Trade Provision Supporting ADAPT Legal Effort In AB1839

Big news came last week as CA bill AB1839 was amended:

An amendment to proposed legislation to expand California’s film and TV tax credit urges trade action as a response to countries that have lured visual effects firms away with the promise of generous subsidies.

Huge thanks to everyone who helped and Assemblymember Mike Gatto for standing up to the studios and writing a provision into a bill he co-authored supporting out effort. While it’s a huge step in the right direction, I obviously have issues with the subsidies in the bill and was hoping that the trade provision had more teeth to it.

When our law firm helped the shrimping industry get trade relief from injurious subsidies, the government of Louisiana actually helped fund the legal effort. Since our legal effort costs a fraction of what the hundreds of millions of dollars in subsidies needed, we felt it would’ve been a small cost that could lead to a more effective outcome.

Soldier On.

39 Responses to Trade Provision Supporting ADAPT Legal Effort In AB1839

  1. vfxmafia says:

    So Mike Gatto puts his name on a bill……that alots $400 million in tax payer money …(which is more free cash for billionare CEOs) …straight out of the tax payer wallet……….

    ….but he could have appropriated a mere $250K to the ADAPT fund…(launched the CVD case) and a brought back close $1 BILLION in foreign subsidy money injected into the california economy. (If you combine UK and all Canadian provincial money it might be more than a billion a year)….

    Mike Gatto and the state assembly sound like real smart people…..

    (but wait he put really strong language in the bill that we really should be giving tax payer money to benefit actual tax payers…but that was too tough to pull off)

  2. vfxmafia says:

    Dan I appreciate everything you have done. To give birth to, and brand, and promote ADAPT ….is an amazing accomplishment.

    Not to mention all the marches…..and traveling all over the world to unite VFXers……hiring the lawyers…….all of it…the whole movement epitomizes the very definition of courage. Is this bill AB1839 really help us?

    Do you think we could get appropriated money to help fund the CVD like the shrimpers?

    • Andreas jablonka says:

      I think there is no such thing as bad publicity.
      When we try to raise awareness at the oscars or through “life after pi” just a few listened. This bill is heard by many! It got amended to
      Include us! That alone is huge as we are acknowledged!!!

      I know you want more. We all do. But I think we also need to step back and see what we have reach so far.

      Shrimpers? Forrest Gump? Bubba? Vfx oscar? Just saying use the coincidences!

      • Image Ghost says:

        “Shrimpers? Forrest Gump? Bubba? Vfx oscar? Just saying use the coincidences!” Seriously?

        I agree with Mafia. Gotta move faster or kiss it goodbye.

      • vfxmafia says:

        @Imageghost

        Unfortunately i dont have answers either (just impatience).

  3. The Studios wield a very powerful axe in Sacto. and DC. It’s amazing that we got any language supporting VFX in AB1839. That being said, “urge” is only meaningful when one needs to pee.
    There are no teeth in those words and I would be shocked if those words get VFX anywhere. As Dylan once famously said ” Money doesn’t talk it SCREAMS”. At present, there haven’t been anywhere near the numbers we had hoped for regarding ADAPT membership donations. It’s America people and if you want to get anything done, it will cost money. So, stop typing and reach for your credit card and go to http://www.adaptvfx.org

    • vfxmafia says:

      @ Scott…

      “Its America people, and if you want anything done, it will cost money.”

      Yeah….but i ain’t living in America anymore …Scott …..and neither are the other 2,000 LA VFX guys who left with the subsidy money.

      I think if ADAPT is going to be asking for money in excess of $100 then it needs to be a bit more transparent with the accounting. In fact when it comes to my check book…it needs to be down right specific.

      How much money do we need to raise? How much have we raised? Who is charge of spending the money? Is their public disclosure of the fund?

      With the first fundraiser it utilized “Kickstarter”…..we could donate…and it wouldn’t be charged unless the goal amount is obtained. The money would also be utilized for the sole purpose of the mission statement. (IE the lawyer retention). There is a built in circut breaker

      ADAPT is a whole different beast…you want my money …but you won’t disclose anything about the lawyer bill? If there has been a lack of donations……its because people need to stop quoting Bob Dylan and Bumper Sticker slogans….and tell how much the lawyer bill is……

      This industry has deterioated so much since the entrance of the subsidies. In fact i have seen drug deals more professional than VFX companies (Look FX, or the walk away bankruptcies, etc….)

