The Motion Picture Association issued a report on Tuesday estimating that U.S. film and TV production would double by 2032 if Congress passes a federal film incentive. The report, prepared by Olsberg SPI, also projects that a 20% federal credit would create about 143,500 production jobs per year. The MPA is working with a coalition of Hollywood unions to campaign for a tax incentive to revive the flagging domestic industry.
President Trump endorsed the idea last month, leading to renewed interest on Capitol Hill, where a bill is expected to be introduced by the end of this month. The Olsberg study has been in the works for several months, and is intended to help build momentum for the legislation. According to the report, spending on film and TV would grow to $34.7 billion by 2032 with an incentive — compared to just $16.9 billion without it.
The Olsberg report rests on the assumption that a federal incentive will allow the U.S. to reclaim a sizable majority of global production market share. According to data provided to the MPA by ProdPro, the U.S. currently accounts for 34% of global film production and 42% of TV production. Without a U.S. incentive, the study assumes that those figures will dwindle to 25% and 29%, respectively, by 2035.
With an incentive, the study assumes that U.S. market share would dramatically increase to 65% of global production spending. The only basis the report offers for that assumption is a FilmLA report from 2015, which found that 65% of a study group of 109 films from that year were made in the U.S. The MPA study also looked at 20 films produced by member companies, and found that a 20% credit would make 16 of them competitive to produce in the U.S., compared to a foreign locale, “suggesting the credit would produce a substantial uptick.” In 2017, there were 86 national, state and provincial incentives around the world.
There are now 121, and production hubs have grown in places like Ireland, Australia, South Africa, Eastern Europe and South Korea. The study assumes that external factors remain static, and does not account for whether other countries would respond to a U.S. tax credit by increasing their own incentives. Unlike many economic impact reports, the study does not hazard a guess as to the economic return per dollar invested.
That’s at least in part because the details of the proposal have not been finalized, and the cost is unknown. The measure will go to the Joint Committee on Taxation for a score that will estimate the cost to U.S. taxpayers. Pictured: Charles Rivkin, chairman and CEO of the Motion Picture Association
Extract — continue reading at the source.
