 The Culver Studios By Richard Verrier
In an industrial yard behind Burbank's Bob Hope Airport, dozens of orange forklifts and 135-foot-high booms stand idle, gleaming in the afternoon sunlight. As recently as two years ago, the yard was largely empty because the equipment was busy being used to hoist cameras, rig lights and build sets for "Iron Man," "Get Smart," "The Curious Case of Benjamin Button" and other movies shooting throughout Southern California.
"I've been doing this for 25 years and I've never seen such a sustained downtime," said Lance Sorenson, president of 24/7 Studio Equipment, who recently had to lay off two of his drivers and has imposed three- and four-day workweeks for the rest of his 44 employees.
Across town in Culver City, at the landmark studio where "Gone with the Wind," "Citizen Kane," "The Adventures of Ozzie & Harriet" and "The Andy Griffith Show" were filmed, there's a similar story. Now an independent production facility known as the Culver Studios, the soundstage complex just lost one of its largest tenants, the syndicated game show "Deal or No Deal." That program will tape future episodes in Waterford, Conn., a suburban town known for its nuclear power plant, large state park and assortment of shops and family-owned restaurants. The chief draw: Connecticut's 30% production-tax credit.
"It's a huge blow to us," said James Cella, president of the Culver Studios. Others also have been hard hit by the outflow of production to other areas, known as runaway production.
At Modern Props, also in the Culver City area, nearly half the employees have been laid off, and those remaining are on 20- to 40-hour workweeks. John Zabrucky, the company's founder, thought he'd gotten ahead by opening a satellite office in Vancouver, Canada. But now so many states are offering tax incentives to film and television producers that he can't keep up.
Hundreds of small blue-collar businesses like these sustain Southern California's entertainment industry. Many are struggling amid a sharp drop in local film and TV production triggered by the recession, a rise in runaway production, and the fallout from a writer's strike and a yearlong contract dispute between studios and the Screen Actors Guild. According to the state Employment Development Department, jobs in movie and television production were down 13,800 in May compared with a year earlier.
On-location feature film production in the area has fallen to its lowest levels on record. Student films generated as much activity on the streets of Los Angeles in the first quarter of 2009, when only a few movies, including "Fame" and "Alvin and the Chipmunks: The Squeakquel," were shot there.
California's share of U.S. feature film production dropped to 31% in 2008 from 66% in 2003, according to the California Film Commission. That largely reflects a falloff in the Los Angeles area, where feature filming activity in 2008 was nearly half what it was at its peak in 1996.
Television production, which recently has been a more reliable source of jobs in the region, is also declining. A recent survey from FilmL.A. Inc. found that 44 of 103 TV pilots this year were shot in such disparate locations as Canada, Illinois, Georgia, New York, Louisiana and New Mexico.
More than 30 states have sought to outbid one another with tax credits and rebates aimed at luring productions away from California. Sacramento has responded with its first-ever film-tax credit program, but most analysts think the credits are too small and restrictive to have much effect.
"L.A. is at risk of losing a good part of one of its signature industries, just like it did with the aerospace industry in the early 1990s," said Jack Kyser, chief economist for Los Angeles County Economic Development Corp.
Few know that better than Cella, of Culver Studios. He previously ran Steiner Studios in Brooklyn, N.Y., and was tapped to run Culver in 2006 after a group of investors including Lehman Bros. acquired the 14 soundstages from Sony Pictures Entertainment for $125 million. But the studio's business took a big hit recently when NBC Universal and Endemol USA opted to move "Deal or No Deal" to Connecticut.
The show brought in more than $1 million in rental income to Culver Studios, Cella said, adding that there was little he could do to keep the producers from leaving. "I could give them this space for free and it still wouldn't compete with Connecticut," he said. The studio, which still hosts "The Bonnie Hunt Show" and others, has seen its occupancy rate slide to 46% from 85% in the last year.
 Howie Mandel Most of "Deal or No Deal's" 250 crew members lost their jobs in the move. "It's a crying shame," said Lindsay Hovel, an associate producer on the prime-time version of the game show hosted by comedian Howie Mandel. "There are so many talented people, and they're just not able to work in the [entertainment] capital."
The relocation was doubly bruising for Cella because it was announced just after California approved its film-tax credit program, which Cella lobbied heavily for and helped craft. The credits, however, don't cover game shows.
Still, Cella predicts that the tax deal will attract some TV shows back to California. "If we don't do something now, there's going to be nothing left," he said.
Sorenson, of 24/7 Studio Equipment, also is pinning his hopes on the state tax credits to spur business. A major studio film can generate $75,000 in rental income for a company like Sorenson's. But this year, 24/7 has worked mostly on a few low-budget films such as Screen Gems' "The Roommate." His company's feature film business has plummeted 50% since 2007.