      If Adapt wants my money i really thought they would and should be more public about the accounting……can we run the new lawyer bill through Kickstarter? (i would feel alot more comfortable about giving money)

      • jona says:

        “I think if ADAPT is going to be asking for money in excess of $100 then it needs to be a bit more transparent with the accounting.”

        Exactly.
        But hey.. BBQs cost money.

      • VFX Soldier says:

        If you remember when we did the first fundraiser which raised $16,000 it was vehemently attacked by opponents as a scheme for me to make money. All that money went to pay for the legal study which ended up making big headlines when the MPAA admitted that digital products were goods.

        Nobody from ADAPT has taken money. We have all volunteered in this effort and have been quite honest. In fact, my trips to New York, San Francisco, and Vancouver to lobby for support we’re all paid out my own pocket. That being said we have negotiated a deal with our legal team that I can not disclose. However all the money will be going to pay for the legal costs. Disclosing that would only aid the opponents seeking to defeat the effort.

        The reason we are not doing an indiegogo/kickstarter: Those sites take a substantial 7% fee and it would be much cheaper to raise the money directly. Those sites only allow for a 3 month window for fundraising. We would have to raise all our money in 3 months for a legal effort that could be 2 years.

        If there was a get rich quick scheme this certainly isn’t it. I’ve also offered to refund any money leftover if we are not successful. Scott and I no longer work in the industry but there are people who still do. The costs of just moving around pale in comparison to the amount we are asking for.

      • jona says:

        Missed the point. You’re asking for money with no real plan to detail expenditures. I don’t know whether you want people to simply trust you or not but as with everything else, you’ll have to be open and clear about where their money will go. I never imagined you would be using it for personal purposes nor did I mean to imply that. People will be far more likely to part with their hard earned money if they see a path for it.

      • VFX Soldier says:

        No non-profit that I know of discloses the details of expenditures. The VES, Siggraph, and The Animation Guild do not disclose what they pay to hold organization drives, award shows, conventions, or even legal costs. We’re the only ones actually working on an effort on subsidies which many feel is the only hope.

        In all the talks I’ve held and even the original indiegogo fundraiser I made it 100% clear the costs would go to pay for a legal effort. I’ve also made it clear that the investigation takes a a year to 18 months by law.

        Jona, last time you came on my blog was to express criticism for me going to a politician like Mike Gatto saying I would get nothing. We now know that actually we were working on a successful addition of a trade provision supported by the CA Legislature to the current bill. We will continue to work with lawmakers to do even more for us.

        I’ve always opened this forum to people to discuss their solution. Some have come on this blog to say nothing should be done. In my opinion that actually costs more than our legal effort when you account for how much you have to spend moving around chasing work.

        On Thu, Aug 28, 2014 at 2:54 PM, VFX Soldier wrote:

        >

      • jona says:

        From my vantage point, all Gatto did was open the door to more subsidies in California, thus setting your cause back. That’s really all that is going on here.
        If many feel that you are their ‘only hope’ then you owe it to them not to simply create another VES. You’re basically saying ‘give me your money, I know what to do.’ I wouldn’t send money to anyone who can’t disclose the activities or expenditures of an organization claiming to be working to advance my standard of living.
        With all due respect.

      • minoton says:

        @jona, I’m trusting it’s going towards legal fees and nobody’s going out to amateur night at Spearmint Rhino. 🙂

      • VFX Soldier says:

        We have been in full disclosure as far as what we are doing with those funds. In fact we released a key 25 page report outlining what we do and the risks involved last year:

        https://docs.google.com/file/d/0B4u3k7ExaTQjanYweEtJWW9PVXM/edit

        I just want to make the distinction clear that we actually have been more open about the process than any other non profit in the VFX industry.

        Jona you’ve been an opponent of all the efforts of this blog for quite some time. I’d love to think your inquiry is about advancing the effort but my guess is you are looking to hurt it.

        There is a reason why the law firm is protecting important information about the effort and that is because opponents will look to kill our case before it makes it to the court. Will they be successful? Who knows but we’ve been quite honest working with a very good law firm and I will disclose info publicly when the law firm allows.

        >

      • jona says:

        minoton

        I don’t doubt that Daniel is worthy of everyone’s trust that reads this blog. When you’re asking for money, the best way to get the most contributors is to be completely open about how you are going to spend it. It doesn’t have to be a public disclosure. Contributors should have access and input to the process.

      • vfxmafia says:

        Hey Dan.

        Thanks for the update…and clarification.

