Georgia Film Industry More Than Studios
This week’s Courier Herald column:
Georgia’s emerging film and entertainment industry has spent the past decade going from a mostly conceptual phase to one where the roots are firmly planted in Georgia soil, and fruits are regularly harvested. As the industry begins to mature and expand, it’s also showing evidence of meeting the long term goal: Employing Georgians year round in an industry that will increasingly have full time companies staffing and servicing the temporary projects that move through Georgia production facilities.
Exhibit A for the film industry is South Georgia attorney Patrick Millsaps. Millsaps’ journey began as a somewhat accidental and quixotic trip through national campaign work and led him to be the Co-Founder and CEO of a Georgia based film production company, Londonderry Entertainment.
In December 2011, he traveled to Iowa to serve for two days as a volunteer on the presidential campaign of New Gingrich. Millsaps, not terribly shy and occasionally outspoken, found himself at odds with much of the paid staff. After suggesting the campaign produce and release a cost-effective YouTube video that earned Gingrich national media attention, Millsaps found himself being asked by the candidate to stay on for a few more days. A few days, led to weeks, and after Gingrich’s win in South Carolina, he was surprised to learn in a follow up staff meeting that Newt was appointing him to be the campaign’s Chief of Staff.
His stint in campaign world gave him many media contacts, as well as others he met along the way. After the election he reached out to actress Stacey Dash, who had endorsed Mitt Romney during the general election and received significant criticism for doing so. He ultimately ended up representing Dash as her manager for a couple of years, with him introducing her to his political and media friends, and Dash helping Millsaps network within the entertainment establishment.
That began a journey that led him through many of the inner workings of the business side of the industry. One of his earliest lessons is that much of the business of Hollywood – particularly its finances – are kept excessively complicated by design. As he began to break down various models to understand where the money came from and where it really went, he began to pick up more and more clients and business partners because of his southern plainspoken manner and use of numbers that were unconventionally straightforward.
His first foray into producing was when he served as Executive Producer to an independent film that had lost much of its financing four days before shooting was to begin. Patrick convinced an investor from Texas to overnight $200,000 to complete the $500,000 budget. That film, “I’ll See You In My Dreams” starring Blythe Danner, Sam Elliott, Martin Starr, Malin Akerman and Rhea Perlman, was invited to premiere at the 2014 Sundance Film Festival, was purchased by a distributor, was released nationally and brought in $16,000,000 at the box office.
In January of this year, Millsaps co-founded a nationwide talent management and production, Londonderry Entertainment. His partner Sheila Wenzel-Ganny was a longtime Hollywood agent who has represented such notables as Amanda Seyfried, Britt Robertson, Katee Sackoff and McCauley Culkin. She now runs the talent management division of Londonderry out of their Beverly Hills office. All of the company’s financial and business operations are headed by UGA graduate Don Grimsley in Gainesville, GA where he leads the team of accountants, bookkeepers, and analysts. Millsaps, originally from Marietta, now living in Albany, Georgia with his wife and three daughters says that his office “is on a Delta jet, reading scripts and reviewing budgets” splitting his time between Londonderry’s Atlanta, Beverly Hills, Nashville and New York locations.
Millsaps has bold plans not only for Londonderry, but for the entire entertainment industry in Georgia. His goal – shared with that of many state leaders – is to make Georgia a “self contained production state”. Much ink has been written about the new studios that have joined the Walking Dead’s Raleigh Studios over the past few years. Pinewood Studios is an established and growing entity remaking central Fayette County. Tyler Perry is planning an ambitious expansion of his Georgia operations in taking over much of the abandoned Ft. McPherson. Numerous other studio projects dot the Atlanta perimeter and across other parts of Georgia.
