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Alarming Production Drop Spurs Gavin Newsom to Propose Doubling Tax Credits to Hollywood

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Alarming Production Drop Spurs Gavin Newsom to Propose Doubling Tax Credits to Hollywood


MasterChef. Supergirl. The Kelly Clarkson Show. These productions all initially filmed in California but were convinced to leave at least in part due to more lucrative tax credits in others regions. Now, as runaway production and Hollywood cost-cutting threatens the state’s hold on the film and television business, Gov. Gavin Newsom is stepping in.

An early budget proposal looks to vastly increase California’s current cap for a program that provides tax relief to producers across the business from $330 million to $750 million a year, Newsom is set to reveal on Sunday. The expansion would shower as much as $3.75 billion in tax credits to the industry over five years starting in 2025.

If passed, the subsidy would be the most generous offered by any state except Georgia, which doesn’t have a ceiling on the amount it gives to productions per year. That includes New York, Hollywood’s second most-popular destination that California has increasingly been exchanging blows in a fight for productions amid a highly-competitive incentives race to attract Hollywood dollars.

“This means that film production can stay,” says Los Angeles mayor Karen Bass. “It means that all of the jobs that would be lost, because they they would go to another state or overseas, would stay here.”

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Further changes to the program have yet to be finalized. Potential amendments could affect the maximum amount a single production can receive in tax relief and what types of expenditures qualify for incentives.

“We’ll be taking into consideration a range of additions and potential fixes to the existing program,” says Colleen Bell, director of the California Film Commission, which oversees film and TV production throughout the state. “Everyone is in the business of luring production away from California. We have to invest in our lead and preserve jobs for Californians so they can do the jobs they love to do and put paychecks in their pockets.”

The move arrives after months of entertainment industry workers in the Los Angeles area speaking out about a lack of employment opportunities in the iconic production hub. In the wake of the 2023 writers’ and actors’ strikes, local crew members and creatives described an anemic return to production as major companies sought to slash costs and the era of Peak TV came to a screeching halt.

For some of these workers, the financial difficulties during the strikes and their aftermath have been significant: people have sold homes, lived out of cars and RVs and frequented food banks, with some leaving the business entirely for other fields. Increasing tax incentives to productions across the state emerged as a proposed remedy for the situation in June during labor negotiations for crew members who belong to the Los Angeles-area Hollywood Basic Crafts union coalition.

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A month later, Bass formed a taskforce to promote recovery of the industry in Los Angeles after production was disrupted the pandemic, strikes and industry contraction. Among its top priorities have been expanding the state’s tax film and TV tax credit program.

“This was the number one item on their agenda,” Bass says.

New data released on Oct. 16 shows that filming in L.A. is approaching historically low levels, with the three-month period from July to September seeing the fewest number of shoot days this year. The figure even falls short of shooting in the region during the same time last year, when the industry was halted by the work stoppage. Among the biggest causes for concern is a steep drop in unscripted TV production. Last quarter, shooting for the category fell roughly 56 percent compared to the same period last year. Filming for TV shows, long an anchor of filming in the area, continues to decline as every category of scripted production trails historical norms.

Directors Guild of America associate national executive director and western executive director Rebecca Rhine stresses that production in the state is currently in “real peril.” She adds that the governor’s proposal “provides an important acknowledgement that this is an industry that we want to keep in California.”

According to Rhine, the DGA and other industry unions have “spent a lot of time” talking to Newsom’s administration about their production concerns — “the high level of unemployment, the amount of work leaving the country, the inability to compete effectively with incentives elsewhere,” she says. “And I think that the governor was listening.” Rhine emphasizes that the film industry provides middle-class jobs with benefits to industry workers and brings work to various local vendors and indirect beneficiaries in the state, from dry cleaning services to florists.

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Newsom’s proposal aims to mitigate one of the major issues with California’s film and TV tax incentive program: Too many productions applying for the subsidies. These projects, when rejected, leave for other states and countries. Since 2020, the state lost $1.6 billion in spending from productions that applied for but didn’t receive a tax credit, according to the California Film Commission.

“It can’t be denied that one of the primary considerations for where projects shoot is whether they receive a tax credit,” Bell says. “Our program has been oversubscribed for a long time. We have this cap so we’ve had to turn away qualified productions that then go and take their projects elsewhere, along with jobs for Californians.”

With tax credits, productions may more easily be able to stomach higher costs for labor and shooting permits, among others things, in California compared to other regions.

Still, the state will continue to face stiff competition. The 20 percent base credit offered by California is lower than most competitive film hubs, including New York, New Mexico and the U.K. It’s also the only major production hub that bars any portion of above-the-line costs, like salaries for actors, directors and producers from qualifying for incentives. It’s an idiosyncrasy that the U.K. and Canada, another filming hotspot that has the added advantage of beneficial exchange rates and lower labor costs, have leveraged to become premier destinations for features.

