In the past few years, many states have enacted such tax incentives.  The three most lucrative and most popular are currently Michigan, Louisiana and Georgia.  I have already written about the Michigan tax incentives in the past.  One such article about Michigan is “SAG and the Independent.”   These tax incentives are keeping billions of dollars and hundreds of jobs in the United States at a time when they are needed most.  As of this morning, the unemployment rate is 9.0% and the “Real” unemployment rate is approximately 16%. 

Recently, California has enacted a Tax Incentive Statute, to help keep its lucrative entertainment industry alive.  The California Statute provides a refund of up to 25% of Qualified Production Costs for Films that have 75% of their production days and/or 75% of their total budget spent in California.  The total amount allocated for this credit is one hundred million dollars per year.  However, the total amount has a lifetime cap and such cap is quickly approaching.

 Effectively, this California money will run out in about 18 months.  What this will do is remove all production from the state of California except for some TV, and a few feature films in which the stars have enough clout to keep the film in California.  As it is now, production in California is down even with the credit because, other than NY, it is the most expensive state to shoot in.  Without the credit, the industry will effectively leave the state.  Once it’s gone, it will be very difficult to ever get it back. 

Who will be hurt the most by this?  Will it be the major studios or independent producers?  No.  Studios will shoot films wherever they can make them cheaper.  Producers will do the same.  It may be inconvenient or uncomfortable for producers like me to live in a foreign country or in a hotel for a few months, but such is the cost of business. 

The State of California will be hurt largely because the lucrative tax revenues from the Entertainment Industry will go elsewhere.  However, the people who will be affected the most are the laborers who actually make the movies.  I’m talking about the grips, gaffers, drivers, prop makers and the general labor on a movie set.  These are the people who are not taken when a film leaves the state of California.  These are the people who will become unemployed and/or leave the state for areas where employment in their field may actually exist.  This, of course, will then hurt California even more as more tax revenues disappear forever. 

The two major unions that represent these craft workers and laborers are the IATSE and the Teamsters. IATSE represents almost all non-creative labor on a movie set.  The Teamsters represent casting directors, drivers, location managers and animal wranglers.  Therefore, it is in the best interests of these two unions to do everything possible to keep production here in California.  And, I have been informed by inside sources within the government that they are.  In conjunction with the DGA which represents directors, these unions have been lobbying to get the California Production Tax Credit increased and extended to help maintain whatever employment there is left in California for production crews. 

From what I have been told, the legislators in Sacramento are taking the lobbying efforts of these unions seriously because they are “workers” and represent the middle class.  In contrast, when Warner Bros or Disney goes up to Sacramento, they are seen as the rich downstate Hollywood Producers begging for taxpayer handouts to keep their expensive cars and Beverly Hills mansions.  To put it frankly, lobbying by the Hollywood Studios doesn’t work.  But, it may work for the IATSE and Teamsters members. 

So, why hasn’t Sacramento extended the tax credits?  As we all know, the State of California is effectively bankrupt.  The California Legislature is having a tough time deciding where to allocate the few dollars that are available.  And, there are many other industries and lobbyists that have their eyes on the few available funds.

 What surprised me most, as told by my contact, is that there are other unions actually trying to kill the production tax incentives and actively lobbying against their continuance.  Which unions might you ask:  The SEIU and the CTA (California Teachers Association).  These two unions who have their hands in almost every pocket within the State do not care about their fellow laborers in the Entertainment Industry.  They only care about getting an ever increasing share of California Tax Dollars; to the extent that such tax dollars even exist. 

As you know, the SEIU represents many state and local government employees.  They also represent people in other industries such as hospital workers.  However, their strength comes from their representation within the public sector.  Basically, the more money they can get from the government, the more the union members get paid and the more dues money goes to the union.  The same is also true of the CTA. 

Accordingly, both the SEIU and the CTA are doing everything in their power to stop the re-funding of the California Production Tax Credit.  To put it simply, they want the money!  To hell with the Entertainment Industry:  Even if it is one of the top private employers in the state!  This is all about government to these people and, not only the payment of public employees, but its expansion as well.  Maybe we should look at what’s going on in Wisconsin right now where they are currently considering a statute to invalidate union representation in the public sector. 

