State Study Cites Costs, Red Tape for Loss of Film Work

It’s no more costly to field a film production crew in Los Angeles than in Miami or Chicago, but California loses $2.9 billion a year to other cities and countries that continue to siphon away film and television production.

A major new study blames this “runaway production” on governmental red tape, California’s failure to aggressively promote its unique filming locations and, to some degree, higher costs than in cities such as Vancouver, Canada.

But the report maintains that the state could recapture $748 million of the lost business if filming conditions were more favorable.

Still, California remains by far the leading state for film industry creative talent and production services, according to the study, which is the first comprehensive look at the impact of film making on California’s economy.

The state now controls about $4.7 billion, or 61.7%, of domestic film, television and commercial expenditures, according to the study conducted by the KPMG Peat Marwick Main & Co. accounting firm for the California Film Commission and the California Chamber of Commerce. The spending created an estimated 235,000 jobs in California--about 2% of the state’s total and 6% of Los Angeles County employment.

The report gave no comparable overall figure for previous years. But it noted that California once retained 80% of feature film expenditures but now gets only 70%, and the state has “lost a number of (television) series and a host of movies made for television, to other states and countries.”

The study was released Tuesday by Lisa Rawlins, director of the California Film Commission, who said she “wasn’t surprised” by the study’s findings.

“There are some productions we cannot turn around but there’s also a good chunk of it out there that we can,” Rawlins said in a speech delivered on behalf of Gov. George Deukmejian, who was unable to make a scheduled appearance at the Beverly Wilshire Hotel because he was ill. “It’s important to the prosperity of California that the great Hollywood dream machine be kept in high gear. We are keenly aware that our state is not alone in wanting your business.”

The report recommends that California officials market the state’s remote locations more heavily, work to reduce local municipal fees and encourage Hollywood labor unions to grant wage concessions.

The California Film Commission was formed in 1985 by Deukmejian to halt the so-called runaway production described in Tuesday’s report. Deukmejian was concerned the state was losing millions of dollars as movie, TV and commercial producers were lured to other locations. With a staff of 12 and a budget of $780,000, the commission is the largest in the country.

Although California’s varied climate offers everything from snow-capped mountains and gritty urban streets to rugged coastlines and desolate desserts, film business has migrated to lower cost areas like Chicago, Dallas and Vancouver, as well as foreign cities and areas that have labor costs equal to Los Angeles, such as Miami.

“Producers come here because they are able to get a good rate of exchange with the dollar and . . . they appreciated the attitude here, which is still service oriented and not jaded like in other places,” said Dianne L. Neufeld, director of the British Columbia Film Commission in Vancouver.

The 54-page study examined only feature films produced and filmed in the United States, national prime-time television shows and all nationally aired commercials. It excluded regional productions, documentaries, industrial, sports or educational films and music videos.

COMPARING LABOR COSTS

Labor costs as a percentage of what the same costs would be in Los Angeles. Figures are based on “regular scale wages” for a typical television production.

DALLAS: 99% MIAMI: 100% CHICAGO: 99% VANCOUVER, Canada: 66% NEW YORK: 130% Source: California Film Commission

WHERE FILM DOLLARS ARE SPENT

Total amount spent to produce feature films, television programming and commercials, in millions of dollars

California Category U.S. California as % of total Feature film $3,933.6 $2,629.6 66.8% Television 1,592.2 1,392.9 87.5% Commercial 2,048.5 650.4 31.8% TOTAL $7,574.3 $4,672.9 61.7%

Source: California Film Commission