Giving away tax incentives for film, television is gift that keeps on giving
By Maria Saporta
What a difference an incentive makes.
That was the bottom line of Monday’s Rotary Club of Atlanta’s program on the “Business of Entertainment in Georgia “ — with a special focus on the state’s burgeoning film, video and television industry.
During the 2007 fiscal year, the economic impact of the film, television and interactive entertainment industries was $242 million. In fiscal year 2013, that economic impact has grown more than ten-fold to $3.5 billion.
Virtually all that growth can be traced back to the passage of House Bill 100, which was signed into law by then Gov. Sonny Perdue in 2008, offering attractive tax incentives to film, television and entertainment projects shot, produced or built in Georgia.
Lee Thomas, director of the Georgia Film, Music & Digital Entertainment Office — a division of the Georgia Department of Economic Development, said the real impetus to pass that bill occurred when Georgia lost the film project “Ray” — the movie about Ray Charles, the singer who turned the song “Georgia on my Mind” into our state song — to Louisiana.
Thomas said that since 2008, more than 70 entertainment industry companies have located in Georgia, and there have been 11 soundstage announcements. As Georgia’s physical infrastructure has grown, so has its skilled labor. According to Thomas, Georgia can provide crews for up to 10 to 11 projects simultaneously.
(Full disclosure: my son is breaking into the business — having worked on three major movie projects, following in the footsteps of his father).
According to the panel speaking to Rotary, one of the biggest positive impacts that the incentive has had is in promoting the Georgia brand. Projects that showcase the Georgia “Peach” — showing that they were shot in the state — get the maximum tax break. Also, several projects have become cult favorites — attracting tourists who want to see the places where the movies or television series were shot — think “Hunger Games” or “Walking Dead.”
It is hard to quantify the economic impact of the ripple effect over decades when people identify a place with a movie or show.
Think “Fried Green Tomatoes,” “Deliverance,” “Forrest Gump,” “Midnight in the Garden of Good and Evil,: “The Internship” (Georgia Tech’s Clough student center being turned into Google’s headquarters)…
Ric Reitz, an actor, writer, composer, director and producer who was a key architect in the development of Georgia’s current entertainment tax incentive law and a co-author of the industry’s 2020 business plan, said the message being sent around the world is: “Made in Georgia.”
After New York, Los Angeles and perhaps Chicago, Georgia is “fertile ground” to become “the next great American media center.”
Reitz went on to describe all the assets that are already here — Crawford Media Services, the post production facilities founded by Jesse Crawford; all the cable stations that were originally founded by Ted Turner; Tyler Perry and his partnership with Oprah Winfrey, Pinewood Studios in Fayette County, EUE Screen Gems Studios at Lakewood; Jim Jacoby’s plans for a 400,000 square foot studio in Gwinnett County, among others.
“We can be the third largest media center in America,” said Reitz, adding that the Atlanta region already has an extensive fiber optic network and Georgia Tech’s research capabilities — “things upon we can build. We can build out our communications infrastructure. I call it Media 3. But the infrastructure component involves investment.”
Wilbur Fitzgerald, an actor who has appeared in more than 100 movies and television episodes, also was instrumental in getting the tax incentive passed.
He said that Gov. Perdue understood the significance of this tax incentive when he asked rhetorically about the Georgia “Peach” logo — “What if this logo had been on ‘Gone With The Wind.’” Ironically not a single scene of the movie that put Georgia on the map internationally was shot in the Peach state.
Now Fitzgerald believes that Pinewood Studios “will be a game changer.” The U.K. studio that produces James Bond movies and Harry Potter films is making a long term investment in Fayette County, an indication that the industry is putting its stake in the Georgia soil.
So is the tax incentive safe?
Reitz said that unlike North Carolina, Georgia’s tax incentive for the film, television and entertainment industry does not have a sunset (N.C. expires in 2014). “Our current governor is extremely supportive,” Reitz said.
Fitzgerald said that studios often make plans 12 to 18 months in advance, so they want to make sure they can count on the current tax incentives still being there down the road.
“Television shows, they want to feel good about the stability,” he said.
It also helps when movies and television shows are shot outside of metro Atlanta because communities all over the state end up benefiting from the incentive.
As he said: “This is a statewide industry.”
Reitz said that’s yet one more reason why Georgia needs to be as strategic as it can be to build out the industry and the communications infrastructure in metro Atlanta so it can better compete with the powerhouses in Los Angeles and New York.
“We have to more national media conglomerates here,” Reitz said. “We need to at least have their regional headquarters — Sony, Paramount, Viacom.”
Then, he seemed to debate himself, saying that those companies do like to be close to money centers, like Wall Street. Of course the new owner of the New York Stock Exchange is Atlanta’s own IntercontinentalExchange (ICE). Atlanta also has emerged a center for mobile communications, internet security and credit card processing.
Who knows what the future will bring — and what kind of synergies can emerge by becoming a top three media center.
But what we do know that when it comes to the film, television and entertainment industries — tax incentives have definitely made a difference in Georgia.