Over the course of the years, I have had many arguments with the IATSE and at one point was on their “Most Wanted” list.  Not this time however.  California has got to wake up in so many ways and this is one of them.  Keep your biggest industry here where it started and where it belongs.

Developing:

Obama’s visit to Los Angeles today has stirred controversy even before he arrived:

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A stage worker setting up the stage was fired for refusing to remove his hat and turn his sweatshirt inside out and the reason? The shirt hat and shirt both had the name “Bush” printed on them but not just any Bush but, that of George H.W. Bush.

The IATSE (Local 33) union fired the worker even after he explained the shirt to his bosses. The shirt didn’t explicitly support George H.W Bush but that of the aircraft carrier named after the former President and the aircraft carrier his son has served on for the past many years and is currently deployed. The union worker was interviewed on KTLA Channel 5 locally in Los Angeles.

The stage hand was identified as Duane Hammond and a distraught Hammond can be seen during his interview very distraught as his support for his son and his service becoming the center piece to his firing.

There’s much of interest here, starting with the fact that this crewmember won’t reveal his of her identity. But also, from the way Wampler describes it, the film crew in question is directly employed by Jimmy Kimmel Live:

Well, it just so happens that we’re pals with someone on that very crew of Jimmy Kimmel Live employees (who wishes to remain nameless, by the way, but I can assure you– they work for the show), so I contacted the worker and asked for a statement.

“[O]n that very crew of Jimmy Kimmel Live employees” appears to contradict what NewsBusters was told July 2nd.

Kimmel’s producers said the lighting people were not part of their team; the company was hired just for the day on June 25. Producers promised not to hire the company again.

Last week I wrote that the Kimmel Show producers agreeing not to hire this same company again was, to be fair, all anyone could ask of them. But Wampler’s story starts us back at zero. Were these bullies employees of the show, or not?

Anyway, here’s the full statement from an individual we’re assured was a part of that crew:

What happened that day was we were shooting a bit where Tom Cruise ziplines over Hollywood blvd from the Kimmel building to the sidewalk by Grauman’s. The protestors say we were shooting across the street, which was true, but we were ALSO shooting on the OTHER side of the street as well, where one of the oodles of protestors were, which was not a “peaceful” protest.

We obviously had a permit to put lights there and light the shoot location. Since the protestors however want to make it all about themselves, they thought (or figured they’d turn it into a story by thinking this) we were pointing the lights at them instead of what we were rehearsing/shooting, so a protestor took it upon himself to try and pull the light down. If the protestors were bothered by our lights, they could’ve moved away and the lights would not at all have followed them. We’re a professional crew, so to think we would bully them is absolutely outlandish.

Long story short, it’s pretty simple. We were lighting the action, the protestors wanted to stand in the light and say we were pointing it at them. Pretty stupid.

As always, let’s take Anonymous Crewmember (AC) at his or her word. But let’s also take another look at the videotape:

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So according to AC, an over-zealous pro-life protester (Ryan Bueler) looking for attention, intentionally walked into the spot where a hot light(s) were already shining (from the video it looks as though two were involved.) Again, taking AC’s word for it, I agree that’s a jerky move on the protester’s part. No doubt about it. This crew was trying to do a job and through no fault of their own, found themselves in the middle of unwanted drama. 

However, who had the power in this situation? The over-zealous protester or the crew in charge of the hot light? 

Yes, Bueler could’ve walked out of the light. But AC’s crew could’ve also shut the light off, or — if they needed to warm it up — pointed it towards the sky. At best, both sides behaved poorly, but the actual videotape tells us a lot about the thuggish mindset of AC’s crew.

1. At the :06 mark, the protesters ask the film crew to move spotlight off Bueler. Choosing instead to enter into an unprofessional war of wills, the crew refuses. AC’s statement that they were “rehearsing/shooting” has already collapsed. This confrontation obviously makes that impossible. At this point, there’s no reason why the light(s) can’t be pointed upwards.

2. If you look at the :34 mark, you’ll see what looks like a second light aimed in the same general direction as Bueler. And it’s turned on. But if you look at the 1:20 mark, you’ll see a third light not aimed Bueler that’s not turned on. Why? If the crew was rehearsing/shooting, why is that light off — the only one not shining on Bueler? Coincidence?

