Too many film people in our industry are out of work. Far too many more will lose jobs if the illegal merger is allowed to go through. Too few can ever look forward to a sustainable career now. The talent that might have changed the world or cinema may never get their start.
And far too little is being done to resolve these issues.
People talk about runaway production. But I don’t think that phrase is at all accurate. We’ve pushed it away. Pushed it away to far off lands. The question needs to now become how to entice it back. And it is not only a question of money or tax incentives — although enacting better ones could certainly help.
And it’s not just that we let film production in the US get too expensive. We also let it get too annoying. Too complicated. Not smart enough. And too hard to enter and be prolific in. It is harder than ever to maintain your own production company if you want to produce films. I don’t know about you, but I have trouble believing any of this is accidental…
I have been making movies in America for over 40 years. I have had three production companies. I am significantly pro-labor and pro-union. I don’t find labor or the unions particularly pro-producer in return, and I certainly do not find any of them pro-indie. It’s unfortunate because although “indie” will never be the top job provider, it will always be more nimble and innovative and help show us all where things might be headed. All of America’s top filmmakers came out of what was called the “Indie” system, and that system has been destroyed by another system prioritized above it.
Our entire American film ecosystem is built for something else. Our entire American film ecosystem is built only for the large corporate players and everyone else can be damned. That’s the truth, Ruth.
This is not a good state of affairs. I’ve been talking to many of my producer brothers and sisters and allow me to please now share what is a common sentiment, or rather several. But first, I need to paint you an accurate picture. Just like it was a bit of challenge to get some people to speak up against the proposed illegal merger of Paramount and Warners initially because people are so dependent on those companies for their income they worry about biting the hands that feed them. It is even more difficult to get such people to speak openly about the labor situation here in the United States. 99% of Producers want to work in the city, state, and country they live in and the truth is they are willing to make tremendous compromises to do so, but things are tough and getting tougher for them. So it is no wonder people share their opinion but we are not yet at a place where we can speak openly about it.
But I will. Or at least report it. There are some benefits of being old and not giving a fuck anymore.
Consider the following for anonymous producer #1… let’s call them… Zarryl Danuck!
There is fundamentally one thing driving production outside of the US: labor costs. There are a variety of other union related issues that don’t exist outside the US –– residuals, unreturned payroll bonds, draconian corporate and personal guarantees, etc. –– however, anyone that invokes these issues as the major driver pushing filming outside the US is losing the forest for the trees. Ultimately and simply, the issue is that it is too expensive to shoot in the US when you compare it against almost anywhere else. US state tax credits and foreign tax credits are comparable and (at the moment) the dollar is relatively weak so the buying power of a dollar here and abroad is comparable –– the main difference is the cost of labor. And there is really no comparison.
There are three main arenas driving the high cost of labor in the US: 1) minimum staffing, 2) wage rates, and 3) payroll fringes. To take those in order, minimum staffing is one of the most endemic and problematic cost drivers on set.
The red lines between US departments means that you by design have additional people and personnel that are not active for large chunks of the day, effectively on stand-by for when they may or may not be necessary. Take the separation of grips and electrics –– a standard independent film will have somewhere between 4+4 to 7+7 (grips and electrics) as their core crew. If you have a daylight exterior day where the majority of the work is putting up frames of silks and diffusion, which the grips handle, you still have those 7 electrics with you.
And vice versa, if you have a day with heavy interior or exterior lighting, where the electrics are doing the vast majority of the work, you still have all the grips. Why? Because they have finely prescribed roles and cannot cross pollinate. In most of the production locales outside the US, there is no separation –– it’s one department –– and because there is no separation, you inherently need less people because you have synergy instead of idle labor. You can see this across a multitude of departments. Take set dec and props –– two extremely distinct departments in the US. If a couch needs to be moved on set, on-set dressers must do it.
But outside the US, not the case. You can go down the crew list and find endless instances of this. (None more extreme by the way than the teamsters, which perhaps is a third rail no one wants to touch, but that department more than any other absolutely blows up US budgets, and is completely absent in budgets outside the US. You can have a film where you are not moving and your basecamp stays in one location for weeks on end in the US, and you will still have a driver on each vehicle all day long. You describe this to anyone outside the US and they almost cannot comprehend what you’re talking about.)
