TL/DR: What is the impact of the writer’s strike on Georgia?
TL/DR: What is the impact of the writer’s strike on Georgia?
A primer in an ongoing situation
Welcome to my newsletter by me, King Williams. A documentary filmmaker, journalist, podcast host, and author based in Atlanta, Georgia. This is a newsletter covering the hidden connections of Atlanta to everything else.
1. Hollywood writers are on strike for the first time since 2007-08
The Writers Guild of America (WGA) is in the midst of the first strike in over 15 years. The strike sees the writers of major, mainstream film and television series protesting over a variety of issues as they believe are not being compensated for.
Why are the writers on strike?
TL/DR: Money, workloads, and flexibility
But here are what the writers want in short:
Higher compensation for all writers across the board
Residuals for streaming shows, especially those on ad-supported streaming
Staffing requirements for all television shows to avoid being overworked
Ending or regulating ‘mini-rooms’ where writers work on a show
A curtailing on how Artificial Intelligence can and will be used if it’s used at all
There has been some immediate impact. Some shows are being paused, while late-night talk shows have already shut down.
What’s the big deal?
The writer’s strike is a more public version of labor issues in America as contract work, laws restricting the ability to move freely in the market, and the threat of technology ending jobs are being used by larger corporations as a way to cut costs. The WGA is claiming that its proposals will only cost all of the studios and Netflix a total of about $600 million. Or 2% of their operating profits.
While the companies themselves, all publicly traded stocks are being hammered for lack of growth. Combined with the loss of profits resulting from creating streaming services, funding programming, and a loss of cable subscribers across the board, entertainment companies are using the strike as a way to potentially cut more costs.
For more:
Vulture: Every Term You Should Know to Understand the Writers’ Strike - 5/9/23
Variety: WGA’s Compensation Battle Heightened by Rampant Inflation, Low Scale Hikes in Recent Years - 3/28/23
AP: As streamers cut costs, TV shows —and residuals—vanish - 4/7/2023
Bloomberg Law: Union Workers Haven’t Seen Raises Like This in Decades - 3/21/23
2. How did Georgia become a hub for film and television production?
Georgia’s history as a production hub has had starts and stops. The first credited ‘major’ motion picture was the 1941 ‘talkie’ film Swamp Water by auteur French filmmaker Jean Renoir. Filmed on location in the Okefenokee Swamp, the black-and-white noir film stars Walter Brennan and Anne Baxter.
Unfortunately, the exact number of television shows and movies filmed prior to 1941 and between 1942-1971 are mostly lost. Records of productions in the state didn’t begin until Jimmy Carter became governor of Georgia. The accepted estimate is just under 2,300 productions have been filmed in Georgia between 1972 and 2022. That list includes over 750 feature films and over 750 television programs. In addition to a whopping 320+ reality shows based in the state. You can see the full list here.
Gone With The Wind
Despite the impact of the film and its story set in Georgia, 1939’s Gone With The Wind, was filmed primarily in Los Angeles and certain scenes in Arkansas. The world premiere of the film was held in December of 1939 in Atlanta at the now-destroyed Loews Theater in Downtown Atlanta. Its film stock was stored at 152 Nassau Street, a place recently destroyed for the driveway of the Margaritaville timeshare building across from Centennial Park downtown. Gone With the Wind and its success for generations etched Atlanta with the iconography of the romanticized Confederate South. And defined how nearly all Southern films would be seen for decades after.
The 1970s, Jimmy Carter, and Georgia 1.0 as a production hub
The Academy Award-winning film Deliverance became the first film since Gone With the Wind to define Atlanta once again as a production hub. The 1970s saw a boost in major motion pictures, as about 30 feature films were produced between 1972-1979.
But it was then-Governor (and future US President) Jimmy Carter who made the push for Georgia as a production hub. The Carter administration was making a push to Hollywood for more filming in Georgia, resulting in an uptick in films in the 1970s. Resulting in the creation of the Georgia Film Commission in 1973.
The most defining actor of the time Burt Reynolds and his Smokey and the Bandit films were filmed in Georgia, providing a new light into Georgia as a place for production. Smokey and the Bandit II famously saw the demolition of Atlanta’s city roller coaster at the Lakewood Fairgrounds. The Lakewood Fairgrounds are now partially the property of Sony Screen Gems, which operates soundstages in the area.
The 1980s
The 1980s saw a surge in lower-budget films and a steadier influx of lower-cost television programming. More made-for-tv films also became more common during this period but still not as much as today. Atlanta and Georgia as a whole by the late 1980s once again saw more prominent films such as Driving Miss Daisy, Dutch, Steel Magnolias, and School Daze. While Covington became a hub for television in the state led by the made-for-television adaptation of In The Heat of the Night which ran for 7 seasons and include some made-for-tv movies as well.