3. Things get real interesting at the 1:24 mark. One of the protesters grabs the light (which he shouldn’t have done) and moves it off Bueler. The film crew then shoves this protester away from their property, which is fair enough….

But then what does the crew do…?

4. At the 1:58 mark, they turn the spotlight right back on Bueler. (And this is where I see them revealing themselves as bullying thugs.)

What’s the point of blasting this hot light on Bueler now? Obviously, there’s only one reason: the crew is determined to bully Bueler off that spot. Sure, Bueler could move. But he already was out of the light and the crew just went ahead and intentionally put it right back on him.

5. At the 2:26 mark, after the police arrive, what happens? The crew points the lights towards the sky and shuts them off. Why did the police have to arrive before they did what they should’ve done as soon as this confrontation started?

Over the weekend, some interested sources sent along production safety regulations that makes clear how potentially dangerous and harmful these lights can can be and what the necessary safety precautions are to remain within compliance when using them: 

I.A.T.S.E. Local 728
Studio Electrical Lighting Technicians
SAFETY & TRAINING PROGRAM
LIGHTING CONSOLE PROGRAMMING STUDY GUIDE
SAFETY

One of the most overlooked aspects of being a motion picture console programmer is perhaps the most important. This is the issue of Safety. The programmer is responsible for safety in several ways:

• Injury prevention – Electric shock, blindness, burns, and epileptic fits can be attributed to an unskilled programmer.

• Fire prevention – Lights make great fire starters and a programmer who is not paying attention or does not know which lights are on can cause combustion by allowing lights that may be too close to movable scenery or in a public area to remain on without the lights being checked to confirm they are safe.

The duties of the LCP go far beyond pushing buttons and drinking coffee.

• The programmer also has a much larger impact on the health of the entire shooting company than often realized. Lights generate a large amount of heat and the programmer needs keep in mind the temperature in the perms (particularly if crew is working there) as well as on the stage and save the lights between takes as necessary. Lights that may blind the cast must also be saved between takes.

AC’s crew might not be a member of IATSE but these guidelines seem pretty reasonable to me, and what’s helpful about the video is that we need not take anyone’s word to know that most every safety reg listed above was violated.

Which leaves us with three questions:

1. Who is this AC and the others in the crew?

2. Are they members of IATSE?

3. Was this crew sub-contracted or do they work for the Kimmel show?

Finally, I want to address those commenters who accuse me of a double standard with respect to this story. The accusation being that if this was a Fox News crew light-frying a bunch of dirty, filthy hippies I wouldn’t report on it.

First off, in that situation I wouldn’t have to report on it. You take the exact same dynamic and replace Ryan Bueler with a member of any precious, left-wing, protected group and not only would the media make this a real story, I would agree that it deserves to be one.

The reason we’re following this story is because that’s a large part of Andrew Breitbart’s mission statement for all the BIGS. We are here to report on stories the corrupt media won’t, and to call attention to the fact that corrupt media would be all over this if Ryan Bueler were either a lesbian vegetarian, Osama bin Laden, or anyone other than a pro-life Christian.

My company then proceeded to disavow any knowledge of my column and said that what I write is of my own doing and not the policy of the company.  This is true.  It is my own doing.  No one tells me what to write or censors my editorial content. 

I still believe IATSE is harming the burgeoning film industry in Michigan.  I believe that if IATSE was doing the right thing in Michigan, the state of Michigan would be putting all of the other tax-incentive states out of business.  Producers would be running there in droves. 

Unions are supposed to be the mechanism to level the playing field for the working man.  Their job is to protect the working man from “the man,” and to keep their members employed fairly.  Isn’t employment what unions are really all about:  Especially now when unemployment is so rampant all over the United States, particularly in Michigan and California.  You would think the unions would be bending over backwards to work with “the man” in a mutually beneficial situation.  Let us all do whatever is necessary to keep employment in the United States; not Eastern Europe or Asia. 

Unfortunately, this is not the case with IATSE in Michigan and with the Screen Actors Guild (SAG) anywhere.  SAG does their best to stop movies from being made instead of helping the independent producer hire their mass of unemployed. 