  4. minoton says:

    http://www.latimes.com/entertainment/envelope/cotown/onlocation/la-et-ct-film-tax-credit-deal-20140827-story.html

    I see this helping the live action units primarily, but I hope the VFX amendment passed along as well.

    • minoton says:

      Not a fan of subsidies, but if other players aren’t going to level the playing field down to zero, CA might as well level up. Hopefully for the time it’s implemented, that will buy time for the CVD to happen. But I agree with the sentiments that it would have just been cheaper for the CA legislature to fund ADAPT’s efforts. But then ADAPT gets the credit for doing something and this gives credit to the politicians, who can thus campaign on “lookee what we did!”

      • vfxmafia says:

        Mono…

        I happen to agree with you…especially a year and half ago…..when the Cali subsidy money might have kept me in LA…

        1. unfortunately its too little too late. Too little because California is going up against over a BILLION in subsidies from around the world and in other states….and too late probably 2,000 of the 3,000 LA vfx workers are gone…..(and they aint coming back for 25% of AB1839)

        2. The Look FX syndrome.

        You will see more Look FX debacles showing up in Los Angeles. Look FX would have NEVER gotten shots from Noah if it wasn’t for NY subsidy money. Look FX was a complete Newbie studio handling 100+ shots from a big movie…..

        The subsidies allowed for enough money to grab a cut for the studio……..and enough money left over for a 911 call….perfect breeding ground for shady start ups….

        (now that alot of top end LA FX talent is up north) What you will see is alot rogue start up studios getting the money with 2/3 less talent…..and fucking up shots…..(just like early Vancouver used to have)…..you will start to see shops with little talent and no pipeline trying to grab a piece of the subsidy pie…..

      • minoton says:

        I wouldn’t say too little, too late. I’d say it’s a start.
        I really don’t know what the numbers are of expat Cali’s are up in BC, but to say they ain’t coming back is rather presumptive. They are there in Van for one reason only, the work. And once the work leaves for some place else, so will they. Whether it be L.A. or Timbuktu. Many up there still have homes and families back in Cali, and would much rather be back closer to them. If any work comes back to Cali, you know they are going to be pushing for it. The only people who will probably stay are the single young guns who have no roots or aren’t otherwise tied down.

        AB1839 is not going to decimate any existing subsidies or turn any tables in and of itself. It’s not the game changer a CVD would be. But it may lure some major work back to the states. SaveBCFilm was created for just that factor, losing high profile live action work to Michigan, Louisiana, Australia, and Montreal/Toronto. What AB1839 can do, is draw more attention to the fact that governments are spending constituents’ tax dollars to pay salaries of a specialized segment of the population. I still don’t think the average tax payer at large understands the full ramifications of what is actually transpiring. I’m sure they might have some vague awareness of the ‘tax credits’ spin without understanding that it goes beyond that. I wish somebody would take a ‘man on the street’ poll on Granville and ask random shoppers if they were aware that their taxes were reimbursing for close to 60% of your salary. And if they weren’t aware of it, now that they do, what do they think? Are they aware that the money actually leaves the country to line the pockets of million dollar studio execs and CEOs? Are they aware that every independent study shows the money spent doesn’t pay for itself? I would love to see a video poll taken over a weekend of at least 100 non-vfx worker respondents. It would be a bonus if some of those respondents were BC teachers who can’t get their wages increased.

        And let’s not forget the changes to Canada’s immigration laws. It’s not just a matter of how easy it is or isn’t for a person to get in, (i.e. NAFTA member) it’s a matter of can they get hired? All recruiting postings have to be submitted to CIC so that the government is aware that recruiting for a job(s) is happening. Canadians are supposed to get first crack at those jobs. If they are passed over, the companies have to show why those applicants were denied before they can start recruiting non-Canadians. And when someone is hired, CIC still gets to review that hire to see if it meets their criteria. Most likely this is going to slow down recruiting and probably hurt the average butt in the chair crew person. What CIC is primarily going to be looking for are the positions considered upper level with significant or proprietary skills or knowledge. A brain drain from other countries, if you will. If anything, people already up there just got more desirable because of being already there. If a company is trying to staff up big ( Sony) somebody already up there at a different company could just give themselves a raise . . . . (unless, of course, companies in Van are colluding on wage fixing, also.)

        California is not in competition against billions of dollars of subsidies, they are only in competition with whoever offers more. And AB1839 is not going to decimate anybody’s prior subsidy program. But it will, hopefully, put a brighter spotlight everywhere on subsidies overall, putting them in the news once again, and also hopefully buy some time for L.A./Cali workers for the CVD case to find funding and get launched.