Other than Tyler Perry’s these studios, mostly, are on a business model that relies on short term facilities rental—cast and crew come to Georgia to film and then leave. Most of the industry is still led by decisions made in Los Angeles and New York. Millsaps wants to change that. He makes it a point to introduce his relationships in the industry to businesses in Georgia. For instance, Londonderry banks with Atlanta-based Atlantic Capital. He is now introducing studio executives to his hometown bank to move some of that business into the state. Millsaps also says that Governor Deal’s Georgia Film Academy is “brilliant” and “will continue to soldering Georgia to the entertainment industry.” Additionally, as Londonderry continues to educate Georgians, not only how to maximize Georgia’s tax credits for film & television, but the opportunities that such as investment present investors with their federal income tax as well, the more firmly rooted the industry will become.
It’s been an interesting if not totally planned journey for Millsaps, one that allows him to have one foot firmly planted in the glitzy world of Hollywood, and one that allows him to enjoy the neighborly qualities (and diet) of Southwest Georgia. His near term goals are to “make great films with great people.” As the father of three daughters, Londonderry’s stated purpose is to provide more filmmaking opportunities to women. The more successful he is at doing that, the closer the two worlds that he currently inhabits will be to becoming one.
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If the tax incentives are the same for production companies based in Georgia and those based out of Georgia than how does a production company benefit by basing in Georgia? Why make an investment in property, buildings and permanent local employees if you can import employees and rent or lease local facilities? Millsaps desire to make Georgia a “self contained production state” seems to somewhat conflict with current Ga. tax policy. I do agree with him in that the structure and finances of the film industry are very complex.
I’m not even sure where to begin as I don’t understand how you get your conclusion after what you stated.
How do you believe it is cheaper for a production that is based in Georgia to fly in everyone they need if the people and supporting infrastructure were already here locally?
The point is that as demand for these projects becomes (as it has) year round, that while the projects are themselves temporary there’s always work for people that live here available in the industry – just like there is in New York and Southern California. Eventually, the films are being done here not just because the film credit makes it almost cost prohibitive to do it anywhere else, but because the people that work in the industry actually live here and this is home not only to them, but the industry.
Case in point, just a couple of weeks ago I read an article that Newnan will be used as the town/backdrop for a new network TV series? How was Newnan chosen? It’s now where the location scout that got to choose it lives.
A Georgia based production company (Perry) is different from a non Georgia based company. Perry owns his facility. Payroll and finances are likely handled in Ga. He hires mostly local actors, technicians, costume/makeup, grips, camera folks. These people are paid in Ga., are subject to Ga. income and sales tax and they will spend their money in Georgia.
Contrast Perry’s operation with a major project filmed in Ga. by an out of state company. I recently had a small part in a production. My costume person was here temporarily from Texas, the stunt driver was here temporarily from California, one of the actors drove in from Tennessee for a day shoot and several of the on-set folks were Brits. Upon completing their work these folks will leave Ga. Their Ga. income may or may not be taxed and they won’t spend their income in Ga. The income from this film (after release) will be taxed elsewhere. Interestingly even the payroll on this project is done out of state.
Do local economies benefit from these arrangements? Yes, there are benefits in terms of some local hiring and some local spending however the production companies (in-state and out of state) get state tax credits which lower their costs considerably.
Millsaps has the right idea. He wants more Ga. based Perry type operations which are more beneficial to the state than projects done by out of state companies.
As for your Newnan project, it may or may not benefit our Georgia economy. It depends how it is structured.
Besides the large scale productions houses, don’t overlook the pre and post production that is done in the state. Major editing and special effects production houses are all ready in the state. A film and crew might be temporary, but that’s not unusual in the industry. The set decorators, prop people, roadies, rentals and logistic crews are primary local hires. The sound work, editing and animation houses in the state are getting national and international exposure (example Archer is created in the Atlanta Metro). Some times a film is shot somewhere outside of the state and post production is done in Georgia. Some music studios are doing sound tracks. The industry is such that the old studio system of every thing on one lot is changing. Film is digital in most cases and once a scene is shot (regardless of where or who does the shooting), you can do post production anywhere.
