by David Robb
Florida’s film and TV industry is in a free-fall after the state scrapped its film incentives program earlier this year. Productions are leaving, vendors are fleeing, and workers are moving to Georgia in the wake of a concerted and well-financed campaign by the billionaire Koch brothers and their conservative allies in the state legislature to kill the Sunshine State’s incentives. It’s an exodus of epic proportions, but if a movie were ever to be made about it, it would probably have to be shot in Georgia.
“The industry here is one step away from dead,” said Fred Moyse, business manager of IATSE Local 477, which represents film crews in southern Florida. “We’ve lost a third of our members. It’s been devastating to the men and women who work in this industry, and crippling to the small businesses that support it.”
“The loss of incentives has hurt everyone in the industry,” said Miami-based casting director Ellen Jacoby. “It’s hurt the casting directors, the talent agencies, the actors, and the vendors. It’s hurt people paying their mortgages, and so many support businesses. It’s hurt the local markets and gas stations and lumber stores. It’s hurt so many people.”
In 2006, Florida’s film commission boasted that the state, once dubbed “Hollywood East,” was “the third-largest filmmaking state in the nation” – behind only California and New York. “We were always No. 3,” Jacoby lamented. “Everyone wanted to come to Florida to film. Now we’re not in the top 20.”
ARRI Rental, one of the industry’s leading suppliers of camera, grip and lighting equipment, is closing its Florida office at the end of the month due to a lack of production in the state. “The continued lack of funding for the state’s film production tax incentive program and the subsequent decline in business creates a very challenging environment and unfortunately there is no alternative option,” the company told its customers recently. “As productions move freely to take advantage of the best economic environments, our rental business must likewise be flexible and responsive to remain successful. All subsequent ARRI Rental projects shooting in the state will be serviced by our Atlanta office.”
“The office is closing because the business went away,” said ARRI VP Ed Stramm, who opened the company’s Florida outpost 14 years ago. “It’s gone dead. It just went away. It was a political move by the legislature to cancel all incentives, including the film incentives. It’s devastated the industry. Every technician I know is now in Atlanta. The entire infrastructure is moving out. Every one of my competitors in the camera world is affected. There’s nothing driving the business. It’s a bad time for the film industry in Florida right now.”
The state’s incentives program was launched on July 1, 2010, and ended on June 30, 2016. The Florida legislature initially allocated $242 million in tax credits for the program; it added an additional $12 million in 2011, and another $42 million in 2012, for a total of $296 million – less than California spends in one year on film incentives.
Since 2012, however, the state’s Republican-dominated House of Representatives – with the backing of the Koch brothers – refused to allocate any more money for the program, and it ran out of money last year.
“We were, by and large, the only organization in the state arguing against those incentives, and we’ve been doing it for the last four years,” said Andres Malave, communications director for the Florida branch of Americans for Prosperity, the Koch brothers’ ultra-conservative lobbying group, which is ideologically opposed to all forms of incentives that target specific industries. “It’s not the government’s role to pick winners and losers. The film industry is an important part of the economy, but the legislature should implement policies that benefit businesses across the board.”
AFP was founded in 2004 with funding from David and Charles Koch, co-owners of Koch Industries, and younger brother David serves as chairman of the AFP Foundation, a separate tax-exempt outreach organization.
“The Kochs helped finance the organization from the early onset,” Malave told Deadline. “We’ve grown since we were founded in 2004, and more than 100,000 other individuals have donated, and the Kochs were certainly a big part of that.”
A spokesman for Koch Industries did not respond to Deadline’s request for comments on this story.
Data compiled by the Florida Secretary of State’s office shows that over the past three election cycles, Koch Industries has made the maximum allowable campaign contributions to more than 50 members of the Florida House who opposed the incentives, while Americans for Prosperity actively campaigns against those who support tax credits.
In a heated Florida Senate hearing last year, Sen. Nancy Detert took AFP lobbyist Skyler Zander to task for targeting her because of her support of tax incentives. “I appreciate the mail-outs that you do against me on a monthly basis that say I give money to Hollywood moguls, which, of course, I don’t have any money to give, and neither does the state of Florida give money to Hollywood moguls,” she told him. “You’re all on the Koch brothers’ payroll. Good for you. I’m glad you’re all employed. I hope you’re getting paid a lot of money to show up to these meetings and say meaningless things. Obviously you’re for prosperity for yourself and not anyone else. You people serve absolutely no purpose.”
There are currently no major feature films shooting in Florida. Two recent films – Gifted and Live By Night – that are set in the Tampa area were shot in Georgia to take advantage of that state’s generous incentives.
“Those were two big ones we lost in the last year,” said Tony Armer, head of the St. Petersburg/Clearwater film commission. “They came multiple times to scout the area, but with no state tax incentives, it didn’t happen.”
Gifted, starring Chris Evans and Octavia Spencer, is set in St. Petersburg but filmed in Savannah. And Ben Affleck’s Live By Night found it cheaper to re-create an entire Tampa neighborhood in Georgia rather than film in the actual Tampa neighborhood.