Sorenson made up for the shortfall by renting out equipment to TV shows, but even that is no longer a sure bet.
One of his customers, the HBO series "Hung," filmed three months in L.A. and two months in Michigan, which offers a 42% tax credit. Another customer, the TNT series "Leverage," has opted to film its second season in Portland, Ore., which offers a 20% cash rebate on qualified expenses.
"It would be a lot different if we were smoking busy," he said. "But . . . every rental right now is like a precious jewel."
Local prop houses also are struggling from the downturn. Some have recently closed and others have cut their payrolls.
 Serving Los Angeles and Vancouver Modern Props laid off 17 workers last month. The company owns a 120,000-square-foot warehouse that contains 80,000 props.
"I was in shock," said Luis Peniche, 21, a former sales assistant who lost his $25,000-a-year job after two years at Modern Props. "I really loved working there. It was like family."
Unable to pay his rent, Peniche moved into his sister's apartment in Van Nuys. He also stopped taking classes at Santa Monica College because he couldn't afford the books and tuition. "I'd love to work in the entertainment industry, but it's just so bad out there."
Zabrucky launched the company 32 years ago, specializing in leasing furniture, lights and electric control panels to sci-fi TV shows such as "Buck Rogers in the 25th Century" and eventually to some of the biggest movies in Hollywood, including "Die Hard," "Ghostbusters" and "Men in Black."
Modern Props became one of the largest prop houses in Hollywood, employing 50 people in its heyday in the late 1990s. But the business has eroded through much of the last decade, squeezed by the growing use of digital effects; the growth of reality television, which spends little on props; and especially the departure of shows to other locales.
"We know how to do what we do very well," Zabrucky said, "but we can't fight the fact that everything is just being sold right from underneath us."
Last summer, Modern Props lost one of its clients, the ABC series "Ugly Betty," to New York. "Their set decorator was in every week placing orders. That's $14,000 a month we lost," lamented Ken Sharp, vice president of sales and operations for Modern Props.
To highlight the plight facing his business and others, Zabrucky recently designed skateboard decks that show a pictograph of the country, with California highlighted, and distributed them to hundreds of Hollywood executives as well as city and state politicians. The deck shows arrows pointing away from the state and the words "don't run away."
Hollywood is fighting to stop an exodus of filmmakers who are being lured from Southern California by subsidies and tax breaks.
Labour unions, studios and independent producers are urging California lawmakers to support tax credits for local production, after a bill sponsored last year by Assembly Speaker Fabian Nzqez failed to pass the state legislature.
The group wants California to match incentives being offered by more than 20 other states. Countries from Iceland to Chile also are chipping away at Los Angeles film and television production, the county's third-largest industry. Feature shoots have fallen 32 percent since 1996, according to Film L.A., a non-profit group that arranges local film permits.
Until recently, Los Angeles unions and politicians focused their concern on Canada, where a favourable exchange rate and government incentives helped attract scores of movie projects. As the Canadian dollar has risen and made location shoots less of a bargain, filmmakers have turned to other sites.
"Just as New York would never let Wall Street leave the city, we can't let the film industry leave Los Angeles," said Los Angeles City Councilwoman Wendy Greuel, 44, who is seeking to eliminate fees for filming on city property.
It's a big target for other states. Spending on film-industry payroll and purchases in California was $34.3-billion (U.S.) in 2002, 60 percent of the U.S. total of $56.6-billion, in the most recent figures from the Washington-based Motion Picture Association of America.
The number of days spent shooting movies, television shows and commercials in Los Angeles rose 4 percent last year, according to Film L.A. That compares with a 35 percent increase in New York City, after passage of laws in 2004 that refund filmmakers as much as 15 percent of production costs for crew and equipment. The city also offers free permits, parking and police on location.
Cities including New York, where Warner Bros. this year filmed the pilot TV episode of The Traveler, are courting producers more aggressively.
"It wouldn't have been worth it" two years ago, said Lisa Rawlins, vice-president of studio and production affairs at the Warner unit of New York-based Time Warner Inc., the world's biggest media company. "Pilots are always shot economically."
One challenge for the industry is to convince legislators from other parts of California that subsidies aren't a handout. Retaining production will provide economic benefits to the entire state, said Amy Lemisch, director of the California Film Commission, a state agency spearheading the lobbying.
A feature film with a $17-million budget generates about $1.8-million in sales and income tax for the state, the Los Angeles County Economic Development Corp. estimates.Film, TV and commercial production provides jobs for 241,000 people in Los Angeles County, including camera operators, drivers, carpenters and makeup artists. The industry trails only tourism and international trade, according to Los Angeles County Economic Development. Including music, the county has about 30 percent of all U.S. entertainment employment, with New York second at 10 percent.
New Mexico offered tax breaks, cheap hotel rates and a $7-million loan to lure the 2004 romantic comedy Elvis Has Left the Building, said Bob Darwell, 42, a Los Angeles entertainment lawyer who helped Capitol Films arrange the financing.Louisiana offers a transferable 25 percent tax credit on money spent in the state. As most filmmakers aren't based there, they sell the credit to a broker who resells it to a Louisiana company. The state also offers a 10 percent credit on salaries paid to Louisiana residents and a 4 percent sales- and use-tax exclusion that reduces the cost of equipment purchases.
"We have a very simple incentive package that can save 12 percent of the production's cost, we have trained crews that speak English, and if we don't have a piece of equipment, we guarantee that it'll be there in 24 hours," said Einar Tomasson, project manager of the Film in Iceland Agency, in an interview this month at a conference in Santa Monica, California, that also drew film commissioners from as far away as Chile and Australia.
The California Senate last year failed to vote on a bill by Nzqez, a Democrat representing central Los Angeles that would have provided tax incentives for local movie production.
Rather than trying to get the incentives passed as a standalone bill, Nzqez will seek to include them in next year's budget, said his spokesman, Richard Stapler. Budget negotiations for the fiscal year starting July 1 will begin next month.
"We get a lot of input from groups and individuals in the industry to keep this a front-burner issue for us," Stapler said.
Patrick Goldstein on the collision of entertainment, media and pop culture.
From Big Picture correspondent Mark Olsen:
Film Independent's Los Angeles Film Festival had its opening night on Thursday with the world premiere of “Paper Man” at the Mann Village theater in Westwood.
The 10-day event will screen some 200 films from 30 countries. Among the selections are such high-profile Hollywood films as "Public Enemies" with Johnny Depp and Christian Bale and the Michael Bay mega-production "Transformers: Revenge of the Fallen," and so it felt like a particular statement of intent that the festival, in its first year under new director Rebecca Yeldham, would program a genuinely independent film without distribution for its opening night.
"I honestly didn’t know," Yeldham said at the party following the screening as to how she expected the film to be received.
"It’s an interesting environment," she said. "It’s a festival audience, but it’s also an industry crowd and an acquisitions crowd. So I wasn’t sure if it was the kind of situation where if a particular buyer didn’t think it was for them, they were going to leave. But everyone was glued to their seats, and it was so beautiful."
Co-written and co-directed by the husband-and-wife team of Michele and Kieran Mulroney, "Paper Man" follows a struggling middle-aged novelist (Jeff Daniels) who still maintains an imaginary friendship with a superhero (Ryan Reynolds) while struggling to hold on to his wife (Lisa Kudrow) and engaging in an awkward friendship with a teenage girl (Emma Stone).
"We felt so much genuine support from Film Independent and LAFF, real confidence on their part," said Michele Mulroney following the screening. "And when they feel that confident about the movie, how are we going to second-guess them? We really feel they walk the walk, they don’t just say they support independent film. This was a big move on their part."
“Even though we didn’t have a distributor, there’s no studio behind us, we knew they would come out and make a great night for us,” said Kieran Mulroney.
The opening night of the Los Angeles Film Festival sometimes feels like an indie film prom. Besides the usual sea of talent agents, managers, sales agents, executives, publicists, producers, critics and journalists, among the crowd were such notable faces as Dermot Mulroney (brother of co-director Kieran), Emma Stone, Christina Ricci, Melissa Leo, Laura Dern, Christian Slater, Joshua Leonard, Adam Yauch, Dean Wareham and Britta Phillips, Anna Chlumsky, Penn Badgley and Robert Downey Jr.
The two main stars of the film, Jeff Daniels and Ryan Reynolds, were not in attendance, but prior to the start of the film a video screened featuring both of them. In the video, Daniels called Reynolds on the phone and they began to one-up each other for the reasons they couldn’t be there – Reynolds had talk show and promotional commitments for another film, while Daniels is appearing on Broadway in the play "God of Carnage."
In her remarks before the screening, Yeldham thanked Richard Raddon, her predecessor in the position of festival director, who resigned amid controversy when it became public that he had made a personal donation to a group supporting Proposition 8. When Yeldham acknowledged that Raddon was in the audience, a brief moment of reserved applause followed (and it should be noted, no booing).
Yeldham said afterward that she had not prepared her speech in advance, and so had not specifically planned to mention Raddon.
"I saw Rich right when I came in," Yeldham said, "and I have very deep respect for Rich and what he did for this organization and this festival. And I saw him right when I was walking down, and I was so happy that he was here, and I wanted to pay homage to him and what he had built. It was a speech from the heart."
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