By Hillel Aron
By Joseph Tsidulko
By Patrick Range McDonald
By David Futch
By Hillel Aron
By Dennis Romero
By Jill Stewart
By Dennis Romero
With the exception of a sparse few truly independent and/or financially strapped production companies, most of the movies and TV fare we get is backed by deep-pocketed investors. Incentives or subsidies of any kind from any source — be they from California, any other state in the U.S., or any nation on the planet — are simply and unquestionably a reprehensible practice that lines the pockets of these already rich investors. They are amongst the last people on this planet worthy of government payoffs and union wage concessions for granting us the "privilege" of working on their productions, at the expense of our mostly less-privileged taxpayers.
Yes, I know that businesses work on a model of maximizing profits and cutting costs in any way they can, and that politicians are frequently willing to cut taxpayers’ financial throats in order to bribe employers onto their turf. But when it comes down to the fundamental ethical and moral positions regarding these issues, I don’t see how anyone can disagree that incentives are wrong.
Ironically, in addition to the creation of jobs in Canada and elsewhere, the pursuit of short-term cost savings by U.S. productions helps fund the development of a production infrastructure in these nations that will ultimately provide foreign producers the resources to compete with U.S. companies in the creation of movies, TV programs and commercials. Our producers are going to stab themselves in their backs in the long term. But U.S. companies have ignored the long term many times in the past, resulting in much financial disaster.
The myriad examples of corporate malfeasance we’ve learned about recently have opened many eyes to fiscal inequities; the general public should get a real treat when they learn about Hollywood’s accounting practices, which make those of Enron look simplistic in comparison. What could lead to such revelations? A basic investigation of the subsidies, via a 301(a) filing with the U.S. Trade Representative, which is being pursued by FTAC, a coalition of affected film/TV industry personnel (and the vendors whose services we use). This shouldn’t be challenged by anyone who’s honest and open, since no tariffs, duties or other penalties are involved. However, the studios are dreading such an investigation, as it would require them to open their financial books to government officials.
FTAC has evidence to show that the subsidies are a violation of our trade policies. If they prove to be illegal, the Canadians should withdraw the subsidies. If they refuse, the matter will be taken up with the WTO. Ultimately, if the subsidies are still not dropped, a duty could be imposed. This "countervailing duty" would be tailored to specifically target and equal the amount of the subsidies offered by the Canadian government entities (both federal and provincial), thereby nullifying them. This is not the same thing as a typical tariff, which takes a scattershot approach to trade problems.
A misinformation campaign regarding the potential duties, waged by Jack Valenti (president of the Motion Picture Association of America), Jack Shea (president of the Directors Guild of America), Bruce Doering (IATSE Local 600), Scott Roth (IATSE Local 876), Tom Short (president of IATSE, the primary crew union for both the U.S. and Canada) and their cronies, is inspired by their relationships with the financial powers behind the MPAA and IATSE’s own territorial and monetary greed. IATSE organizes inexperienced crews and raids other unions, taking over their membership, particularly in Canada. I don’t believe, let alone endorse, anything Short thinks or says about this issue, because he is a labor tyrant living in an ivory tower. (He’d probably take ivory traders into IATSE to build his tower if he could get them to pay the initiation fee and dues.)
I support unions, by the way. I’m a member of IATSE, but — like any old-enough, large-enough organization — the union is subject to corruption. As for the rank-and-file membership, despite what most of their leaders say, the members sign on to FTAC’s petition in overwhelming numbers (over 90 percent).
Regarding another union/guild: Even though the Screen Actors Guild has officially endorsed the countervailing duty petition drive, their president, Melissa Gilbert, suggested on KPCC 89.3 FM’s Air Talk that tariffs would instigate a "trade war" with Canada. Excuse me, Ms. Gilbert, but the subsidies Canada offers were what started this "war" — a subsidy war. If California offers 15 percent, what’s to stop Florida from offering 20 percent, and so on? Subsidies like these encourage a downward spiral of unnecessary corporate welfare. We’re simply trying to negate the subsidies, making for an even playing field.
As for Valenti, he is the studios’ long-standing, highly paid mouthpiece. That alone says enough about him. I read a comprehensive report (the Center for Entertainment Industry Data and Research’s in-depth study "The Migration of Feature Film Production From the U.S. to Canada" at www.ceidr.org). The supreme zinger here is the boomerang Jack Valenti threw back in 1976, which is coming back to hit him now: One of the arguments his pro-subsidy brigade uses against duties is that film/TV production is a "services industry" — not a "manufacturing industry" — and therefore exempt from said duties. However, on Page 5 of the report, we learn that Mr. Valenti, along with Lew Wasserman of MCA, persuaded "the courts, the IRS and Congress . . . that film should be considered as a tangible property" (not a service). Gotcha, Jack!