That stands in sharp contrast to recent comments made by Richard Corcoran, speaker-designate of Florida’s Republican-dominated House of Representatives. Corcoran, who calls incentives “corporate welfare” and “de facto socialism,” is one of the leaders of the conservative legislature’s anti-incentives crusade. Up for re-election next month, he received the maximum $1,000 contribution from Koch Industries – out of the nearly $312,000 he’s raised so far – and another $1,000 in 2014.
Last month, he and Jose Oliva, who’s already designated to succeed Corcoran as Florida House speaker in 2018, were awarded the Americans for Prosperity’s highest honor – the Washington Award, which is given to those “who not only stand for the group’s values, but make progress toward policies that spread economic freedom and prosperity.” Like Corcoran, Oliva’s election campaigns received the maximum $1,000 contribution from Koch Industries in 2014 and 2015.
In August, Corcoran and Oliva were among the 46 Florida House members who the AFP named “Champions of Economic Freedom” – all but 10 of whom have received maximum campaign contributions from Koch Industries over the last three election cycles.
Speaking last week at the Texas Public Policy Foundation, Corcoran described how the House Republicans stood firm against film incentives. “We said no to tax incentives for film. And guess what? Every Hollywood producer came and said, ‘We’ll pull our…’ ” he said, trailing off before he finished saying they threatened to pull productions out of the state. “They film in the Keys; they film in Miami,” he continued. “Haven’t lost one. Every single one of them said they’re staying, and the reason is because you can’t re-duplicate the Keys in Oklahoma.”
Perhaps not in Oklahoma, but the setting of any film can be changed or re-created in another state, as the producers of Live By Night can attest. Or in the case of Netflix’s Bloodline, which is actually shooting in the Florida Keys, they can just call it quits after three seasons. HBO’s Ballers may soon be shooting elsewhere, although HBO said that expects that “some component” of the show’s third season will remain in the state.
“The Florida film incentive was a key factor when deciding to set up the production of Ballers in Miami,” an HBO spokesperson told Deadline. “With the incentive no longer available, we have begun evaluating the best way to serve Season 3, including an option to remain in Miami. Whatever the final decision, we believe some component of the series will be shot in Florida.”
The loss of those two shows – if it comes to that – would even further decimate the state’s film and TV industry.
An analysis by Film Florida, a trade association that promotes the state’s entertainment industry, found that Florida has suffered $650 million in “known lost opportunities” and $1.8 billion in “potential positive impact on state GDP” because dozens films and TV shows that said they wanted to shoot in Florida went somewhere else because of the lack of incentives.
“I’m a producer here in Florida, and I’ve always made a decent and fantastic living, but I’m no longer doing that here because we no longer have film incentives,” said Elayne Keratis, who produced the TV series South Beach and co-produced Burn Notice in the state.
Special-effects coordinator Bruce Merlin, whose Merlin Production Solutions created mechanical special effects in South Florida for more than 30 years, closed his shop in Dania Beach three months ago and moved to Atlanta. “I was born in Miami and started on Miami Vice – the TV show, not the movie,” he laughed. “But I gave up and moved to Georgia, sad to say.”
“We’ve probably lost 90% of the stunt people here,” said veteran stuntwoman Rosie Bernhard. “Without the incentives, they’re just not going to shoot here. They really did a number on us. We went from No. 3 in the country, to I don’t know if we even have a number anymore.”
The state still offers a sales tax exemption on the purchase or lease of certain items used exclusively in film and TV productions, and several local film commissions offer hotel discounts and grants to encourage filming there, which is how The Infiltrator, starring Bryan Cranston – which filmed mostly in London – and Tim Burton’s Miss Peregrine’s Home For Peculiar Children – which filmed mostly in England and Belgium – each ended up shooting for a week or two in the Tampa area.
Almost everyone agrees that the state’s now-defunct film incentives program was seriously flawed. A 2015 report by the Florida Office of Economic & Demographic Research found that in its first three years, the incentives had a return on investment of only 43 cents for every tax-dollar spent to fund them – although notably, this did not take into account other economic and tourism benefits that filming brings with it. And because the incentives were doled out on a first-come-first-served basis, no preference was given to projects that might create the most jobs or produce the greatest economic impact.
That’s how 20 video games got more than 17% of all the incentives – more than $50 million of the entire $296 million awarded over the five-year life of the program – while creating only 3.8% of the jobs, according to the OED report.
In the last year of the program, five Madden NFL video games got more than $21 million in tax incentives – more than the feature film Dolphin Tale 2 ($5 million) and the entire first seasons of Bloodline ($8 million) and Ballers ($6.8 million) combined. Video game NBA Live got more than $7 million; PGA Golf Tour got $3.2 million; Tiger Woods PGA Tour got $2.2 million, and NCAA Live got $2.9. And like Madden NFL, they’re all produced by EA Sports out of its studios in Orlando.
Interactive websites, meanwhile, got nearly 2% of all incentives ($5.8 million) but only created 0.15% of the jobs. All of that money went to one company – Orlando-based Golf Channel. Digital media projects also proved a waste of taxpayers’ dollars, creating less than 1% of the jobs but receiving 3.5% of all the incentives.
