Chris Dodd, Piracy & Tax Credits: The State of Hollywood Influence

Here are a few recent events and issues that offer insight into Hollywood’s influence at the legislative level

Here are a few major events/issues have occurred recently which offer insights into Hollywood’s influence at the legislative level both locally and nationally.

Chris Dodd takes over the MPAA: The Motion Picture Association of America struggled for almost a year to find a replacement to outgoing chairman Dan Glickman and suffered in the absence of a serious political head manning the movie industry influence ship in Washington.

An industry like the movie business can’t go without a top lobbyist for as long as the MPAA did as they require a constant voice before legislative committees and lawmakers.

Dodd is an excellent choice to take over for Glickman and was worth the wait for the MPAA. Dodd is respected by legislators on both sides of the aisle which is important because traditionally the movie industry is only respected by the left.

Dodd is also a figure in his own right. Obviously Glickman was known by Washington but he isn’t the universal political celebrity that is Chris Dodd. Dodd will be able to fill the shoes of the late Jack Valenti — someone who was a known commodity in political circles and gave the MPAA real prestige and access in Washington circles.

Finally, Dodd knows his stuff. He was a doer in the Senate and that will come in handy to the MPAA as they tackle a variety of important legislative proposals in the coming years, including big issues such as…

Piracy: One report indicated that $58 billion annually is being stolen from the movie industry by the pirating industry. While many point to China as one target for crackdowns, it is unrealistic that many foreign counterparts will be willing to act without a serious and united front by Congress on the issue of piracy.  

The White House Intellectual Property Czar has just issued recommendations and a report which among other things call for stiffer sentences on piracy abusers.

“Because of the high profit margin and shorter prison sentence for intellectual property crimes compared to other offenses, piracy and counterfeiting are a strong lure to organized criminal enterprises, which can use infringement as a revenue source to fund their other unlawful activities” said the White House’s Victoria Espenel when discussing the new memos.

But who in Congress is really going to shepherd this through? Obviously the movie industry is an important export but will the industry be able to make intellectual property abuse a major agenda item for either the House or Senate or at the least part of larger budgetary talks?

Tax Credits: It would seem that tax credits could serve as a huge rallying cry for the industry at the federal level but certainly at states vying for productions to occur in their state. New Jersey and Pennsylvania offer the most intriguing contrast on the challenges and potential for this issue.

New Jersey had a $10 million a year tax credit program which the legislature wanted to expand to $50 million.   

Pennsylvania has a $60 million a year tax credit program which many wish to maintain. NJ Republican Governor Chris Christie squashed the expansion of the tax credit and put the current credits in NJ on hold while Pennsylvania Republican Governor Corbett decided to maintain the $60 million in incentives.  

States are looking to save dollars and the incentives which many filmmakers have taken advantage of may or may not be coming to a close.

In NJ, Governor Christie did a study which didn’t quantify hard dollars which the tax credit produced for the state while in PA Governor Corbett was convinced that the credits created jobs and were a good investment. 

It would be wise of the movie industry to make good on any threats to end business in states which deprive them of these valuable tax credits. Amazon is reaping good press and making waves for their decision to leave Illinois after the legislature ignored their pleas to not force them to charge an online sales tax. Does the movie industry have the same will?