Joe Chianese Leads Producers On Incentive Roadmap During Produced By
Leading a production incentive panel at the 2015 Produced By Conference earlier in June, Joe Chianese, EVP, EP Financial Solutions, informed the sold out room that legislative review for many state’s incentive packages was currently under review. With pending changes in the air, producers must stay on top of the ways changing legislation could affect their bottom line.
“Don’t rely on a book or a website. Talk to the commissioners. A change from 25% to 21%, which just happened in Ontario, can affect millions of dollars in your bottom line,” said Chianese. “Have people go out and have conversations with the commissioners to ensure this doesn’t happen.”
Joining Chianese on the panel, entitled “Production Incentives and the Fiscal Responsibility of the Producer” were Debra Bergman, Senior VP, Scripted Production, Fremantle Media, Shirley Davis, VP, Physical Production, Alcon Entertainment, David Glasser, COO and President, The Weinstein Company and Deborah Wettstein, CFO, Indian Paintbrush Productions. After highlighting a number of state incentive updates and recognizing many film commissioners in attendance from states as diverse as Maine, Utah, New Mexico and Ohio, Chianese asked the panelist to highlight basic aspects of incentives any producer should be certain not to overlook. Wettstein reiterated Chianese’s suggestion to ensure certainty before agreeing to shooting in any location.
“Fifteen to twenty –five percent is a crucial part of financing. It should be part of your homework to know your options,” said Wettstein.
Wettstein further highlighted the differences every jurisdiction has regarding the handling and submission of paperwork. She recommended the attendees know every aspect of the procedure up front before committing to any location.
Davis stressed the fact that international incentives, although often attractive, have a fluctuating exchange rate at their core. She also recommended producers do a side by side comparison of crew base, vendors and other production resources as they determine where to house their production. Often money saved with an incentive is spent on the resources needed to complete the project.
Chianese asked Glaser to describe the experience he had working on “Marco Polo” a Netflix production shot entirely in Malaysia. With its lucrative 30% cash rebate incentive; the country recently built a studio and was anxious to welcome foreign productions.
“It became a two-way street; they needed us as much as we needed the tax incentive,” said Glasser.
Noting a pitfall in the development of incentives has been a ‘if you build it, they will come” mentality, the production arrived to a studio that was lacking basic essencials, such as a light grid and qualified crew. “Marco Polo” was committed to Malaysian partly because its terrain was necessary for the setting and partly because its incentive was crucial to the completion of the project. What the production left behind will be invaluable to future filming. In addition to completing the studio, “Marco Polo” hired 800 people, trained at least 150 crew members, and put 52 million dollars into the local economy.
Chianese pointed out how filming on location has provided a great benefit to many US states as well. In Georgia, “The Walking Dead” transformed nearly bankrupt communities into now thriving metropolitan areas. Oklahoma worked diligently to secure “Orange: Osage County.” The benefit the film had on the economy helped the commission renew the state’s production incentive program. In Florida, “A Dolphin Tale” helped boost both the economy and attendance at the Clearwater Marine Aquarium where the film was shot. The government has allotted 50 million dollars for a grant in recognition of the benefit filming has had on the economy. Pointing out many press outlets continue to dispense negative publicity towards incentives – publicity that has affected incentive programs in states such as North Carolina, Chianese asked the panelists to share their thoughts on what can be done to ensure the survival of incentives.
It’s not ‘free money’” said Glasser. “We are making success stories through working in a partnership.”
Glasser used “Crouching Tiger, Hidden Dragon” as an example. Working with the tourism board of China, footage was shot of the locations used throughout production with the intent to lure tourists to those destinations. In addition to location shots, images of the film’s stars enjoying the locations were taken for use at airports and other tourist-heavy spots to encourage visitation.
Glasser suggested a person should be creating a comprehensive report that encompasses all aspects of the economic structure before, during and after filming to get a complete picture of how a production can have a significant, positive impact.
During a brief Q&A session with the audience, a few important incentives related points were re-iterated:
– Discuss the finer points of your project well in advance with a film commissioner so you will “know exactly who you are dealing with.
– Work with accountants who are knowledgeable about foreign exchanges and production incentives.
– Know the intricacies of the incentives well. For instance, Germany has a statue where, if you can’t find what you need in Germany, you can go to a neighboring country.
Lastly, Wettstein reminded producers that finances shouldn’t rule common sense when it comes to putting together the best product possible. “Think of it as what’s best financially versus what’s best for your film. It’s not always an option to make the sacrifice if the product suffers in the end.”
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