      • vfxmafia says:

        sorry meant to address mino…

      • vfxmafia says:

        @mino

        Mino I wont argue if Canadian subsidies are more noble than US subsidies.

        I am actually more pissed off on what US tax dollars are spent on than the Candian tax dollars. I love to see in US news stories like in Ferguson (a po dunk down) with brand new assault tanks……You might want to conduct your poll down their and see how US black folks like their tax money spent on militarized police.. But thats not why im posting.

        I do believe there is a time limit on all this…….

        The longer these subsidies..are up here…it rips apart the LA infrastructure. It took hundreds of million of dollars to get companies up here (and up to speed)…..

        and if subsidies left……..costs just may be cheaper in Canada.

        1. you have 10-15% profit if you pay people in Canadian from exchange rates….and get paid by the studios in US money
        2. You have 20% profit from not having to pay health care for employees. (maybe more)

        Thats a 30-35% cheaper than conducting operations in the US.

        (and thats with no subsidies)……..

      • minoton says:

        @mafi, as a new ‘Canadian’, paying Canadian taxes, I would think how your new taxes are being spent would be of more concern to you. Since you are no longer paying American taxes, how they are being spent, right or wrong, is no longer of concern. As to the civil rights issues, yes, that concerns all of us. As for which is more noble, California subsidies or BC, I would say neither. In principle they both do the same thing, waste taxpayers’ money. It’s just a matter of degree as to who is wasting more.

        To the best of my knowledge, very little is cheaper in Canada. Vancouver still holds the dubious title of most expensive city in North America. That’s why so many people drive down to Bellingham and stock up at the CostCo there. As for the the 20% profit from not having to pay health care for employees, that cost is shifted to the employee in the form of taxes. Nothing is free. Score one for the greedy corporations and their CEOs for shifting costs to the workers.

      • William C. says:

        @minoton:
        I think today, those artists working in Canada (Canadians or not), pay their own salaries.

  5. Whoa says:

    Such a waste.

    California, NY, and all the other states (and countries) that have initiated and perpetuated this absurd subsidy race into the billions that further support multi billion dollar studios ought to be ashamed of this misallication of resources to very large and profitable companies that absolutely do NOT need it. Consider the myriad of other dire issues that could make great use of that funding. This is a shameful disgusting mark on our culture.

    • Nick says:

      Hey! Look over there! John Textor said something stupid! (cue 150 comments)

      • Nick says:

        Extremely relevant news pertaining to the state of Californian VFX industry (Crickets)…

      • vfxmafia says:

        @nick

        But nick this bill has no balls…..spends $300 million of the $400 million……%25 goes to VFX which is like $75 million….

        now put that against the Billion a year spent by UK and Canada combined….and you got jack shit…..

        (maybe Method will get a couple extra shots next year)

        Nothing changes…..too little too late…

      • vfxmafia says:

        (they got 300 million of the proposed 400 million)

      • Whoa says:

        What did you want us to say nick? There have been comments about this bill each step of the way. It passed and with little to nothing regarding the CVD except a recommendation which no one is holding their breath to have any effect. Should we whine more? I’m still hoping the CVD comes into effect at some point. This bill does almost nothing for us and perpetuates the subsidy race. There really isn’t much left to debate or argue about here.

  6. LAskyline says:

    $75 million on VFX is waaaay more than the UK spends. Most of the UK subsidy goes on production.

    • VFX Soldier says:

      that $75M figure is the first time I’ve heard of it and it came from vfxmafia:

      “spends $300 million of the $400 million……%25 goes to VFX which is like $75 million….”

      Lol sorry but that’s not how the program works. I’ll put up a post later in the week showing how it does work (or how it wont work for VFX)

      • vfxmafia says:

        yeah i was doing a quick estimate….i have no idea what the actual number is….

        but it would seem like its not alot compared to other countries VFX expendatures

      • Whoa says:

        It doesn’t really matter. If it’s not more than the highest bidder, and it’s not.

  7. […] As I said last week I think it’s great to see the legislature write a trade provision supporting our legal effort. AB1839 actually offers a subsidy for VFX but as you look into the details, you’ll quickly […]

  8. Whathappened says:

    I believe the feasibility study we donated to suggested a non political route that
    challenged subsidies as a problem with many players. Not just a war on the studios, a re-tar and feathering of
    Textor, and trashing of an India based VFX shop’s plan to try and make a buck any way they can on the same lopsided playing field as us.

