Professional Motion Picture Production and Distribution NEWS

NEW YORK--Directors Guild of America Eastern Executive Director Russell Hollander joined producers Dick Wolf, Jane Rosenthal, James Brubaker and James Schamus, film and television star Ice T, and local guild and union officials at a New York City Council Finance Committee hearing today to testify in support of a bill designed to increase production in New York City's film and television industry.

The legislation would allow a 5% refundable tax credit to film and television companies in addition to the 10% tax credit qualified productions can already garner from New York State. A qualified production is any feature length film or episodic television show that spends 75% of its qualified production costs at a qualifying New York City stage, according to the legislation. The bill would cover the work of set designers, costume makers, location scouts, production assistants, camera and sound technicians, caterers, background actors, and film editors throughout the City up to $12.5 million in tax breaks for each calendar year.

The following is the testimony given by DGA Eastern Executive Director Russell Hollander to the New York City Council Finance Committee members earlier today:

"Chairman Weprin and members of the Finance Committee, my name is Russell Hollander and I thank you for inviting me to appear before you today to discuss the proposed tax incentives to promote film and television production in New York City. I come here on behalf of the Directors Guild of America (DGA), of which I am the Eastern Executive Director. We have over 3,000 members who live and work in the five Boroughs.

"Founded in 1936 by the then most prominent directors, the Directors Guild today represents directors and members of the directorial team who work in feature film, television, commercials, documentaries, news and sports. The DGA's mission is to protect the creative and economic rights of directors and the directorial team -- working to advance our artistic freedom and ensure fair compensation for our work.

"I am here to express the Guild's enthusiastic support for the proposed tax incentives to promote film and television production in New York City.

"While we at the Directors Guild of America are keenly aware that film is an art form, we do not overlook its value as commerce. We represent the kind of industry that every country and every state wants: an environmentally clean industry with union jobs that offer health and pension benefits. Our industry has an enormous impact on city revenues, not just through production costs, but also through the small businesses and others who gain from our presence -- from hotels, to dry cleaners, to restaurants, to a host of other vendors. In other words, this is an industry that is about jobs and economic development. We are an engine that drives other industries in this city.

"As you all know, domestic film and television production has declined substantially in the past decade, in large part due to incentives offered by foreign countries, particularly Canada, to lure domestic production. New York has borne the brunt of this decline. The number of days of location shooting on feature films, television, commercials and music videos, for instance, has declined by more than 50% from 23,000 shoot days in 2000 to only 11,600 shoot days in 2002. While production has increased in 2003 and 2004, we are nowhere near the film and television production that previously existed in the City.

"Most of the production has shifted to Canada and Eastern Europe where foreign governments provide substantial subsidies to lure film and television production. Despite the heroic efforts of the City and State Film Commissioners, New York lost three feature motion pictures to Canada in the latter part of 2003 alone. All three of these pictures are set in New York City. `Human Stain,' a film written for New York with an estimated budget of approximately $26 million, was shot in Montreal. `Noel,' another film set in New York that had planned to shoot in New York, made the decision to shoot in Montreal shortly before production began. The company felt compelled to do so solely for economic reasons. Finally, `The Cinderella Man,' a Universal production with a projected below-the-line budget that would have exceeded $36 million if shot in New York, was shot in Toronto.

"Films that do shoot in New York City, moreover, often limit their actual New York shooting to establishing shots and/or exterior location shots. These projects do the majority of their shooting on stages outside the United States. For example, `How to Lose a Guy in 10 Days' involved 56 days of shooting, of which only 16 occurred in New York. New York City lost $11 million to Canada on this film alone. And `New York Minute,' another film set in this city, had 22 weeks of preparation in Toronto, 37 Canadian shoot days and 8 location days in New York City. `Bad Apple' and `Vapor' were similarly shot primarily in Canada.

"In response to this growing problem, the Directors Guild spearheaded the industry's effort to gain federal incentive legislation to combat `runaway production.' Over the past four years, we worked hard in Washington and with Film Commissioners and local elected officials across the country to impress upon members of Congress the need for legislation that would keep production in the U.S. When `The American Jobs Creation Act of 2004' was signed into law on October 22, a federal tax incentive was one of the provisions included.

"But federal incentives by themselves will not fully level the playing field. Aware of this fact, states such as Illinois, Louisiana, New Mexico, New Jersey, Florida, Mississippi, Hawaii, South Carolina and now New York State have enacted incentive programs to attract film production. The positive impact to New Mexico, Louisiana and Illinois has already been felt. Louisiana's revenue went from $20 million to $200 million in just one year. New projects are now being put on hold because Louisiana does not have sufficient crews to meet demand. Illinois' film production has increased over 140% percent since its legislation took effect earlier this year. There are at least seven other states working to pass tax incentive legislation this year so they can reap these benefits for their local economies.

"Producers would rather shoot films that are set in New York here in New York, for here we have the talent base, the infrastructure and the real locations. But the bottom line for producers must be an economic one. Increasingly, our members report to us the problems they face in getting the go ahead to shoot films set in New York, here in the City. Even the most prominent directors have difficulty persuading the studios -- who would rather shoot here -- to do so. They regularly advise us that incentives are essential if they are to succeed in the future. The proposed legislation, if enacted, will provide our members with a very powerful and persuasive tool, so that their films which are set in New York City can, once again, be shot in New York City.

"We know that incentives work. After New York State passed its law, a major studio immediately made the decision to keep a TV series in this city instead of going to Canada. And we all know the remake of `The Producers' will be shot in New York. That's thousands of jobs and hundreds of millions of dollars.

"Second only to California, New York is the epicenter of this industry. Just last week, seven TV shows and five features were shooting in New York City; 61% of the DGA positions went to residents of New York City. We cannot afford to become a minor player in this global stage. While the recently enacted State legislation is a key step forward in keeping production here, the additional incentive that you are now considering is critical to restoring film and television production in New York City to the levels that we had long and deservedly enjoyed."

For more information, please contact Morgan Rumpf or Allison Holmes at 310-289-5333