Runaway production may help studios' bottom line, but it hurts workers below-the-line.
Those who once made middle-class livings off the film and television industry in Southern California have gone through a big adjustment as more production moves to other states and countries that offer higher tax incentives, lower costs of goods and services and cheaper workforces.
“I lost my truck that I used to drive actors around in last year,” noted Shaun O'Banion, who saw driving work for movies fall off precipitously four years ago. “This beautiful Chevy Tahoe, $56,000 truck. I took a $5,000 loss on it.”
“It's made it impossible for us to start a family,” said David Breaux, a digital character animator who bought a house with his fiance in Santa Clarita two years ago — and whose last steady work, on the film “A Good Day to Die Hard,” ended in December 2012. “Right now, I'm on unemployment and trying to find some little freelance things here and there. My parents send me a little bit of money to help, but unless another project lands, by February we're going to have to leave our house, I imagine.”
Throughout the entertainment capital of the world, below-the-line workers — the grips, makeup artists, prop masters and others who don't make the marquee — are weighing whether to find a new profession or spend months away from family and friends if they're lucky enough to nab one of the dwindling number of jobs in places like Vancouver, Atlanta or New Orleans that still hire California residents.
That's because those who have gone out of state in the past inevitably trained their local replacements, and when California workers are brought along, if those states have income taxes, that comes out of their paychecks,
It's not just production workers that are being affected by the exodus. Thousands of vendors who supply the industry with everything from props and cameras to foliage and food have had to rethink their futures.
Jim Elyea, who runs the North Hollywood prop house History for Hire, said the entertainment business is constantly evolving, and runaway production is the latest turn. The recent explosion in the number of cable channel shows, although made more cheaply, has helped offset some loss of local production, he said.
Still, business has been flat over the past decade, Elyea said. History for Hire hasn't raised prices over the past 10 years, but they've had to hustle to add more and more props.
“We have to work twice as hard for the same dime,” said Elyea, who runs the prop house with his wife, Pam. “Our expenses have gone up, but our grosses don't go up.”
There's a sliver of a silver lining to runaway production, Elyea said. History for Hire rents out its props by the day, so shipping the items out of state can result in more money for the production company.
Others are opening branches out of state to meet increased demand in those jurisdictions — and are finding it easier and cheaper to do business when they do.
“It really is a mentality that has to change here in California and Southern California,” said Gregg Bilson, president and CEO of Independent Studio Services. A family-owned business since 1977, the Sunland-based prop, firearms and graphics supplier has added six out-of-state branches in the past five years.
“Each one of these states I went to open a business in, I cannot tell you how easy it was,” Bilson said. “They received me with open arms and made the process about as simple as it possibly can be. Conversely, doing business in California has become increasingly more difficult to do at every step of the way. That's because of regulations, it's because of red tape, it's just because it's a pain in the ass, quite frankly, and these other states really want your business.”
Bilson also noted that his 120,000 square foot building in Sunland is worth around $11 million, while the 5,000 square foot building he bought in Georgia cost $260,000 (Bilson's L.A. place would have cost $6.24 million there).
Joseph Chianese, executive vice-president for financial solutions at the Burbank-based production payroll company Entertainment Partners, said the firm now has nine offices in other states. He also noted that the Southern California operation has grown in the past seven years; part of that was in the incentives division Chianese started by himself in 2006, and which now has nine employees here who advise producers about what each state and country has to offer.
“I probably get 25 to 50 calls a week from clients or prospective clients saying ‘I have this project, where should I go?'” Chianese said. “Obviously, it's always related to an incentive.”
Other local entrepreneurs can't branch out as easily.
Opened in 1989, Sandy Rose Floral Design is a North Hollywood store that provides fresh and silk floral arrangements to the nearby studios in Burbank. Its flowers have appeared in TV shows like the “The Bachelor” and “Ally McBeal” and movies such as “Nixon” and “Iron Man.”
In the past five years, Sandy Rose has seen its business cut by 40 percent, owner Corri Levelle said. Business began to wane after the 2008 writers' strike, and never came back, she said.
“I can't ship,” Levelle said. With fresh flowers, she said, “you have to stay local.”
“Because we are trying to be as adaptable as we can, we still have growth,” said Matt Greenstone, president and CEO of Angel City Studios, an 11-year-old, NoHo outfit that specializes in titles and motion graphics for television shows. “The problem is, we have to take on so much more work than we used to do. The jobs themselves were literally paying 400 percent more when I started than what they're paying now. We used to get anywhere from $10,000 to $15,000 for a show opening before. We're just being paid a couple grand to do these titles now.
“With the digital revolution, China, India, Japan and a lot of Eastern European countries now, the cost of living is so cheap, they can pay workers pennies on the dollar compared to what we have to pay here,” added Greenstone, who employs six to eight digital workers at any given time. “That's why huge companies are going under. It's only the little, lean and mean companies that stay in Los Angeles that can still afford their overhead and stuff.”
Large visual effects outfits such as Rhythm & Hues have collapsed as more digital drawing is being farmed out of the country — while their proprietors have been pressured by major studios to open facilities in states and provinces that incentivize post-production.
This has left a vast sea of non-unionized VFX artists stranded in California, facing tradeoffs when they land work elsewhere.
Ron Edde is a VFX technical director who is working on a three-and-a-half month show in Vancouver. It's not the first time he's had to leave LA for work in Canada. He said he's getting paid a fair wage for the current gig, but his rent up north and other expenses come out of it.
“I have not met one single person up here who is OK with the tax incentives,” Edde said of his fellow L.A. expat workers. “All of us have been struggling with that, all of us have been living nomadic lives, and it's something that we are really getting tired of.”
Permanently relocating to production boom states can be tricky as well. La Crescenta resident Darin Miller, a first camera assistant whose father also worked in TV, has an ex-wife and two kids under 10 here. He's had so little work this year he's at risk of losing his union health insurance. Miller knows heading for busier territories can turn into a mug's game.
“For one thing, my family is here,” Miller, a 25-year industry veteran, said. “But also, eight years ago, a lot of people left for New Mexico because that was going to be the best place to make it. They started building stages there, but when everywhere else started happening with tax incentives, New Mexico became a ghost town in terms of its film industry. They still make movies there, but not like they did five years ago.
“Then everyone moved to Atlanta because that's the new hot spot, or Louisiana because that's the hot spot,” Miller noted. “I'll just be a nomad if I start moving; I'll be moving every three or four years.”
Shaun O'Banion, the driver, has been able to co-produce three low-budget, independent features while his day job faded away. The first two didn't make him any money, but he has hopes for the third, which was shot in upstate New York in the fall.
“Even on a low-budget movie, the state incentives were still enough that we could get a tax credit back that equaled up to 30 percent of our movie,” he admitted.
Staff Writer Dakota Smith contributed to this report.