemaking. One 22-episode-a-year network series has a budget of $60 million and generates 840 direct and indirect jobs, according to the Los Angeles County Economic Development Corp.

That economic bang is beginning to fizzle. Fewer than 10% of new network dramas this season are based in Los Angeles, down from 50% in 2010 and nearly 80% in 2005.

"The loss of hourlong dramas is very significant," said Kevin Klowden, director of the California Center at the Milken Institute, noting that a typical drama shoots for eight to nine months, compared with just six to eight weeks for a film. "This is the heart of television production. If this continues, you're going to see a direct impact on the employment base of Los Angeles."

Though L.A. still hosts the bulk of new half-hour comedies and reality shows, dramas are more prized because they use bigger crews and have bigger budgets. That translates to more spending in the local economy....

New York had a record year for TV production last year and is on track to repeat in 2012. More than half a dozen new fall and midseason network dramas are expected to shoot in New York this season, including the CW's"The Carrie Diaries,"CBS'"Elementary" andABC's"666 Park Avenue."

At least seven new broadcast dramas will be shooting in Canada, includingABC's"Zero Hour," in Montreal, and "Hannibal" and"Beauty and the Beast,"both in Toronto, which also hosts the new drama "The L.A. Complex," about a group of actors trying to make it in Hollywood. Other new dramas are being filmed in North Carolina, Georgia, Hawaii, Pennsylvania, Massachusetts and Tennessee.

To be sure, creative reasons also factor in the decision-making. It made sense to shoot"Dallas"in Texas because the story is based there. But tax credits offered by Texas were also important, said Michael Robin, an executive producer on the series, who is also a producer on the new cable crime drama "Longmire," which is set in Wyoming but filmed in New Mexico, partly to take advantage of tax credits.

"The cost of producing these shows goes up every year, but the bottom line doesn't," said Robin, who is also producing the new cable drama"Major Crimes"locally. "The tax credits help close the gap."

"The reality is, as long as Sacramento continues to balk at having real incentives, we're going to continue to lose the most lucrative forms of television and film production," said Paul Audley, president of FilmL.A. Inc., the nonprofit group that handles permits for the city and county. "We're losing tens of thousands of jobs to New York."