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Hollywood losing its spot at the top of the movie-making roster


(Reuters) - Three days before the Oscars, the Los Angeles film czar and a think tank delivered some damning news to Tinseltown: Hollywood's status as the home of American film and television production is threatened because places like New York are offering better financial incentives to studios.

The study of employment and production data released on Thursday by the Milken Institute, an economic think tank, says California has lost tens of thousands of entertainment jobs to New York and other U.S. states in the past decade, and film and television productions with them.

While it may be one of the best years for high-quality film in recent memory, with nine strong films nominated for the best picture Oscar, just one of the nine was filmed in California.

Ken Ziffren, a veteran California attorney recently appointed as Hollywood's film czar by the mayor of Los Angeles, said the report showed Hollywood was in a "bad spiral," both in terms of jobs and productions leaving California.

Ziffren repeated a call for an expanded California film and tax credit, as did the Milken report - an issue that is politically controversial.

Proponents say it is vital to keep middle-class jobs and film production in the state. Opponents say wealthy Hollywood studios don't need another tax break and question whether further financial incentives will produce a net gain in jobs and revenue.

The report by the Milken Institute, headquartered in Santa Monica, California, but with a national and international perspective, said California lost 16,137 film and TV industry jobs between 2004 and 2012, based on U.S. Labor Department statistics.

During the same period, the report said, New York state gained 10,675 entertainment jobs.

"California is losing film and television productions to New York and other states," the report said. "The data shows that other states are being more effective in using their incentives to bring in new productions and create jobs."

The report said the loss of jobs was particularly troublesome because it represented the exodus of middle-class wage earners with high pay, an average of $98,500 per person, and businesses that thrive on the movie industry such as caterers.


California has a tax-credit program, but essentially only productions with budgets of $75 million or less qualify for the rebate of 20 percent to 25 percent.

Proponents of legislation under consideration in California want the incentives to cover big-budget movies, as well as television pilots and dramas.

New York offers tax credits of between 30 percent and 35 percent and allocates more money - $420 million annually - out of its budget to give incentives to film and television production there, roughly four times what is awarded in California.

Other states such as Louisiana, Texas and New Mexico have also drawn jobs and production from California in recent years through tax credits.

The Milken report says that production in California hit its peak in 2004, when 128 films were made there, while 50 were filmed in New York. In 2012, other states offering incentives were involved in 142 films, compared with 104 in California.

Of the nine movies nominated for best picture Oscar on Sunday, only "Her," the science fiction romantic drama starring Joaquin Phoenix and Scarlett Johansson, was made in California. It had a relatively low budget of $25 million.

(Editing by Mary Milliken and Jan Paschal)

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brothermac1 March 01 2014 at 1:07 PM

Remember when businesses (including film producers) made location decisions based on the merits of the proposed locale?? Nowadays, it's all about which state/city will give them the most money to line their already fat pockets. Disgusting I think.

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mshrug March 01 2014 at 2:12 PM

A little taste of "income equality" without a job.

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companyoflosers March 01 2014 at 2:10 PM

people who want to work in film dont want to have to relocate to California where everything is so expensive to have a job. other locations like Florida and New York and even Texas are starting to see their own film studios pop up all over. besides with the advancement of special effects technology, you don't have to build entire sets to appear on location. all those pre-built sets in hollywood will probably go unused now. best part is you dont have to pay ungodly amounts of money to live where your film job is anymore.

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gryfrei March 01 2014 at 1:53 PM

Who cares what the film industry is producing anyway? Aren't we all tired to the mediocrity of anything original and the bad remakes of anything decent?

Flag Reply +10 rate up
zzyxx March 01 2014 at 1:46 PM

follywood lobbied for higher taxes in california ...then when we got them they took their business out of state to cheaper locales. .......follywodd filled with overpaid over ego goofballs

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pd102a March 01 2014 at 2:11 PM

In this day and age, if you want to make a film with a locale that is supposed to be New Hampshire, you go to New Hampshire to film it. Every state has some facilities to handle film making and transportation these days is very accommodating to get the job done. If you are doing a jungle film, then you go to a real jungle, not some make-believe sound set that everyone can readily see is fake. And let's not even mention CG graphics and it's contributions to film making.

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Abe March 01 2014 at 2:00 PM

I do not understand this country anymore everythig

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1 reply
jfxhagen341 Abe March 01 2014 at 3:02 PM

To understand the country, look at the GREED !

Flag Reply +4 rate up
geo1284060 March 01 2014 at 2:42 PM

I'm glad that other states are getting more film business. I grew up in the NY area in the 70's and 80's, and we felt inferior to California back then. Seeing TV shows like Chips, Emergency, The Fall Guy, The A Team, Six Million Dollar Man, V--The Miniseres & TV series, etc. Now, the business of films, TV & late night is coming back to the East Coast.

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kcysr March 01 2014 at 3:19 PM

Opponents say wealthy studio's don't need anymore tax breaks. But that does not really matter to the studios because if they can operate for less or get tax breaks somewhere else and make a larger profit they are leaving.

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1 reply
fernandezarthr kcysr March 01 2014 at 4:00 PM

...and don;t forget the Communist Unions,.........the cost is just not economical,.....look at Detroit!!,.......

Flag Reply +2 rate up
Abe March 01 2014 at 1:59 PM

Every thing R

Flag Reply +3 rate up
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