Guest blog: Rhetoric will not disguise the fact that the mayor has no plan for reversing the flow of dollars from California to other states
When Eric Garcetti took office as mayor of Los Angeles in June, one of his first moves was to position himself as a champion of Hollywood — a “salesman-in-chief” for the lucrative industry and the hundreds of thousands of jobs it creates. Despite its glamorous reputation, the area is rapidly losing film and TV productions to states like Georgia, Illinois, Louisiana, Michigan, New York and Texas.
Those other states entice producers with tax incentives, friendly labor contracts and other benefits — causing a massive economic redistribution around the nation. Hollywood’s freefall is one reason California has dropped over the last decade from the fifth largest economy in the world to the 12th. Hollywood and California need Garcetti to step up more than ever, but his promises are as shallow as the average summer blockbuster film.
His big proposed move: He’s going to appoint a Hollywood “czar” to help the industry. The term was novel and the impact was powerful in eras when special presidential representatives cut through red tape and addressed critical issues (e.g., AIDS, drugs, disaster).
Now President Obama has dozens of czars. And they’re known more for controversy — working without transparency and outside Congressional oversight — than they are for demonstrable results. His czars have become a punchline, their faces adorn the jacks and jokers cards in novelty playing card decks sold online.
Garcetti says that he is “looking for Superman” to address a “crisis,” but it is nothing more than a hollow public relations stunt. Rhetoric will not disguise the fact that he has no plan for reversing the flow of dollars from California to other states. He’s been a powerful L.A. insider since 2001, just finished a grueling campaign for office, had two months to develop a transition plan and has been in office another two months.
But he doesn’t have a name yet for his new Hollywood czar? That’s bad news for Los Angeles and good news for the politicians in those aforementioned states.
As the Los Angeles City Council's president, Garcetti was an obstinate thorn in the side of the private sector. Under his leadership, the council’s fervent support for labor unions and controversial policies like living wage ordinances have created the very real, very serious perception that the city is anti-business.
On the other side of the country, Georgia generated $3.1 billion last year in economic activity from productions. Lots of states are competing to steal Hollywood dollars, but Georgia isn’t even among the top five. Based on Garcetti’s track record on labor, taxes and regulation, the army of background actors, drivers, caterers and other working-class Californians might soon start looking for real estate in the Peach State.
Runaway production is draining jobs and tax dollars from Hollywood, but another scourge on the entertainment industry is online piracy — and it’s costing the whole nation. Estimates vary widely, but the foreign market for pirated entertainment content takes as much as $58.5 billion and 373,000 jobs from America every year.
It’s unknown where combatting piracy falls in this Hollywood czar’s hazy job description, but there will be very little support at the state and federal levels on both issues.
In Sacramento, Gov. Jerry Brown’s is making controversial claims about California’s budget surplus, but he’s not putting any more support behind the tax-credit programs that are enriching other states. The distribution of the state’s annual $100 million film and TV tax credit program only funded 28 of 380 applications.
Since the program started in 2009, applications have more than doubled, but demand outstrips resources. New York’s program doles out four times more than California every year.
In Washington, the piracy issue has gone nowhere. Victoria Espinel, President Obama’s “copyright czar,” last month issued the “Joint Strategic Plan on Intellectual Property Enforcement,” calling for voluntary agreements between Hollywood’s entertainment and Silicon Valley’s technology industries.
Anyone familiar with California business knows that bridging those sectors is next to impossible without authority. Which is precisely what she lacks as a czar without an official appointment.
Similarly, Chris Dodd, former U.S. Senator and current chairman of the Motion Picture Association of America, did the nation no favors with last year’s SOPA/PIPA fiasco. In pursuit of the legislation to fight foreign piracy of American entertainment, he excluded the technology industry from the conversation — dooming the bills from the start.
The ensuing train wreck spurred widespread protests and helped foment a popular base (some might say cult) for the paranoid, anti-establishment movement led by WikiLeaks.
Between Espinel and Dodd, there’s little chance for meaningful action at the federal level anytime soon. But Dodd, perhaps still best known in Hollywood for profiting from the Countrywide Financial collapse that damaged the local economy, still pockets $2.4 million a year in salary. And Espinel’s boss just got a four-year job extension, so she has job security.
As for Eric Garcetti, he appears to be boxing himself into a corner just a few months into the job. It’s an unenviable position with the bright glare of Hollywood now shining on him, but also because of the politicians in other states preying on the entertainment industry.
He should go ahead and name a czar. It can’t hurt. But more importantly, he needs to develop a tangible plan of action. Empty public-relations campaigns are at the heart of Hollywood’s identity, but they are not going to win the battle for its economic future.