Yes, I’m still alive!! Sorry but much of my spare time has been consumed helping establish our legal challenge to subsidies.
Well it’s that time of the year: California politicians are debating film subsidies which is sparking some hope in CA based VFXers that the state will deliver them relief as other heavily subsidized locations are taking jobs away. Now believe me I feel their pain and I’ve seen countless cycles of displacement which was one of the motivating reasons to start writing this blog years ago.
In my opinion, asking taxpayers to pick up the slack when the VFX industry has itself been reluctant to fix a failed business model isn’t going to yield the necessary results.
The latest round of politicians are simply trying to generate publicity that will garner campaign funding contributions from US studios. One obvious example is how they peddle bogus reports funded by the MPAA. Most independent reports show film subsidies yield a net loss which is also true for California’s program. Even CA Governor Jerry Brown has called film subsidies a losing strategy that is a race to the bottom.
Even if California wanted to have an effective film subsidy program, it would probably have to cost at least $500 Million a year or more just to compete with the $437M British Columbia gives to US studios. Yet even with that huge amount of money, BC is losing work to other provinces that offer even more free money. BC’s own finance minister even criticized what US studios were doing:
“I think we’re being played in Canada,” de Jong responded. “We’re being played one province against another. And the time has come for us to get smart and sit down as provinces and say ‘Here’s what we agree to do in Canada’.”
“We are not either able or inclined to send more British Columbia tax dollars to a production house in Hollywood,” he said, to applause from delegates.
Our legal challenge made recommendations on how to discipline and mitigate the distortive and volatile effect of VFX subsidies. Rather than lobby politicians to pass a law, we would go directly to federal trade court where if we prove injury from international subsidies, a duty would be levied against US studios for the amount of subsidies they receive. The investigation and ruling would take a little more than a year and it would be far more cost effective than the current $100 Million currently spent by California. The CVD effort also gives the trade organization we are forming something else too: Leverage with the US Studios to negotiate sustainable practices in the VFX industry.