In this week’s column, California Sports Lawyer® CEO, Founder, and Managing Attorney Jeremy M. Evans writes five ways the California Legislature and local leaders can reverse course and bring entertainment film production back to the Golden State.
There might just be another golden age in Hollywood. One can hope.
You can read the full column below. (Past columns can be found, here).
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California since the late 1990s has been a haven for high taxes, expensive gas for vehicles, and generally a difficult place to do business because of the red tape in Sacramento and our local communities. Depending on the elected city council members, some cities operate more efficiently than others. Voters should be demanding more of their politicians elected to represent them.
One area of concern, albeit not the most significant problem in the Golden State, is in the loss of entertainment production for film and television in California. California is still the entertainment capital of the world based on total deals and dollars, however states like Nevada, Georgia, Texas, Oklahoma, and New Mexico are quickly taking the business from California. What is fascinating is that California still has one of the largest economies in the world despite its ineffective and inefficient government. Imagine if the state actually ran efficiently.
Unfortunately, California majority party leaders have done the opposite to attract business with bad business practices. California has discouraged film production with inconsistent program incentives and the longest Covid lockdowns in the state did not help. It seems that every few years there is a shortage of tax incentives for production or a new piece of legislation has to be approved to keep the status quo. Uncertainty is not a place to do business; it is a place to find the nearest exit unless you are betting on the downturn.
California is also excessively expensive to do business and the processes take too long. California’s infrastructure is also in bad shape, not to mention the largest homeless population in the country. Again, the aforementioned circumstances are not welcoming to new business or residents for that matter. California needs to stop looking at business as a disease, and start solving the problems in the state that are clearly moving it away from its Golden State brand. One idea would be creating an inviting environment to induce more businesses and entertainment production to stay (for more employment and tax dollars) and investing in Hollywood and greater California.
In response to California leadership’s ineptitude, states like Georgia, Texas, Nevada, New Mexico, and others are doing what competition does best, compete. California should get wise about the significant loss of business in general. Specific to entertainment film production, California would be wise to implement some of the following strategies.
Competitive and Flexible Tax Incentives
States like Georgia and New Mexico have successfully attracted major productions by offering substantial, transferable, or refundable tax credits. For instance, New Mexico provides a base credit of 25%, which can increase up to 40% with additional incentives for using local facilities and hiring in-state crews. The tax credits are also guaranteed for longer or at least there is predictability in doing business. Your government should be running less interference and focusing on the collection of taxes and fees from all the great business returning.
Investment in Infrastructure and Studio Development
Developing state-of-the-art production facilities can make a state more appealing to filmmakers. Illinois, for example, has seen proposals for significant studio projects, such as the $62 million film studio in Wood River, aiming to transform existing spaces into production hubs. Nevada and Mark Wahlberg have done the same. Georgia and Texas have made their states “Hollywood South”. California needs more and better infrastructure and film production projects would be a great place to start getting back to business.
Streamlined Permitting and “Film-Ready” Programs
Implementing programs that prepare municipalities for film production can expedite the filming process. New Jersey’s “Film Ready” program certifies towns to handle productions efficiently, attracting more projects to the state. California tax incentive program is helpful, but it is not as efficient. California should learn from other states on how to do business more efficiently, again.
Support for Local Workforce Development
Offering incentives for hiring local talent and investing in training programs ensures a skilled workforce is available, reducing the need for out-of-state hires and boosting the local economy. California has long been a labor friendly state. The politicians in Sacramento and Los Angeles should be lining up to implement proposals to welcome more employment opportunities back to Hollywood and beyond.
Content-Neutral Policies
Maintaining neutrality regarding the content of productions encourages a diverse range of projects. Avoiding content-based restrictions ensures that filmmakers feel free to tell varied stories without fear of losing incentives. California is far too political and restrictive, as is Hollywood. Content should be based on what filmmakers want, not what they are pressured to film. Furthermore, Hollywood should also be focused on what the people want inside and outside of California, which means more business. After all, this is the entertainment business—audiences should be entertained.
With the above, there might be some significant changes to doing business in California. There might just be another golden age in Hollywood. One can hope.
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About Jeremy M. Evans:
Jeremy M. Evans is the Chief Entrepreneur Officer, Founder & Managing Attorney at California Sports Lawyer®, representing entertainment, media, and sports clients in contractual, intellectual property, and dealmaking matters. Evans is an award-winning attorney and industry leader based in Los Angeles and Newport Beach, California. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.
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