I will now give some examples of how SAG harms the independent producer. My first look deal is with Nu Image, Inc., one of, if not largest independent production companies in the business.  In the last 10 years, this company has produced more than 150 films ranging in size from one million dollars to sixty million dollars.  It has employed more than 1,000 actors; the majority of which are members of SAG. 

Does SAG do anything to make life easier for this company?  No.  SAG does everything in their power to stop this company from making movies.  In fact, over the past ten years, there have been many incidents where this company has had to threaten to shut a movie down and sue SAG in order to get any cooperation whatsoever. 

This is a company that employs, pay actors millions of dollars and pays residuals to actors on a regular basis.  Can you tell me one true independent that has been doing this since 1992?  Probably not. 

Just last week, Nu Image was about to shoot a thirty million-dollar film and was held hostage the day before principal photography was to start over a dispute regarding the SAG Bond which is a “guarantee” that actors will be paid.  SAG insisted on a bond in the approximate amount of $400,000 which was based upon erroneous SAG employment figures provided by the production staff on location.  SAG did not care.  They were going to call actors’ agents and shut the movie down the day before it was scheduled to start.  The matter was resolved at the twenty-fourth hour, but not before threats were made from both sides that almost put the picture in jeopardy.  At one point, a SAG employee told us, well if a production employee provided erroneous figures, you should fire him/her.  Is this the way a union represents workers? 

Another nightmare for the independent producer is the SAG security interest which is a lien on the film’s copyright for the life of the copyright.  The theory behind this is to protect the actors against unscrupulous producers failing to pay residuals.  Fine.  It makes sense for one-off producers or producers with a bad reputation.  But, is it necessary for a major independent production company with a history of paying residuals?  Why must SAG demand cash – which is desperately needed to fund the production – be removed from the budget to pay SAG deposits?  Why must the threats go back and forth every time any request is made? 

Then after all of the stress with SAG during production, the independent must beg for the return of the SAG Bond after it has paid the actors in full.  As you already know, this amount of cash can be substantial and for smaller companies is actually needed to complete the movie. Thank God, Nu Image has the capability to complete movies without this money. I have heard horror stories from other companies where the SAG bond has caused foreclosure on loans and investor liens because sometimes they will just not return it. Sometimes they unilaterally convert it to a residuals bond to guarantee the payment of residuals.  

Sometimes the reason given for its non-return is absolutely asinine.  For example, SAG has a document that must be completed on every film to show minority hiring.  You must show the number of females and people of color hired by the production.  This form is a survey and nothing more.  There are no quotas in the SAG system and a producer may hire whoever they choose.  However, if this form is not filed by the producer, the bond is not returned.  The same is true of every piece of paper that SAG employees have on their checklist. No one will think out of the box. No one will pull the trigger and give the money back until this checklist is complete. 

And, no one will give the money back with any interest that matters.  Back in the day when CD’s were paying 4-5%, SAG was paying 1.5% or less on the bond.  I’m sure now they are holding money in some cases for more than a year and paying 0% interest.  I wonder what they do with the money they earn? 

Lastly, the SAG arbitration system must be discussed.  Talk about an uneven playing field!  Prior to producing films, I was an entertainment attorney.  In all, I have been in the business for 25 years, give or take.  During that time, I have not seen one SAG arbitration ruled in favor of the producer.  In fact, some arbitrators on the SAG list have never ruled in favor of management.  I can think of a few names that are on my strike list just because of personal experiences. 

In one circumstance, a former SAG Board member, Seymour Cassel, was hired by a company that I was involved with.  Mr. Cassel, being on the SAG Board, forced the union to pursue a grievance on his behalf.  That matter was fairly simple.  He believed he had a two week guarantee of employment and the employer felt there was no guarantee and paid him for the one week he actually worked. 

The matter went to arbitration and Mr. Cassel won.  He was given the second week. It seems like it should have been a swearing contest and the arbitrator just chose to believe the representatives of Mr. Cassel.  Sorry, nope. 

