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States race to win lucrative film productions
By Dan McCue
Staff Writer
ESPN’s original production “Ruffian,” which recently wrapped production in New York and will debut on ABC television next year, purports to tell one story but actually tells three.
Its intent is to be an account of the legendary, ill-fated thoroughbred that emerged from a South Carolina horse farm to become a champion and one of horse racing’s immortals.
But in its making, the film also revealed two other unintended stories.
One is about South Carolina’s lack of advantages when it comes to luring feature film production—a clean industry that has a huge upside in terms of revenues for those communities chosen as shooting locations—and the Legislature’s current attempt to level the playing field with other states.
The other is about Louisiana, where most of the footage for “Ruffian” was shot, and how its early lead in providing incentives to filmmakers is helping to turn the Bayou State into the Hollywood of the Deep South.
“When film people look at the plan we’ve put in place and the resources we can provide them, they always laud what South Carolina has done,” said Jeff Monks, the head of the South Carolina Film Commission. “But when they compare the numbers, they said they still find it better to go to Louisiana, Massachusetts or Rhode Island. Right now, we don’t have a competitive piece of incentive legislation in place.
Film industry follows funding
The history of film and television production in North America has always been about location and making the financials work. South Carolina has location and has been trying to make the state financially attractive as well.
Legislation adopted by the General Assembly in 2004 had two main components. If a film company spent less than $1 million while filming in the state, it would be exempt from paying the state’s sales or accommodations tax while here.
If they spent more than $1 million, not only would the filmmakers get those tax breaks, but they would also receive a 15% rebate on the wages paid while working in the state and also a 15% rebate on any money paid to local suppliers while in South Carolina.
“At the time, it was less than Louisiana was offering filmmakers, but it was still competitive,” Monks said. “Within two to three months, however, nine other states had passed more aggressive packages, mainly based on tax incentives, and at last count, six other states had the same sort of legislation pending.”
As Louisiana and other neighboring states have captured both market and revenue, South Carolina has seen its motion picture revenues decline, Monks said.
Typically, when a Hollywood production sets up shop in the state, it will spend between 33% and 50% of its entire budget in the community in which it’s filming, he said.
As an example, he points to the 2003 movie “Radio,” which starred Cuba Gooding Jr. and Ed Harris. While filming in Walterboro, a community with a population of 20,000, the company spent roughly $117,000 a day for 100 days.
“That’s over $11. 5 million, so you can see that in a small rural community, the financial impact is immediate and substantial,” Monks said.
“When the producer shows up, he essentially has a check and a script,” he said. “He then has to assemble a crew, the members of which typically make upwards of $20 an hour. So you’re talking about knowledge-based industry with high paying jobs and none of the hidden costs, such as having to build roads or schools, like you do when you entice a manufacturing plant to the area. That’s a big win for the state.”
And the movies can bolster South Carolina’s largest revenue source: the tourism industry.
“When ‘Forrest Gump’ came out, several travel agents called seeking to book trips to see where Forrest’s house was and where he parked his boat and where the scenes depicting Southeast Asia were shot. Those were truly unexpected revenues,” Monk said.
How ‘Ruffian’ wound up in La.
Ron Wechsler, vice president of development for ESPN Original Entertainment, said while the network did “look around a little bit” at possible locations for shooting “Ruffian,” including South Carolina, it was pretty clear from the start that Louisiana would win out.
“It came down, really, to a couple of factors,” he said. “One was that they had a race track, Louisiana Downs, that we use for much of the filming. The other was that, as far as feature production is concerned, Louisiana probably has the best tax structure in the United States.”
The centerpiece of the Louisiana incentive program was a 25% tax rebate based on the size of the budget of the film being shot in the state, including those portions of the budget spent in other states.
Since Hurricane Katrina, the Louisiana state Legislature has tightened its requirements, providing rebates only for those portions of the budget actually spent in the state and doing away with other givebacks.
State increases competitiveness
But even Wechsler, who had a good experience making a feature in Louisiana, doesn’t believe the state will have a stranglehold on filming in the region forever.
“They’ve been very aggressive, but in the end, it all equals economy, and Louisiana’s is really struggling at the moment, dealing with the aftermath of the hurricane,” he said.
And other states are refusing to concede defeat.
In South Carolina, the state Legislature is considering a bill, H. 4966, which would offer a 30% rebate of expenditure to filmmakers who shoot in the state.
“If it passes the Senate, as it already has the House, this bill will put us in a very competitive position,” Monks said. “I know, for instance, that the Motion Picture Association of America, which is composed of the seven major film studios, is closely monitoring its progress and that a number of filmmakers have put off production to see what’s going to happen.”
At the same time, Monks and his staff are continuing their marketing efforts and casting a wide net, looking to bring not only more film and television production into the state, but also commercial and music video shoots, and print and catalog work.
Recently, upscale retailer Saks Fifth Avenue shot their entire 40-page catalog in Charleston.
“Marketing really is a case of breaking down somebody’s needs, somebody’s script, and saying, this is what this scene or this movie or this shoot will look like if you decide to do it here,” Monks said. “Consider South Carolina. Here’s your potential crew. Here’s your business plan for while you’re in our state.”
Dan McCue is a staff writer for the Business Journal. E-mail him at dmccue@charlestonbusiness.com.
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