My shoot involved mostly an out-of-state crew. For the most part the local hires were relatively low paid nonunion although I did talk to one well paid local. Catering and some transportation was handled by locals. Because these costs are considered “production costs” the production company gets tax credits and/or sales tax exemptions where applicable. Editing and sound are to be done out-of-state and it will take about a year. But I do agree with you that it is a growing business here in Georgia.
Charlie, locations are chosen first on meeting the story location and visual appeal. Newnan has hosted 4 seasons of the Sundance channel series, ‘Rectify’. Season 4 is currently in production. The series is created, produced and sometimes written/directed by Adel, GA native, Ray McKinnon. The Oscar(tm) winning Actor/Director/Writer made his early career with stage and film roles in GA. His Oscar(tm) winning film ‘The Accountant’ was produced in GA as are several other projects. He continues to bring work back to Georgia whenever possible. The success of ‘Rectify’ has allowed Newnan to catch the attention of other filmmakers and perhaps host another series there.
First, full disclosure. I work in the film/tv industry. I am a 35+ year resident of Georgia. The film/TV industry benefits a huge number of Georgia residents and businesses.
http://www.georgia.org/industries/entertainment/georgia-film-tv-production/production-incentives/
Note the important point #7, “expenditures must be made in Georgia”. This is the most important selling point and economic benefit for many Georgia citizens. Film business spends huge amounts locally on retail, food, rentals, services and labor. Many normal businesses benefit from film production spending in the state. Here are some examples: warehouse and office rent, hotel and apartment rentals (many out of town crew have to pay for their own long term housing from an allowance), location rentals, vehicle rentals, camera and equipment rentals. Even the out of town workers have to buy some food, gas, clothing, and other normal living expenses from local businesses.
Purchases: office supplies, furniture, set dressing, props, household goods, clothing, costumes, make-up, fabric, lumber, metal, building supplies, hardware, paint, landscape plants, specialty manufacturing, printing, equipment rentals, expendable supplies used on set, and food… lots of food.
Productions feed lots of people. They order lunch for production office personnel and rotate through many nearby restaurants for variety. This can mean 20-100 meals per day for a local business averaging $7-$13 per meal. The on-set caterers buy lots of food to feed cast and crew breakfast and lunch on location. Our “craft service” departments keeps food, snacks and beverages on set during shooting days to feed actors and the crew “craftspeople”. If production goes overtime, a second meal is needed to feed the entire crew. This is usually ordered thru a local restaurant or caterer near the location.
Other services: security, cleaning, electrical, plumbing, HVAC vendors to service production offices and studio spaces.
As you can see, there are enormous numbers of local businesses and freelance laborers receiving sales and income from this short list of examples.
More importantly the local benefits means our local citizens have money to spend locally on our own household needs, business growth, mortgages and family. We all pay sales taxes and income taxes as we spend our profits from our film business income. I know film workers from other states, including California, that have made permanent moves to Georgia because the work opportunities here. Production companies really prefer to hire the majority of crew from local talent.
The film business has allowed me to make household repairs, buy new furniture, use local vendors to purchase household goods, pay off debt, keep my car maintained and create some savings.
I hope you can see the difference between state given manufacturing incentives, that give millions to a specific industry entity, and the enormous economic benefit that is spread to ordinary people and business through film/tv production spending in our state. Only a small portion of taxes is given back to the production companies. The rest goes directly to benefit individuals and local Georgia businesses. We are more likely to spend more in-state on ourselves. We pay taxes.
Here is another explanation of tax benefits unique to the film industry. While production companies don’t get a tax break on catered meals they do get a credit on a portion of lodging and some transportation.
http://www.credcga.org/wp-content/uploads/2013/10/Film_Tax_Incentive_Brochure_6-2-11_2.sflb_.pdf
Thanks for the extra link. I have not seen that document. Good point. Local companies doing business with film companies do not get the tax credit, only the qualified production companies. Plus, if there is no sales tax on items purchased, such as food, there is no tax benefit. These items are still essential and necessary to any production. They will be purchased locally and benefit the stores or food vendors.