Comment by AlexB138
6 hours ago
The article repeatedly mentions how production moved to Atlanta due to tax incentives. Even that is a race to the bottom, as Disney moved production of Marvel movies out of Atlanta last year to the UK where they got better tax incentives. Even the undercutting cities are being undercut.
The whole tax incentive business is a big race to the bottom. Sports teams also abandon their taxpayer funded stadiums once somebody else offers a better deal.
Yep. See the Kansas City Chiefs.
Clark Hunt is the largest recipient of welfare in the entire region.
Sports teams are an interesting one because often times these things go on the ballot and people vote for that. So it looks like people and municipalities have varying reasons for keeping a team. That said sometimes it just doesn’t make business sense for a team to stay and other times a municipality decides it’s not worth the cost to keep a pro team.
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I just saw the new Spider-Man movie and there were a ton of notices about Canada-based film credits and from various provinces, too. I'm not sure how these credits work, but maybe spreading the work out to various tax incentivized areas is the current play.
Not that you're wrong, but I could have sworn that Marvel production was always based in the UK.
Post-production is very much still in California though.
https://discoveratlanta.com/stories/things-to-do/atlantas-ma...
Atlanta did a lot of the big ones.
I mean, the VFX part of the Film industry (and actual location shooting to some degree) has been chasing subsidies / tax credits since around 2002 with the Harry Potter movies that mostly were shot and produced (and more specifically the VFX were done in London, rather than in California) in the UK.
Since then Canada and the UK in particular (and NZ and Australia) have had various different fluctuations in subsidies for various parts of filming / doing post-production of movies over the intervening years.
Nobody really wins in a race to the bottom
What has yet to be mentioned is why Hollywood, in the first place?
Out of the many reasons, one is quite simple: daylight. This used to be really important with film.
Historically, this was why efforts to move filming to somewhere like 'Scunthorpe, UK' didn't really work, despite tax fiddles, because you need light and some places just don't have it.
But this doesn't matter now, because film has moved on, there is no need to have a massive glowing unshielded nuclear fusion reactor, 93 million miles directly overhead, just to get some lens focused on some bits of silver halide.
My understanding is that an important consideration at the time was that it is very far from New Jersey.
Edison had a lot of early patents for film, and wanted to monopolize the industry.
Film makers in California were far enough away that it was inconvenient for Edison to sue them, both because it required sending people there in person, and because the district courts were favorable.
The irony here being that Netflix is currently in a massive layout to build a studio in NJ (like, 20 minutes from the old Bell Labs). Almost feels like giving that troll the finger!
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Why Hollywood?
Because Edison and Patents in New York which was the original centre for filmmaking in America.
https://en.wikipedia.org/wiki/Motion_Picture_Patents_Company...
Film in Atlanta has dropped significantly.
We had a boom from 2010-2022, but post streaming era the gravity has moved to the UK and Eastern Europe.
soon they will be filming in mumbai. already setup for movie making.
Much of the VFX and CGI industry is already in India.
Movies and shows like Inception, Interstellar, Ex Machina, Tenet, Dune 1&2, Odyssey, Chernobyl, Foundation, and The Last of Us were VFXed in large part by Indian companies like Prime Focus, Makuta, Phanton, and their subsidiaries.
A number of these overlap with HPC and Distributed Systems with a number of major players in the space coming out of the GPU design space like Raja Koduri (AMD, Apple, Intel). Nvidia, AMD, Intel, Apple, and others having dedicated GPU design teams in India since the early 2000s also helped.
Why though? I thought Hollywood had their own accounting rules which always meant movies made a loss. What are they paying the tax on?
Tax incentives these days include transferable tax credits. Even if your net tax rate was 0%, you can sell the credit to someone else, typically a bank. IOW, states and countries give you money, not simply give you a tax rate break.
What kind of dystopian fuckery is that?
It reminds me of the eBay market in bulk lots of used scratch-offs harvested from the trash:
https://www.forbes.com/sites/robertwood/2016/01/14/powerball...
Hollywood accounting rules are regular accounting rules (GAAP). The only reason “Hollywood accounting” is a thing is because of a bunch of actors who didn’t know the difference between “gross” and “net” points got screwed over.
Everyone involved still pays their taxes, but the special purpose vehicle used to organize the production is essentially a passthrough entity.
If you’re not a name, you’re not getting gross points. There’s a wide swathe of participants (actors, writers, directors…) who need to demonstrate risk by taking net points to get signed, and they are routinely screwed by tactics like artificially inflated self-dealing distribution fees that cause the “production” itself to show a paper loss while the IP has generated hundreds of millions of dollars more than has been invested into it.
Movie Money Understanding Hollywood's (creative) Accounting Practices 9781879505865 This is THE book on the subject. There's a lot more to it than that. Sometimes productions get creatively charged by the studios costs that may not be directly related to shift losses. Sometimes contracts redefine common terms so your points structure is completely misleading.
I presume that what happens is if a movie is too profitable, other business expenses are shifted to the ledger to reduce the profits. This works because a movie is not a separate accounting entity.
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