California also doesn’t offer a standalone tax credit for visual effects. Several productions outsource postproduction work to countries that offer generous subsidies on this front, resulting in many VFX companies based in the state creating offshoots overseas.

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Canada and Australia offer the most lucrative tax relief on this front. Productions can get at least 30 percent of their post, digital and VFX spend back in those regions. In March, the U.K. unveiled a five percent bump and removal of the 80 percent cap for VFX costs in the country to stay competitive.

In addition to increasing the cap, the California Film Commission has cited the lack of a tax credit solely for VFX work to the governor’s office. “We’re in it to win it,” Bell says.

Compared to California, other regions have weathered industry contraction better. Some data indicates that competing international film hubs are seeing flat, or in some cases slightly rising, levels of filming. Last quarter, the U.K. and Canada each saw more live-action, scripted titles with budgets of at least $10 million actively filming within their borders, per data from industry intelligence platform ProdPro.

And it’s not just areas outside of the U.S. either. New York has proved more resilient than California, seeing about 75 percent of 2022 shooting levels.

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California

Dramatic explosion caught on video destroys homes, injures six, officials say

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Dramatic explosion caught on video destroys homes, injures six, officials say


A natural gas line leak triggered a dramatic explosion that destroyed a Bay Area home on Thursday, injuring six people and damaging several other properties.

At least one person was inside the home before it was leveled in the blast. The individual managed to escape without injury, but six others were hurt, including three who suffered serious injuries, Alameda County Fire Department spokesperson Cheryl Hurd said.

“It was a chaotic scene,” Hurd said. “There was fire and debris and smoke everywhere, power lines down, people self-evacuated from the home. … Someone was on the sidewalk with severe burns.”

The leak started after a third-party construction crew working Thursday morning in the 800 block of East Lewelling Boulevard in Hayward struck a Pacific Gas and Electric underground natural gas line, according to a statement from the utility.

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Fire crews were first dispatched to the scene at 7:46 a.m. after PG&E reported a suspected natural gas leak, Hurd said. PG&E officials were already on scene when fire engines arrived, and reportedly told firefighters their assistance was not needed, Hurd said.

Utility workers attempted to isolate the damaged line, but gas was leaking from multiple locations. Workers shut off the flow of gas at about 9:25 a.m. About ten minutes later an explosion occurred, PG&E said in a statement.

Fire crews were called back to the same address, where at least 75 firefighters encountered heavy flames and a thick column of smoke. Surrounding homes sustained damage from the blast and falling debris. Three buildings were destroyed on two separate properties and several others were damaged, according to fire officials.

Six people were taken to Eden Medical Center, including three with severe injuries requiring immediate transport. Officials declined to comment on the nature of their injuries.

Video captured from a Ring doorbell affixed to a neighboring house showed an excavator digging near the home moments before the explosion. The blast rattled nearby homes, shattered windows and sent construction crews running.

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Initially, authorities suspected that two people were missing after the blast. That was determined not to be the case, Hurd said.

“They brought in two cadaver dogs looking to see if anyone was still trapped under the rubble, and the dogs cleared everything,” Hurd said.

Brittany Maldonado had just returned from dropping off her son at school Thursday morning when she noticed a PG&E employee checking out her gas meter. He informed her that there was an issue and they had to turn off the gas to her home.

She didn’t think twice about it.

“About 45 minutes later, everything shakes,” she told reporters at the scene. “It was a big boom…first we think someone ran into our house—a truck or something—and then we look outside and it’s like a war zone.”

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The house across the street was leveled, Maldonado said. When she watched the footage from her Ring camera she said it looked as though a bomb inside the home had gone off.

“I’m very glad that no one lost their lives,” she said.

Officials with the Sheriff’s Office, PG&E and the National Transportation Safety Board are continuing to investigate the circumstances that led to the explosion.

In 2010, a PG&E pipeline ruptured in a San Bruno neighborhood, destroying 38 homes and killing eight people. California regulators later approved a $1.6-billion fine against the utility for violating state and federal pipeline safety standards.

Staff writer Hannah Fry contributed to this report

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Neil Thwaites promoted to ‘Vice President of Global Sales & California Commercial Performance’ for Alaska Airlines and Hawaiian Airlines – Alaska Airlines, Hawaiian Airlines and Horizon Air

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Neil Thwaites promoted to ‘Vice President of Global Sales & California Commercial Performance’ for Alaska Airlines and Hawaiian Airlines – Alaska Airlines, Hawaiian Airlines and Horizon Air


Thwaites will lead the strategy and execution of all sales activities for the combined Alaska Airlines and Hawaiian Airlines team. His responsibilities include growing indirect revenue on Alaska’s expanding international and domestic network, as well as expanding Atmos for Business, a new program designed for small- and medium-sized companies.

