To hear some Hollywood players tell it, the film capital will soon become a ghost town thanks to "runaway production" -- the local term for filmmaking that takes place outside California.
With lower costs -- principally labor -- luring producers away, the state Assembly passed two bills this session granting tax credits for wages paid to union workers on low-budget films made entirely within California.
But while the bills await the next plot twist in the Senate, a handful of Hollywood companies are finding a way to cash in on the exodus from Tinseltown.
Sometimes called "international film liaisons," these middlemen make it easier for production companies to shoot their projects outside of Hollywood -- outside of the U.S. entirely, in fact. The liaisons try to eliminate the headaches of shooting in foreign countries by obtaining permits, hiring crews, negotiating tax breaks, renting equipment and even taking on local "producers" to qualify a project as a product of the host nation. And, in many instances, they help convince production companies to shoot abroad in the first place by explaining how parts of the foreign country look just like the U.S. -- or how overseas production can fatten a project's bottom line.
"It's just getting better each year," says Dale Kushner, executive producer and president of Africa Film Services Inc. in Los Angeles, whose clients have produced commercials for Motorola satellite phones in Namibia and the Seychelles, and spots for Country Time lemonade in South Africa. "There's definitely been more work."
Mr. Kushner, a South African citizen and permanent U.S. resident, received about 35 inquiries last year, a fourfold increase from 1996. About one out of 10 leads to a foreign contract, he says.
Los Angeles-based Milk & Honey Production Services Inc., which brought shoots for Mountain Dew commercials to Prague and arranged for the Mexican production of such made-for-TV movies as "Primal Force" and "Reunion: Journey Beyond the Bermuda Triangle," saw its revenue increase to an estimated $10 million this year from $4.5 million in 1996. "It has been a very rapid growth," says Howard Woffinden, Milk & Honey's owner. "We found a niche that was waiting to be filled. It was a classic case of the right place at the right time."
The British-born Mr. Woffinden came to Los Angeles to work in the music-video business in 1981. He now spends most of his time in Prague, although his company continues to have its headquarters in Los Angeles and has offices in London, Mexico City, Montreal and Moscow.
Production houses make movies and TV spots abroad to take advantage of scenery, weak currencies, government subsidies, lower crew salaries, inverted seasons and even freedom from a Screen Actors Guild contract clause that guarantees actors certain residuals for subsequent broadcasts of commercials and programs. But production houses turn to film liaisons because the pitfalls of shooting overseas can overshadow the benefits, especially if the reason for moving the project abroad is to save money.
"You don't want your camera or film to be tied up for three weeks because someone in customs wants to impose a 100% tax on it -- which has actually happened," says John Furia Jr., chairman of the writing department at the University of Southern California's film school. With a crafty middleman on one's side, "the government would let you shoot on their property or use members of their military as extras."
Michael Jaffe, partner and president of Jaffe-Braunstein Films Ltd. in Los Angeles and a minority partner in a film-liaison company based in Montreal, says, "I've had associates that go to shoot in Canada -- projects on the same scale as ones I've done -- and after picking their brains I found out that they spent $200,000 more on the same {type of} movie" because they didn't have anyone to show them how to save money abroad. "So is it worth paying us a service fee of $36,000 to save $200,000? Sure."
That's scant comfort to allies of Hollywood's workers and smaller businesses that depend on film production. "Some of these companies may get short-term benefits, but over the long term it will adversely effect the economy of the area and the entire state," says Assemblyman Scott Wildman, a Los Angeles Democrat who introduced one of the tax-credit bills. "We have the best infrastructure and the most highly qualified personnel" right here, he says.
Film liaisons reject the notion that they're ushering Hollywood to an early grave. They say that many of their clients would not be able to shoot at all if they had to pay the going rate in Los Angeles. Moreover, the brokers say, overseas shoots may end up benefiting the California economy, since the money that production houses save by moving workaday commercials and TV movies out of state enables them to shoot bigger-ticket projects in Hollywood.
If producers add up the numbers and say "`We don't have enough to do this in L.A.,' should we kill the project and have no product?'" says Marc Blitstein, U.S. production manager for Cine South de Mexico and a freelance film producer for eight years. "No, because they have the option to go abroad. And ... production crews and ad agencies, at least, can make money and eventually be able to afford the more expensive jobs that might shoot in L.A."
To be sure, there's not always a happy ending to runaway production. The enterprise has plenty of headaches, such as when production companies run into local laborers unaccustomed to Hollywood's normal 14-hour workday, or when foul weather delays an exterior shot. And critics point out that the costs of shooting abroad -- especially travel costs -- can quickly overwhelm the labor savings.
"Locations are not less expensive," says Olivia Nagel, a spokeswoman for the Film and Television Action Committee in Studio City, a group backed by the Screen Actors Guild and others that support the tax credits. "By the time you get frisked at the border, if you even get your equipment out of the country, you've paid more."
--- On the Run?
Some Hollywood unions and support-service companies complain that
film production is fleeing the Golden State. Here's a look at where
movies are being made.
Total Feature Film Production Starts
Area 1995 1996 1997 1998
California 439 574 637 510
New York 60 63 79 75
Texas 17 34 17 36
U.S. TOTAL 569 702 823 744
Canada 38 58 38 59
Britain 33 37 32 15
Australia 4 8 7 9
Source: California Film Commission
| 