    Handing over our cause to a politician who states to the press that we can’t use the very private law firm from which all of this sprung shows a weakening of our own loyalty
    within our own ranks, making us a campaign of promotion rather than attraction.

    What happened to 540 locals in the rain, the grass roots effort to gain our own ground before moving forward with logic and reasonable goals?

    Why are we now fighting windmills?

    I know this can not be Soldier’s plan because he is always right, so he constantly reminds us anyway.

  9. EnricoPerei says:

    This “digital import tax” actually raises prices, paves way for potential internet & “youtube” taxes and further taxes on non domestic software, games and other digital products like broadcast, news, music and communication !

    You shot yourself and all customers of digital products in the foot !

    I work in visual effects since 1999.

    Not once did I work in my home town or home state.
    Most of the time not even in my home country.
    Film production and post production are inherently independent from any given location.

    Our local LA collegues were very lucky having such a convenience they had.
    But how many working in LA have actually moved to that “production hub”, therefore aren’t technically locals ?!

    Do you really expect an entire global industry to work in your own backyard?!

    As a european I didn’t even consider thinking about the fact that I’d be “forced” to live and work “far away” on the shows I prefer working on.
    On the contrary, I enjoy falling in love with new countries, cities and its people.
    I’ve met so many highly talented artists I would never have become friends with, had I remained “petulantly at home”.
    I understand this is not for everyone, especially with family.

    However the “good ol’ days” of working at the same company in the same city all your life are long gone for most industries and finally (well, actually decades ago) globalization has reached our business as well.

    In my opinion your efforts against subsidy are ill advised and mix together, ignore or sideline other important issues of our VFX industry as well as global economics.
    They also diminish the fact that film productions and consecutively post production / VFX actually benefit from subsidies.
    Many more artistic, documentary or independent productions promising less success at the box office would never get made without governmental / public funds and incentives.

    Introduction of “import taxes” on digital goods is effectively still giving companies hidden subsidies / advantages but by punishing non domestic business, while providing the local government yet another new source of income.
    This secessionist / separatist behaviour is actually harmful, even dangerous in a global economy.

    Furthermore, film subsidies are no validation for a “fight” against “wasting tax money”, sorry.
    A glance at annual government expenditures exposes that Film/VFX subsidies can’t even be called pocket change, that’s how insignificant they are.

    Subsidy (for better or for worse) is an attempt to either keep or lure certain business in certain realms.

    It’s neither the enemy nor the saviour, just an unavoidable instrument of regulation and stimulus.
    Subsidy can also alleviate dependence and enable/preserve independence !

    My opinion is ambivalent about subsidy, especially considering that it (like anything else) is not immune to corruption, but does anyone really expect that the absence of it would have kept the status quo?!
    Moreso, was that even desirable? … is it ever ?

    Current world wide recession,the rapidly changing production & distribution infrastructure and consumer expectation has driven even the more profitable companies to re-evaluate their practices, thus expediting this process.

    For better or for worse(again), we’re required to be flexible and adapt, following work wherever infrastructure generates it in decreasing intervals.

    There is no chance whatsoever that local wages or economic circumstances can even begin to compete with many, newly emerging markets at (for some) remote parts of the world.
    So subsidy actually has the potential to counteract the migration of high value workplaces to low income areas.
    Until there is a utopian equality in all global markets (of both income and expenses for workers and businesses alike), money/production will shift from place to place in order to maximize margins and create new markets in order to generate demand and profit.
    Even then, this equality would actually cause stagnation in direct opposition to the core characteristics of our economic system.

    As another food for thought:
    The internet was created to be a decentralized structure in order to assure its functioning even while local disruptions occur.
    The very same goes for vfx and all other human endeavours if you ask me.

    …We’re moaning now, wait until the colonies on Mars, Moon and orbital stations begin shooting movies and churning out roto…

    sorry for the TL;DR (; it’s a complex issue.

    just my 2 cents,
    enrico,
    (world wide) visual effects & stereoscopic 3D,
    http://www.pocano-imaging.com

  10. Leif Einarsson says:

    The reason for using Kickstarter to fund the legal team is because Kickstarter plays to our cultural acceptability. Our culture (especially as digital artists) is one where casual, semi anonymous click funding is the norm while physical protesting is very uncomfortable. I don’t think indiegogo is even near as popular as Kickstarter, so go with the big K. And yes, it’s very possible for it to spread virally and get fully funded in a short time. Friends and families will add to it. In fact, that’s what we all want, a sudden push that wins and produces long term results, not some long drawn out marathon of fundraising.

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