The 1990s
The 1990s were defined by Savannah being used as a location for film productions. Savannah in the 1990s was the de facto national representative of Georgia as a production hub as several prominent movies were filmed in the area. This includes The Bridges of Madison County, Forces of Nature, The Generals Daughter, and Forrest Gump. While Georgia and metro Atlanta also saw the films Robocop 3, My Cousin Vinny, Fried Green Tomatoes, and Scream 2.
The 2000s and the tax credit era
The most prominent film of the early 2000s pre-tax credit era of Georgia’s film community was the Denzel Washington sports drama Remember the Titans. That movie was filmed in Atlanta, Decatur, Rome, and Covington. Other films of the time included Drumline, Sweet Home Alabama, and The Longest Yard remake, featuring Burt Reynolds. The era also saw the development of two parallel lines of production, the Tyler Perry multiverse and the rise of reality tv and unscripted programming.
The 2010s and Atlanta emerging as the mecca of film and tv production
As other states pulled back their credits, Georgia became the biggest recipient of work. North Carolina and Louisiana saw the rollback of their programs, making Georgia the only major player in the region of the southeast.
While in hubs of California and New York, the curbing of tax incentives + the overall costs and regulations of being in those states saw a slow but steady influx of projects going to Georgia.
3. Georgia is the mecca of production
Back in 2021, Georgia was ranked as 3rd in overall tv and film productions in the US. Only behind California and New York, both of whom suffered declines. How it got there was a combination of a national cultural shift to Atlanta led by the rise in hip hop/R&B, Georgia’s competitors leaving the market, and of course, tax credits.
39 movies that have been filmed in Georgia have grossed more than 100 million domestically. This includes both Avengers films Infinity War and Endgame, Black Panther, the Hunger Games 2-4, and the Jumanji remakes, to name a few.
4. Georgia’s Tax Credits Explained
The American Jobs Creation Act of 2004 was passed by the US Congress. It was a sweeping bill that included several new tax breaks for corporations as well as an addendum providing immediate tax write-offs for domestic film production.
The following year, the state of Georgia passed The Georgia Entertainment Industry Investment Act, which provided a 10% rebate for productions in the state. Three years later, it was expanded to 20% with an additional 10% offered to any production with the “Made in Georgia” logo posted during its end credits.
That additional 20% in tax breaks combined with lower costs of materials, lower taxes, low regulatory environment, right-to-work laws, and Hartsfield-Jackson airport, aided in metro Atlanta growing over would-be rivals Louisiana and North Carolina.
How do the tax breaks work?
In order to meet these qualifications productions must meet the guidelines of the Georgia Department of Economic Development (GDEcD), while the Georgia Department of Revenue (GDOR) facilitates the claims of tax credits.
From the state of Georgia:
Eligible projects include: feature films; television films, pilots or series; televised specials; televised commercials; and music videos that are distributed outside of Georgia. The $500,000 annual minimum expenditure threshold can be met with one project or the total of multiple projects aggregated in a single tax year.
Only production companies are eligible to apply. Production companies do not have to be incorporated or headquartered in Georgia or hold a Georgia bank account to qualify for the tax credit.
For a project to be eligible for the 20% transferable tax credit, the Georgia Department of Economic Development (GDEcD) must certify the project. Certification for live action projects will be through the Georgia Film Office. Certification may be applied for within 90 days of the start of principal photography but before the end of principal photography. The best time to submit the application is when the project is green-lit, fully funded and ready to open a production office.
Transferable tax breaks
Once a tax break is given the green light, the production company (usually the studio) takes the funds and then can decide where to reallocate them. A transferrable tax credit can be sold to a Georgia taxpaying individual or company. That person or company can then use the credit to lower their overall tax bill. The process brings in cash money for the production company which then can use it for other endeavors. The credit must be sold for a minimum of 60% of its value, ex: a $10 million dollar credit is at a minimum of $6 million dollars and can only be sold once.
Georgia is a hub of television, not film.
While the notion of film and television are often used synonymously, they are different productions. The Peach State saw a whopping 269 television productions, more than any individual state in the US. Overall productions in Georgia totaled 412 for FY23. While its seen 21 feature films produced in 2020-21 and 32 in 2021-22.
Georgia is a tax break hub, not a production state
Georgia has used its tax break system to attract production to the state. Georgia’s $4.4 billion in total production spend in FY22 (6/30/2020-7/1/2021) would equate to about $1.3 billion in tax credits being dolled out, representing about 7% of the state budget.
