Helping Producers Get Perks for Running Away From L.A.

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Runaway film and TV production has been a plague on Hollywood’s house for years, but it is providing a business opportunity for a couple of local companies.


About 30 U.S. states presently offer tax incentives for television and film production, with Louisiana, New York, New Mexico, Connecticut and South Carolina among the most successful in luring producers to their money-saving shooting locales.


L.A.-based production payroll and accounting services firms Entertainment Partners Group Inc. and Axium International Inc. are both advising producers on how best to take advantage of the myriad production incentives on the market. And both are giving the advice for free.


The need for the guidance Axium in particular strenuously opposes the “consultant” label developed on both sides of the equation: from the productions trying to take advantage of incentives and the local film commissions or governments trying to draft meaningful legislation to lure production.


“There was a strong need for someone to help our clients with incentives,” said Joe Chianese, Entertainment Partners’ vice president of business development and production incentives and former senior tax director at Sony. “They wanted to know how to apply for them, how they work, where to go, who is offering what, and how to get the best deal.”


In the past, Canada and Europe have both been big production destinations, but many states are ramping up their incentive offers, and designing those offers to make them as attractive as possible is becoming more competitive and complex.


“It’s a complicated system; we basically became lobbyists,” said Jeff Begun, a former producer who heads Axium’s tax incentive division along with former attorney and studio exec Dama Chasle.


“Sometimes (legislators) don’t craft meaningful legislation despite their best intentions, because they don’t know how movies work,” Chasle said.


The states with the most meaningful incentives are the ones that have local crews and infrastructure New Mexico, for example, has trained film crews available and is building a huge production facility in Albuquerque.


Axium puts out a publication, “The Complete Guide to U.S. Production Incentives,” five or six times a year, typically for marquee film festivals like New York’s Tribeca or France’s Cannes. Begun also sends “The U.S. Incentives Newsletter,” an e-mail update sent every month.


Entertainment Partners is planning to aggregate similar offerings on a Web site shortly, which will allow for easy updates and accessibility, not to mention saving the cost of printing. The company which also owns Central Casting is also developing software to automate the process.


And with all the attention incentives are getting, more players are certain to try to get in on the action, though executives from both companies said that high barriers to entry for startups (and the size of their existing client bases) make them feel safe for now.


There are naysayers, though, and some say the clearing-house approach, while expedient, isn’t always the best financial analysis.


“Every project brings something unique to table,” said Bill Lindstrom, CEO of the Association of Film Commissions International. “Tax credits, for example, will have a different impact on one project than another. Sometimes the overview isn’t necessarily the whole story.”


The vast majority of the information is available online, but it’s not always easy to access and utilize.


“There’s always free information. It’s out there and people can find it,” Lindstrom said. “With charging for services it’s a question of whether the value matches the cost.”


Chianese and Begun said their respective companies don’t have any plans to charge for the advisory services for now. Both companies will grow their incentive divisions in the immediate future and are hiring veterans in the production world to help the budding segments.


While lending the expertise of highly qualified industry professionals at no cost may not seem like good business, it is an effective way to drive the counsel-seekers to other ancillary services like payroll especially when the advice equals cost savings for the productions.


Many states require the use of local vendors to qualify for the tax breaks, and Axium, for example, has set up shop in a lot of states for that very reason.


“I think ultimately when the dust settles there will be incentives in every state and producers will go back to making decisions on a creative basis,” Chianese said. “But there’s always going to be a need for people to help the clients or industry understand how the rules work.”

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