Thwaites joined Alaska Airlines in January 2022 as regional vice president in California. Since stepping into the role, Thwaites has significantly sharpened the airline’s focus and scale in key markets and communities across the state, strengthening Alaska’s position as we continue to grow in California. He will continue to be based at the company’s California offices in Burlingame. The moves take effect Dec. 13, with Thwaites also continuing to lead his current California commercial planning and performance function in addition to Global Sales.

Prior to Alaska, Thwaites worked in multiple positions within the airline industry, including a decade holding roles in London, New York, and Los Angeles for British Airways (a fellow oneworld member); most recently as ‘VP, Sales – Western USA’, where he was responsible for market development strategy and indirect revenue for both British Airways and Iberia across the western U.S.

Thwaites is originally from the United Kingdom and graduated from the University of Brighton with a double honors degree in Business Administration & Law.

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Tiny tracker following monarch butterflies during California migration

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Tiny tracker following monarch butterflies during California migration


SAN FRANCISCO (KGO) — When this monarch butterfly hits the sky it won’t be traveling alone. In fact, an energetic team of researchers will be following along with a revolutionary technology that’s already unlocking secrets that could help the entire species survive.

“I’ve described this technology as a spaceship compared to the wheel, like using a using a spaceship compared to the invention of the wheel. It’s teaching us so, so much more,” says Ray Moranz, Ph.D., a pollinator conservation specialist with the Xerces Society.

Moranz is part of a team that’s been placing tiny tracking devices on migrating monarchs. The collaboration is known as Project Monarch Science. It leverages solar powered radio tags that are so light they don’t affect the butterfly’s ability to fly. And they’re allowing researchers to track the Monarch’s movements in precise detail. With some 400 tags in place, the group already been able to get a nearly real time picture of monarch migrations east of the Rockies, with some populations experiencing dramatic twists and turns before making to wintering grounds in Mexico.

“They’re trying to go southward to Mexico. They can’t fight the winds. Instead, some of them were letting themselves be carried 50 miles north, 100 miles north, 200 miles the wrong way, which we are all extremely alarmed by and for good reason. Some of these monarchs, their migration was delayed by two or three weeks.

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According to estimates, migrating monarch populations have dropped by roughly 80% or more across the country. And the situation with coastal species here in California is especially dire. Blake Barbaree is a senior scientist with Point Blue Conservation Science. He and his colleagues are tracking Northern California populations now clustered around Santa Cruz.

MORE: Monarch butterflies to be listed as a threatened species in US

“This year, there’s it’s one of the lowest, populations recorded in the winter. And the core zones have been in Santa Cruz County and up in Marin County. So we’ve undertaken an effort to understand how the monarchs are really using these different groves around Santa Cruz by tagging some in the state parks around town,” Barbaree explains.

He says being able to track individual monarchs could help identify microhabitats in the area that help them survive, ranging from backyard pollinator gardens to protected open space to forest groves.

“So we’re really getting a great insight to how reliant they are on these big trees, but also the surrounding area and people’s even backyards. And then along the way around the coast, how they’re transitioning among some of these groves. And we’re looking for some of the triggers for those movements. Right. Why are they doing this and what’s what’s driving them to do that? So those questions are still a little bit further out as we get to analyze some more some more of the data,” he believes.

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And that data is getting even more precise. The tags, developed by Cellular Tracking Technologies, can be monitored from dedicated listening stations. But the company is also able to crowdsource signals detected by cellphone networks on phones with Bluetooth connectivity and location access activated. And they’ve also helped develop an app that allows volunteers, citizen scientists, and the general public to track and report Monarch locations themselves using their smartphones.

CEO Michael Lanzone says the initial response has been overwhelming.

MORE: New butterflies introduced in SF’s Presidio after species went extinct in 1940s

“We were super surprised to see 3,000 people download the monarch app. It’s like, you know, but people really love monarchs. There’s something that people just relate to,” says Lanzone who like many staffers at Cellular Tracking Technologies, has a background in wildlife ecology.

A number of groups are pushing to have the monarchs designated nationally as a threatened species. If that ultimately happens, researchers believe the tracking data could help put better protections in place.

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“They’re highly vulnerable to, you know, some of the different things that that that we as humans do around using pesticides and also potentially cutting, you know, cutting down trees for various reasons. Sometimes they’re for safety and sometimes it’s, you know, for development. But so having an understanding of how we can do those things more sensibly and protect the places that they need the most,” says Point Blue’s Barbaree.

And it’s happening with the help of researchers, citizen scientists, and a technology weighing no more than a few grains of rice.

The smartphone app is called Project Monarch Science. You can download it for free and begin tracking.

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