3 Strikes Against NY Production-Winter 2009

There have been 3 strikes that put NY Independent Film Production out of business this winter. Number one is the World Financial Crisis; number two is the end to the Guaranteed Completion Contracts offered by SAG and their continued inability to sign a new contract with the AMPTP; and number three is the empty funding pool for the NY State Tax Incentive.

In the fall, we saw many films loose their green light due to the fallout in the world economic crisis, when investors stepped to the sidelines of their financing commitments. Even though some were saying that financing a movie seemed like a safer gamble than anything in banking or the markets, those with money were not in the mood for risk. As well, so many people with money lost the money which they had to play with, the money they had for financing independent features.

Just as producers started to regroup and find alternative means of financing their indy productions, the Screen Actors Guild decided to end the existence of the Guaranteed Completion Contracts, which they had been extending to independent productions, since the last contract expired July 1, 2008. Those GC Contracts, which people called waivers, had allowed films, which were independent of companies already signatory with SAG, to produce movies without the threat of the potential SAG strike. With no GC Contracts available, bond companies like Film Finances would not bond movies against a strike, unless, in some cases, the actor contracts were written with the provision that the actors would return to that production immediately following the resolve of any strike that interrupted the production, and there was money set aside in the budget, for the cost of shutting down and restarting at the most expensive time during the production.

As if these two factors weren't enough, it became public, that all the NY State Tax Incentive Funds had been committed and essentially spent, reflecting on one hand, the giant success of the incentive program, but, on the other, grinding to a halt, almost all movie production in New York. Many of the independent productions were being funded in part by a bank loan, and in many cases that loan was based on the bank being guaranteed repayment through the tax credit money. Where there used to be no guarantee that an independent film would recoup any of the money invested in making it, with the Tax Incentive there was a guarantee. But suddenly, with the funding pool run dry, the banks were no longer willing to lend, and what had become a cornerstone of independent film financing, for New York, was no longer.

The winter is traditionally a frigid time for making movies in New York, but this winter has been the worst I have seen in the 22 years I've been in the business. Even TV pilots scheduled for the early Spring, many written for New York because of the draw of the Tax Incentive, were carted to Toronto, Vancouver, Providence, Boston, Michigan and other States that could still offer financial incentives, leaving New York production people high and dry. We all look forward to the Spring, where the promise of warming weather brings hope for a resolve to the potential SAG strike, a renewing of the Tax Incentive funding, and an end to the downward slide of our general economy.