It was much more complicated than that.  Mr. Cassel had actually signed both a SAG deal memo and a long form agreement, neither of which mentioned anything about a two-week guarantee.  In fact, they specifically stated there was no guarantee.  But, there was an interoffice memo from Mr. Cassel’s agent that said the deal was for a two week guarantee.  This document was not signed by anybody.  In legal parlance, it not only was pure hearsay, but it violated the merger rule.  It should not even have been entered into evidence. 

This did not matter to the arbitrator. He ruled for Mr. Cassel based upon the interoffice memo. 

By the way, Mr. Cassel was just thrown off the SAG Board last week for “conduct unbecoming a member,” and his membership was suspended. Variety stated that Mr. Cassel was considering filing for “financial core” status which would permit him to work on union and non-union films during the course of his suspension. 

“Financial Core” is a really interesting animal.  It is based upon a Supreme Court decision (Communications Workers of America v. Beck, 487 U.S. 735 (1988)) in which a union member sued the union because he did not want to be associated with the Union’s political lobbying activities.  The Supreme Court found for the union member and stated that no one could be obligated to pay for the political positions of the union.  They only had to be obligated to pay union dues for the “financial core” of the union. 

Based on this Supreme Court ruling, any member of any union in the country can go “Financial Core.” All it requires is that they write a one sentence letter to their union stating that they have elected Financial Core membership.  A “Financial Core” member of any union is still covered by all union benefits such as pension, health and welfare.  They can then work on all union and non-union movies without being subject to any penalty from the union at all.  The only things a “Financial Core” member of a union cannot do is vote in union elections or hold elected positions within the union. 

Personally I am amazed that droves of actors, directors, writers and crew members have not chosen Financial Core membership.  Maybe it’s because the unions all try to keep it a total secret and will do almost anything to avoid their members becoming aware of its benefits.  Imagine – union members being able to decide for themselves who they will work for and under what conditions.  It would mean they have to be treated as adults – not obedient children by their unions. It would certainly make life easier for independent producers and allow them to spend their hard won cash on making movies not paying for union bureaucracies.

 Maybe Seymour Cassel will start a trend – who knows. It may even help the employment situation for actors and all member of the entertainment industry.  After all, isn’t that what we need to end this recession; more employment.

You would think that after the UAW destroyed the auto industry and the tax base in Michigan, the people of the state and the unions based there would have learned. However, this is not the case. In the latest union disaster for the state of Michigan, the IATSE has decided that the blooming film industry in the state must be stopped before it even gets started.

As most of you in the film business know, the state of Michigan has one of the most lucrative tax credit/rebate programs in the industry. The state gives you 40% of every qualified dollar that you spend in the state. In addition, if you shoot your film in a few core areas such as Detroit, you will get an additional 2%. That’s a whopping 42% of what the producers’ qualified in Michigan spend. On a 20 million dollar budget, this can amount to a gift from the state of Michigan of approximately 6.5 million dollars after you subtract the non-qualified costs.

Other states have tax incentives, but none even come close to these numbers. Louisiana, which has the oldest and most tested tax incentive, just increased their program from 25% to 30% and loosened its requirements in order to compete with Michigan. South Carolina is also considering an increase in its program in order to compete.

Smelling blood in the state, IATSE has decided that any economic growth in Michigan caused by this program must be stopped. In the latest deal struck with the AMPTP, the IATSE has changed Michigan’s ten most production friendly counties into the Maryland Rates. The change effects Ann Arbor and Detroit’s scenic and wealthier suburbs.

You may ask, how is this killing production and the economy in Michigan?  Well, prior to this union agreement which takes effect on August 1, 2009, most of Michigan, except for Detroit’s Wayne County, came within the Area Standards rates which cover most of the country, including South Carolina and Louisiana.  According to a production executive at my company, the additional cost of the Maryland Rates will be almost $500,000 over the course of an average production. Hence the benefits of the 40% in tax credits is gone.

Producers will do what they always do and go running for the best deal.  With this additional cost in Michigan now, it will probably be back to Louisiana, South Carolina or one of the other states that come within the Area Standards IATSE deal.  So, another union is doing its best to destroy Michigan.  And yet, the liberal government in Michigan allows this to happen?  Why do the people of Michigan sit back and watch their beautiful state head into oblivion?