5. What does this mean for Georgia?
At least 14 television series will finish their season orders in Atlanta. This includes BMC Season 3, Marvel’s Agatha: Coven of Chaos, and Netflix’s final season of Cobra Kai. While on the film side Sony’s Bad Boys 4 and Marvel’s Captain America: New World Order are still filming in Atlanta. While Marvel’s Blade was supposed to start filming in Atlanta next month, it has been postponed due to the strike.
Short term:
There aren’t many WGA members in Georgia, especially compared to NYC and California. When it comes to those in the WGA in Georgia, only 161 out of 11,000+ paying WGA members live in the peach state. For Georgia writers, being in a right-to-work state also means that they are likely many of the same opportunities for non-unionized work. On the vendor side, some businesses are already feeling the impact.
For those members unionized or not, who work on union (mainstream) productions, if more productions begin to stop, get canceled, or not go into production, Georgia’s staffing woes (a well-known industry problem) could start again. For those aspiring crew members, writers, and actresses working in non-unionized positions, work could be much harder to come by.
Long term:
The strike does not affect any of the reality shows, true crime series, documentaries, and lifestyle programming currently taking place. Those shows with lower budgets and production needs won’t make up for the loss in revenue and overall spending as television programs, which represent about 65% of all production in the state.
Georgia has too many productions to stop completely this year. But a general slowdown of 20-30% could be enough to throw the industry into a local recession. As more soundstages, suppliers, and third-party businesses continue to see a slowdown in business, there could be some immediate job losses and even bigger debts rise.
Soundstages are the biggest losers if a slowdown happens
Soundstages in Atlanta are at the biggest risk, these stages are often isolated, and not built for immediate reuse or secondary businesses, and could see a greater loss of revenue. Atlanta’s growth in soundstages is also an anchor of several mega real estate projects. Projects in Fayetteville’s Trilith, Dunwoody’s Third Rail Studios, and Tyler Perry’s Fort are all focal points for hundreds of millions of dollars in spending for mixed-use entertainment districts.
For smaller studios, soundstages, office buildings, and warehouses, the decline in production could put these projects in the red sooner than later. The demand for Hollywood outstrips the general need for other potential clients. Some of these smaller venues, stages, and facilities are feeling the pinch already.
6. What does this mean for the industry as a whole?
The last writer’s strike saw a reshuffling of the tv landscape. It also saw studios lean even more heavily into cheaper forms of reality television, game shows, live studio programs, judge shows, and documentaries. All lower-costing programming options. All options that are not covered by unions or require residuals.
This period also saw the expansion beyond the big four media hubs, NY, LA, Vancouver, and Toronto for North American production. The tax credit states of North Carolina, Michigan, New Mexico, and Louisiana saw an explosion in production coming out of the last writer’s strike. While Georgia, the eventual tax credit winner didn’t fully see an uptick in production until 2008-10.
Short term:
In the short term, not much. Yes, a few productions have paused. But if the productions were to restart within the next 30 days, it would be a blip on the radar.
For above-the-line workers, producers, directors, actors, and writers, the impact of a strike could be immediate depending on whether or not they had projects in production or development. Hollywood studios are also cutting producer pay as well.
For below-the-line workers, BKA the ‘crew’ which comprises everyone else on set, any missed work is hurtful. It’s one of the reasons why many productions haven’t stopped. While some have stopped in solidarity with the WGA, it’s also a lot more jobs lost if a full television or film stopped working for any reason.
Long term:
If the strike goes longer than 30 days, there could be a real downturn in the overall entertainment sector. This could see some projects being canceled altogether. For television series on any medium and made-for-streaming films, this is the biggest worry. The cost-benefit analysis of so many studios and streaming services is factoring into a larger pressure by Wall Street to cut costs.
A glut of delayed productions meant for streaming services, most of which with limited appeal and no discernible way to generate ROI could be shelved entirely. Warner Bros Discover (WBD) already started this trend 18 months ago by stopping dozens of in-production made-for-streaming films, several original series, and children’s programming. On top of removing limited viewed titles and other titles that were up for residuals for actors to receive. Combined with the increasing costs of all forms of professional media, a great contraction in the number of shows and movies is more of a reality. A reality accelerated by the pandemic and now the writer’s strike.
While the issue of striking isn’t over as the actors guild SAG-AFTRA and the Directors Guild DGA have deals that expire next summer. This could be an even bigger problem if that were to happen, should that be the case even states like Georgia would be in the crosshairs of a national strike.
7. There are other things Georgia has to worry about
Despite the growth of the film industry in Georgia, there are things to be concerned about. The writer’s strike is important but the industry here still needs support.
Other states are getting into or getting back into the tax breaks game
Additionally, there are now more entrants into the tax break space again. These newer entrants are either a) closer to California, b) cheaper than Georgia, and c) offering more and/or better incentives. Some of these states offer closer to traditional entertainment hubs of NYC and California than Georgia.
Metro Atlanta isn’t a cohesive film market
Add Georgia’s defiance to address and support mass transit issues has made it difficult to retain and attract below-the-line talents. Talents that often cost productions more money because of the need to continually hire crew members from the big four markets or other states to do the work.
Atlanta despite its growth is just a bigger version of 1993 Atlanta, with sprawl, car dependency, and terrible social life amenities for people who don’t live here typically. The distance between studios and filming locations in metro Atlanta can be hours, apart, with or without traffic. Due to the lack of regional hubs of production like Brooklyn’s Navy Yard, Williamsburgh, Midtown Manhattan, or Times Square in NYC or Hollywood, Burbank, and Santa Monica in California. It’s hard to retain industry in Georgia because there isn’t a dedicated section of town where productions happen.
The quality of life in NYC, LA, Toronto, and Vancouver vs Atlanta is huge
Hollywood is here for financial means, not personal ones. When it comes to lifestyle and opportunities, Georgia, and yes, even Atlanta is not that appealing to people who live/work/play in the big four North American markets. Atlanta is still a suburban city with hard-to-understand directions, amenities, or easy-to-access nightlife compared to NYC, Toronto, and LA.
Most of the talent, producers, writers, directors, agents, and executives don’t live in Georgia. They don’t spend money in Georgia and after 15 years of a program, most don’t see the benefit of living in a suburb versus a world-class city. World. Class.
8. Are these jobs working for Georgians?
Film and television jobs are hard to come by. It’s even harder to gain access to the union. The estimates of film and television workers in the state vary between 25,000-40,000. Of that number the relative number of Georgia residents who’ve moved up into unionized work is murky.
Film and television aren’t similar to other fields. Anyone who works on a set is a temporary worker, at the end of every production, everyone is unemployed.
The union steps in to fill the gaps by helping to get workers continual jobs and setting quotas on how much of a job has to be with unionized labor. Of this labor pool, it’s the unionized labor who has a better time at both a more stabilized career and job opportunities. In a right-to-work state like Georgia, this ends up with a higher percentage of residents who work in non-union jobs cycling in and out of the business.
Georgia’s (and Alabama’s) union is local 479 or the International Alliance of Theatrical Stage Employees, (IATSE) member 479. While the SAG-AFTRA local covers Georgia and South Carolina, it claims 3,000 paying members.
Is the policy leading to better jobs?
The state of Georgia does have requirements on how much of a crew needs to be comprised of local residents in order to meet the threshold for tax credits. That percentage is usually around 30% of the crew. Studios can make the most of this rule by hiring locals who aren’t union members for the same work, sometimes at a lower cost and those persons never gain eventual membership into the union itself. Or those persons working in lower-level positions such as production assistants (PAs) in various departments.
Part of this is the data itself is behind a shield of protection from the unions and the studios, the other is how a resident is counted.
In Georgia, if a union member from another part of the country were to relocate their membership to a local in the state, that person is now counted in the total. It’s equally difficult to determine if actual long-term residents or non-film/tv affiliated residents are leveling up into higher positions and also gaining union membership. It’s here where the claims of generating local, higher-earning talent are in need of inquiry.
9. The politics of tax breaks and the film industry
On a broader view, should a national recession actually happen, the issue of tax breaks as an economic growth policy could be on the table. For the state of Georgia, that could result in some rumblings during the 2024 legislative session. There is a small contingency of people who are against tax credits.
For Governor Kemp, his modus operandi has been using tax breaks for economic growth. And if there were a tax break to go or be curtailed, expect it there. There is a scenario that if the tax breaks get capped, scrapped, or reduced, productions could leave. If there is a great contraction of film/tv jobs, that would leave a large gap in infrastructure, real estate, construction, and waste management services created on behalf of films. With an ancillary effect on third-party vendors’ potential to leave as well, there could be a resetting of the labor market.
This scenario would be placing more Georgians potentially back into the labor pool, likely to the glut of lower wage and/or contract jobs needed in the state. It’s a gamble but that could work if things got dire. Additionally, the spending of multibillion-dollar companies in the state could further decline tax revenues for municipalities around the state.
Hopefully, the strike is over sooner than later. For Georgia that would be a welcomed end.
-KJW