Then comes wage rates and payroll fringes. Both of these are to some degree just a function of labor in the US versus labor outside the US in any sector –– particularly unionized ones. The cost of living is higher here than say in Hungary, and so the wages are higher here. There is no national health care in the US, and thus the employer has onus of paying fringes that sometimes get as high as 50% cumulatively of the wages. In other countries, these percentages are half of that or even 0% in some places.
Take a key grip (just as an example) on two films of comparable budgets ($15M gross), one shot in NJ and one in Ireland. The weekly rate for the NJ key grip comes out to a little more than $3,000 with OT plus another $1,400 roughly of fringes. The weekly rate for the Irish key grip is €2,000 with OT plus another €400 of fringes –– at today’s exchange rate that comes to about $2,775 USD per week for the Irish key grip vs. $4,440 for the NJ key grip. That’s almost 60% more! And Ireland is by no means the least expensive production locale –– the comparison get more extreme in Hungary or Malaysia, etc.
So you have labor that is often 50%+ more expensive due to rates and fringes, and then you have crews that are often 25-30% bigger than they might be elsewhere –– and in combination those forces have the effect of making the US prohibitively expensive. In fact, for a producer who is tasked with 1) making a film for a financially responsible number, and 2) delivering for a filmmaker the most possible production value relative to the available budgetary resources, the US is usually an irresponsible choice.
Imagine if/when the dollar increases against the Euro –– it will making going outside the US (ironically) even more appealing. Increasingly the only reason we shoot in the US is either: the story absolutely necessitates it or there is an external force that requires it, like an actor who is the financing lynch pin and requires to shoot at home, etc.
What can be done about this? Well, wages or fringes are not going to be reduced, nor should they. The cost of living, as we all know, is high here, and people need health insurance and pensions. And yet, something does need to be done, because high wages and high fringes are meaningless if the work is so inconsistent and subsistence level that you are only working 50% of the time, and you don’t have enough days to get your health insurance for the year.
If nothing changes one can only see two outcomes:
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production in the US becomes a novelty reserved for only extremely high-budget studio films or extremely low-budget non-union films, OR,
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there is a sea-change wherein the unions are hollowed out and film production becomes deunionized and right-to-work states become the defacto locales for production.
Neither of these would be good for the film industry.
The only solution imaginablethat doesn’t involve rolling back entitlements or unionization writ-large is to:
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to drastically increase the tier levels, so that more films fall under ‘low budget’ categories, and
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reduce the minimum crewing requirements.
These two things in conjunction would have the effect of reducing the cost of filming in the US so it’s competitive with shooting abroad.
On one hand, this would have the effect of reducing wages –– and this will be the argument against it. Crew members would now be paid less for a film that previously they would have been paid more for. And, the unions will say that it will also have the effect of employing less of their membership.
However, one can argue that is already what is happening because of the environment in US physical production. There are less things being shot here, so you routinely see crew members that normally would work on majors films or tier 3 films, taking tier 1 or tier 2 films because they need to work –– in other words there is so little being shot here you have crew members effectively cutting their own rates in order to work. And there is already less employment because…there is so little being shot here.
If you bring down the cost of shooting in the US, and by extension increase drastically the total volume of production in the US, you:
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A) create a more sustainable ecosystem where those same crew members can reclaim choice. Where they don’t have to take a tier 1 film if they feel the rates are too low, but they have the opportunity to if they want to.
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B) similarly, if there is an influx of production back to the US, the reduced staffing on a given films will not matter, because holistically there will be more jobs and films in total.
Movie stars, directors, writers, A-list department heads, and producers will be fine no matter what–– when films go abroad they are the ones that get taken along. But IATSE, the Teamsters, SAG, and the DGA, will not.
If these unions want to continue to exist as robust bullworks protecting the BTL labor they represent, they have to take the problem seriously. If they don’t, then they are being derelict in duty and every new term deal they negotiate will be a pyrrhic victory. At the end of the day, great rates and great health care and great pensions are meaningless if there is no actual production left to sustain them.
We will be back shortly with:
