State Assembly committee hears about entertainment industry

Friday, March 6, 2020

The California State Assembly’s Select Committee on Jobs & Innovation in the San Fernando Valley held its first hearing of 2020 on the state of L.A.’s entertainment industry at the American Federation of Musicians Local 47 headquarters in Burbank.

Hosted by 45th District (West SFV) Democrat Jesse Gabriel and attended by fellow members of the area delegation Laura Friedman (D District 43 – Glendale), Adrin Nazarian (D District 47 – South/Central SFV) and Luz Rivas (D District 39 – Arleta), the two-hour listening session heard from representatives of the California Film Commission, local film office FilmLA, performers union SAG-AFTRA, crafts union IATSE, Motion Picture Association (the major studios’ trade group) and others.

General takeaway was that show business is booming all over its traditional home and longtime world production centers, Hollywood and especially the Valley, thanks to a combination of California’s improved, $330 million per year production tax credit incentive and the explosion of streaming video-on-demand services with endless appetites for product.

“The entertainment industry and the creative economy are really part of our DNA here in California and in Los Angeles, and are central to the fabric of our community here in the Valley,” Gabriel said in opening remarks. “And also part of our iconic global brand. When people think of Los Angeles and the San Fernando Valley, they think of the entertainment industry.”

Gabriel added that he’d recently read a report that said there were more than 2.68 million jobs and $650 billion that flowed through the state’s creative economy annually.

The hearing was full of happy mentions that film workers – who headed to generously incentivized jurisdictions such as Georgia and Louisiana in the first decade of the century when production dried up around here – are back home and steadily employed in California. The one dark cloud over the local movie and TV scene, the lack of available soundstage space due to the streamer-driven production surge, was mentioned several times.

Asked by Friedman if we were losing production because of lack of soundstage capacity, FilmLA’s vp of integrated communications Philip Sokoloski noted:

“The search for available stage space is a now a global phenomenon. It’s not just Los Angeles that is facing this crunch problem, it is every other major production destination on the globe. So, to some extent it must be having an effect.”

More need for the purpose-built, teched-out facilities was a key point, coupled with acknowledgment that L.A.’s sky-high real estate prices, rising rents and housing shortage makes stage-building easier said than done.

“The boom in real estate has also created a scarcity for production parking,” Sokoloski added. “Where FilmLA is is headquartered in Hollywood, we have cranes to all four directions looking out of our office windows. That’s taken away very valuable surface lots that production crews relied upon for base camping. So, in very many ways, the real estate and development market in Los Angeles is affecting the base of production.”

Such concerns noted, the main point witnesses at the hearing wanted to get across to Sacramento was, essentially, give us more money.

After enumerating how the digital production pie is expanding series- and world-wide, the MPA’s VP and senior consul for state government affairs Melissa Patack urged that the tax credit be increased in order for California’s slice of the streaming bonanza not to shrink.

“Be mindful of how the industry is standing and growing, and make sure that California remains competitive,” Patack declared. “As has been said, the competition’s not going away. This is a great industry, these are great jobs, and elected officials in other jurisdictions, in efforts to diversify their economies, have said let’s attract these jobs.”

“I can’t think of anything more important that we can do in Sacramento than the tax incentive program for our industry,” echoed SAG-AFTRA government affairs & public policy senior director Kerri Wood Einertson.

While producers and studio executives have been saying they need higher incentives for some time, the growing pie metaphor was one of the least greedy-sounding arguments for increasing the amount of California tax credits beyond the current – and presumably locked-in through 2025, legislatively – $330 million per year.

“That was very helpful for us to hear,” Gabriel said following the event. “What I took away from this is, yeah, we’ve stabilized the industry, there are a lot of people that have come back to California, there’s good stuff going on. But the industry itself is growing so much with all of this content, that we may actually be facing a situation where we’re getting a smaller share of a growing pie.

“Obviously, we don’t want to lose these good paying jobs to other states or countries,” the Assemblymember continued. “So I think there’s going to be a willingness and an openness in the Legislature to consider what do we need to do to make sure California remains competitive. And that the Valley remains competitive, so we can keep people here.”