TV biz flees California

Pilots flying outbound despite tax plan

March 16, 2009

Pilot season is all over the map this year as the majors squeeze budgets and chase production incentive coin throughout the country and up north in Toronto and Vancouver.

Of the 39 hourlong pilots and presentations that have been ordered by the Big Four and CW, at least 20 are skedded to shoot outside California’s borders.

The pilot flight comes just as the Golden State has approved a $500 million, five-year production tax credit incentive program (Daily Variety, Feb. 20). But that program is seen by many in the TV biz as too little too late, and with too many strings attached.

Indeed, broadcast net execs are grumbling about the decision to limit California’s incentives for new TV series to hourlong skeins for basic cable (with episodic budgets of at least $1 million). Producers of gameshows, talkshows, news programs, reality skeins, docus and porn need not apply; those types of productions are not eligible for the credit.Below-the-line workers in Southern California were already bracing for a down year as networks slash development budgets and studios pull back on pic production. But the steady migration of pilot work to other time zones promises an even bigger hit to the local job market; then there’s the ripple effect on the local economy from those lost studio dollars and lost paychecks for local workers.

This year, Providence, R.I.; Baltimore; Boston; Atlanta; Chicago; Richmond, Va.; and Pittsburgh are among the unusual locales where broadcast net pilots are being produced, and all are in states that offer production tax-incentive carrots. Twentieth Century Fox TV has traveled as far as Prague for its “Da Vinci Code”-esque thriller “Masterwork” for Fox, though that decision was made as much for storyline purposes as anything else.

New York has lured a lot of TV production out of Los Angeles County over the past few years with its rich tax-incentive program, but the much-publicized uncertainty about the future of those credits for new productions, amid the state’s $14 billion budget deficit, sent studios shopping for lures in the other 48 states.
New Jersey, which recently greenlit its own incentives, has benefited from Albany’s paralysis, landing the NBC/Universal Media Studios drama pilot “Mercy” and CBS/CBS Paramount’s 9/11-themed drama “Back” (portions of which are also shot in Toronto).

One reason the California incentives targeted basic cable hours is that those shows are among the most likely to head across the border for the savings. California’s plan, which formally kicks in July 1, offers a 20%-25% tax credit on below-the-line expenditures (capped for features at $75 million).

“This bill very specifically targets those types of productions that have been leaving for years,” said a spokesman for state Assemblyman Paul Krekorian (D-Burbank), who sponsored the legislation.

As a way of taking aim at successful tax credit programs in other states, the plan does offer a 25% incentive to shows, broadcast or cable, that were previously produced in other states but relocate to California. But studio execs note that there are enormous moving costs that come with relocating a show, not to mention the hassle factor for stars and key production staffers.

Top brass at one of the Big Four networks recently asked state officials whether a pilot shot outside California would qualify for the credit if it relocated to the state for its regular episodic production. The answer was no.
Biz insiders with an interest in keeping production in California say they’re frustrated by the notion in Sacramento that a tax incentive program is a giveaway to Hollywood. Studies of programs in other states have shown that film incentives more than pay for themselves in generating tax revenues that wouldn’t otherwise exist, plus they drive spending in local businesses not directly tied to showbiz.
An Ernst and Young study of New York’s incentive program found that its production incentives will have generated $2.7 billion in tax coin between 2005 and 2010, of which $685 million will be refunded to producers through the credits (Daily Variety, March 2).With so many other states getting aggressive, California can no longer afford to take the film and TV production business for granted, said Paul Audley, prexy of the FilmL.A. permitting org. The stats aren’t in yet, but the anecdotal evidence is clear that filming days in L.A. will be down significantly this year during the January-April pilot season, usually a peak period for local lensing.

“What really happened is the doors opened a crack in California (with the incentive program). If they want it to have real impact, they need to open the door a lot wider,” said Audley. “The (state) legislature needs to recognize that production has just gone from this state. What’s left will be gone unless they do something to help preserve it. We are in grave danger of losing the business.”
Net and studio execs have become adept at monitoring the status of productions from afar through digitally delivered dailies and other tech tools, though many admit that in a perfect world they’d prefer to have their productions closer to home. Dramas are typically the projects to travel because they cost so much more than half-hours, but this year ABC and NBC have a handful of single-camera laffers set up in other cities.

At the same time, for pilots ordered to series, execs admit it can be a struggle to persuade established thesps to relocate to off-the-beaten-path locales, so there is sure to be some pressure on shows to settle down for episodic production in more cosmopolitan locations.

Canada, with its local production incentives and currency exchange-rate advantages, also made a big comeback as a pilot hot spot after cooling off in recent years for all but lower-budget broadcast and cable fare.

Warner Bros. TV is doing three pilots in Vancouver (Fox’s “Human Target,” ABC’s “V” and CW’s “Vampire Diaries”); CBS Par has four hours spread among Toronto, Vancouver and Montreal (CW’s “Light Years” and “A Beautiful Life”; CBS’ “The Good Wife” and untitled U.S. attorney drama). ABC Studios has ABC drama “Happy Town” and 20th Century Fox TV has its Fox drama “Maggie Hill” in Toronto.

Warners is also at work in Baltimore with its “Reincarnationist” drama pilot for Fox; CBS Par has CBS medical drama “Three Rivers” lensing in Pittsburgh and the Beltway-centered “Body Politic” presentation for CW filming in Richmond.
ABC Studios has two of its single-camera half-hours in Vancouver: ABC’s “No Heroics” and “Pulling.” Universal Media Studios has single-camera buddy cop comedy “Off Duty” pounding the pavement in Gotham and the single-cam romantic comedy “State of Romance” unfolding in Chi, both for NBC.

Overall, ABC Studios has been among the most active in exploring its options outside of Gotham and Canada. It has two flags planted in Providence with the ABC drama “Empire State” and CBS drama “House Rules,” both of which hail from Mark Gordon Prods., so it made sense to keep them close together. Beantown is home to ABC Studios’ ABC hour “See Cate Run,” while the studio headed south for an Atlanta backdrop to ABC’s untitled Daniel Cerone cop drama.

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