Ray Arthur, who's one of my frequent e-mailers here, is a Film Commissioner for the Ridgecrest Regional Film Commission, He writes the following in response to my wondering if it's worth it for Los Angeles to surrender its streets to location shooting…
The short answer is, yes, it's worth it!
Since 2000 we've seen a steady stream of film production leave not only the Los Angeles basin but the entire state of California. It started with modest incentives from Canada and has developed into multi-leveled cash giveaways and tax credits from a dozen countries and 26 states, all successfully gaining for a piece of the Hollywood pie. An easy way to understand country tax credits, provincial tax credits, discount crew wages and, at times, the dollar exchanges that create the total Canada incentive package is: for every three MOWs, movies of the week, that ABC produces in Toronto…they get the fourth one free. Estimates from FilmLA (L.A. city/county film commission and the California Film Commission) show that in the past five years the state, primarily L.A., has lost 10,000 jobs and $30 million in revenue from runaway production.
Part of the problem is that Governor Schwarzenegger has been unable to create a California film incentive package. AB777 languished in the State Assembly for two years and died a quiet death last spring. Why? For two basic reasons: the promoters of the bill/package were unable to overcome the label that it was a tax break for Steven Spielberg and Tom Cruise. This was entirely false in that all the credits were for "below the line" crew, i.e., others than the 10,000 who lost their jobs. Secondly, the Assembly & Senate wouldn't consider giving a tax break JUST to film. The Republicans said, "If it's good for film, it's good for aerospace, high tech, etc." Then the Democrats said, "If it's good for aerospace and high tech, it's good for agriculture and manufacturing." Without a multi-industry buy-in, which was cost prohibitive, it was dead. While all of these industries have their problems, none have the specific type of problem the film is battling.
The L.A. Times editorial notes that, "the State doesn't charge a dime…" And that's true, because that's about the only incentive the State has. The editorial also uses the number $2.6 million a day as revenue from a feature film. I've never seen that number but I really like it!!! I think that was a total, not daily, estimate. The CFC is currently revising (read: COLA update) estimates for daily on location film production. The $$ number that most film commissions throughout the State of California use for an average size feature film, and Die Hard 76 is not average – it's huge, is $46,000 per day. That's actual disposable income into the community in which they're filming. For Die Hard, multiply that, not just by the number of days they're tying up LAX traffic but, by the total number of shoot days they're in L.A. Let's say that's 60. That's $2,760,000. And that's before the "3 to 7 times" multiplier that economists use for local disposable income. Also, that's JUST the dollars that are left in the community. Had Die Hard shot in Toronto you would have lost that income, plus the wages of 75% of the crew on that film who would have been replaced by Canadians. $2.76 million is a number that reasonable people will disagree as to the level of inconvenience with which a neighborhood/city should endure.
It's easy for me to sit in Ridgecrest, by God, California, with my $3 million in filming (down from $7 million by the way) and suggest to several million Angelenos that they look at the big picture. That the inconvenience is worth the sacrifice. But when you add the negative economic impact of the past five years, with the inability of the State legislature to take this problem seriously, I submit that is the case.
One could raise the question, "Why can 12 countries and 26 states produce quality feature films for 25% to 40% less than Hollywood?" But that's another discussion for another time.
As I read the Times editorial, they were not arguing against the concept that the government should make concessions, or that the community should endure some inconvenience to keep productions in town. They were suggesting that this particular trade-off probably didn't make sense. Since it's impossible to predict and quantify the negatives, I don't know how someone could say with any certainty that the losses and problems won't outweigh the benefits on this one. Closing off access routes to the airport sounds like something that could really cause a lot of people a lot of woes…and I wonder where the airlines and airport merchants were on this one. Seems to me that if a lot of flights are delayed, or if a lot of seats go empty because passengers missed their planes, the airlines stand to lose a lot more money than the movie will bring into the local economy.
There's also the question of how many of those financial benefits will directly or indirectly reach those who are going to suffer so that Bruce Willis can dodge fireballs on the 105 freeway. And I think the Times felt there had not been sufficient "public input" into the decision of whether this accommodation should be made. I'll bet it was a done deal before most of those who will be impacted even knew about it and therefore had the chance to object.
It's possible that this is a good deal for the community, just as it's possible that the movie wouldn't have gone to Toronto or some other town if they didn't get every possible consideration. For a multitude of reasons, including a desire to use locations that would have been identifiable as Southern California, they might have opted to stay in town and spend even more here. Some very expensive movies do film here despite lucrative offers to go elsewhere.
I'd be curious to know what proposals, if any, the local film commissions have refused lately. There have to be some that looked like they'd do more damage than good. One hopes the new Die Hard movie won't turn out to be one of them…and maybe these projects need a little more public scrutiny in advance. I can think of a few businesses out that way that can't help but get harmed by having those streets closed off.
Thank you, Ray, for the perspective. I'm always amazed that I can write about almost anything on this site and hear from someone who knows more about it than I do. Not that there's any shortage of such people or topics…