Projects that created the most jobs – TV series and feature films – received a disproportionately lower percentage of the incentives. Nineteen “high impact” TV series like Ballers, Bloodline, Charlie’s Angels, and The Glades accounted for nearly 45% of the jobs created but received only 31% of the incentives. TV pilots, meanwhile, accounted for nearly 4% of the jobs created but received less than 1.3% of the tax subsidies. Forty-five theatrical motion pictures created 14.4% of the jobs but got only 11.2% of the incentives.
But instead of trying to fix the incentives program, AFP, the Koch brothers and the Florida legislature decided to kill it, along with the thousands of jobs it created – not just for film industry veterans in the state, but for graduates of Florida’s film schools as well.
“The loss of incentives has dried the business up,” said longtime South Florida marine coordinator Ricou Browning. “It’s dwindled down to next to nothing. A lot of the people in the industry have had to move to Georgia. I don’t know if the next generation of filmmakers from this state will be able to have the same advantages I had. It was pretty steady work and we had a great infrastructure for decades, but now that infrastructure is leaving for other states. Kids are graduating from film schools at Florida State and the University of Miami, but without the business here, they don’t have the internships or the jobs when they get out of school. It’s just a sad state of affairs.”
The business, he said, “is gone and it’s gone due to politics. The work goes where the dollar is. All these politicians are more concerned with their office rather than the people of this state. All those politicians should be voted out of office.”
“We have third-generation industry people here who are now leaving the state to find work,” said talent agent Kelly Paige, president of Film Florida. “But the really sad thing is that we have two of the best film schools in the country here, and when students graduate, they have to leave the state. We’re educating them with our tax-payer money and they’re graduating and fleeing to California and Georgia. They’re leaving as soon as they get out of school. They’re not buying homes here; they’re not buying cars here. I’m sure that [California] Gov. Jerry Brown must be thrilled that our best young filmmakers are coming to California. It’s really a shame.”
Those who aren’t leaving aren’t giving up. “The top priority for our industry is to come up with a program that works for Florida,” said John Lux, executive director of Film Florida. “Our goal is to sit with legislative leadership and work together on a program that helps the state and the industry by bringing companies and projects to Florida that hire Floridians, spend money in our communities and highlights our state as a tourist destination. We would hope those legislators that are against us would be open to collaboratively working something that helps everyone.”
“We live in a global economy,” he said. “We’re no longer competing against our neighbors. We’re competing against the rest of the world. To sit back and say we’re not going to compete and expect the economy to grow is outdated thinking.”
Filming has always been an international business, but tax incentives greatly expanded the globalization of the industry. The 1994 North American Free Trade Agreement that gave Canada a “cultural exemption” to subsidize its film and TV industry set off a flood of American productions heading north of the boarder to take advantage of 35% tax credits there. Other countries followed suit, luring productions to all corners of the globe with generous subsidies in the hope of bringing jobs and American dollars to their shores. Just this week, China became the latest country to join the tax incentives game, with the Wanda Group announcing it will offer 40% rebates to productions that film at its facilities in eastern China – by far the most generous incentives in the world.
In an attempt to stem the flow of runaway production, or to create film communities where none existed before, dozens of states began to offer their own subsidies – programs that helped states like California, New York and Florida hold onto their well-established film colonies, and that helped create new ones in Georgia, Louisiana and New Mexico.
But the rapid demise of the film industry in Florida after incentives were abandoned there shows just how fickle the industry can be, and how quickly it can pivot to follow the incentives being offered in other states and countries.
Many in the Florida film industry are pinning their hopes on David Yates, CEO of Clearwater Marine Aquarium and producer of the Dolphin Tale movies, who’s working on a “new approach” to revive the state’s moribund film industry. “We are exploring some new business-oriented ideas that might be more acceptable to the Florida legislature,” he told Deadline. Yates declined to discuss specifics, but if it involves the word “incentives,” it’s almost certainly doomed – and the Florida film and TV industry along with it.
“Incentives is a difficult word to use in Florida,” said Mike Miller, a Republican member of the state legislature who was targeted by Americans for Prosperity for his support of film incentives. “Their organization does a lot of good things, but they were frustrated with my support of incentives.” Even so, he vowed “to do everything I can to help the film industry here in Florida.”
If r-eelected in November, he will no doubt be one of the state legislators that a coalition of industry workers and businesses will be reaching out to in an effort to save the states film and TV business.
“Without a common sense approach to rebuilding this industry, Florida motion picture production will continue to decline to the point where it will be almost impossible to rebuild because the workforce and infrastructure will have entirely left the Sunshine State,” said Chris Ranung, president of IATSE Local 477 and chairman of the Congress of Motion Picture Associations of Florida, a nonprofit group representing industry workers and support businesses. “In the absence of additional tax credits, which we know will never be restored under the current legislature, there’s a critical need to develop a new program based on pragmatic business sense to reinvigorate Florida motion picture and television production.”