MPAA Strikes back at USC Film Tax Credit “Report”

 

Releases Statement Discrediting the Findings and Methodology of Film Tax Credit Study

 

The Motion Picture Association of America’s lashed out yesterday at a University of Southern California (USC) report that insinuated that state film tax incentive programs were ineffective at helping to generate revenue.

The press release and the report, titled “Lights, Camera, but no Action” was released on August 18th and made news in several national and regional media outlets, particularly in locations where Film Tax Incentive programs are being contested.price-school

In a summary of the initial report, which was published in an academic journal in July of 2016,  USC claimed that “Many states such as New Mexico see returns of less than 15 cents on the dollar and attract no long-term employment opportunities, yet state lawmakers continue to invest millions in the filmmaking incentives.”

Vans Stevenson, the MPAA’s senior vice president for state government affairs, disputed the claim by saying, “This is academic malpractice, designed to make a provocative statement rather than offer sound policy analysis.”

“Noise and Bias”

MPAA has come out and openly challenged the methodology of the USC analysis, saying the study uses overly broad, aggregated data that paints an imprecise and inaccurate picture of employment trends in film and TV production. For example, by counting movie theater and sound recording industry jobs and wages, published by the Bureau of Economic Analysis.

According to the LA Times, “The data included a variety of occupations, including some that have no direct relationship to film and TV production, such as movie projectionists and recording engineers.”

“A ticket taker at the local cinema or an engineer at a recording studio should not be affected by film production incentives,” wrote Julia Jenks, MPAA’s vice president of worldwide research in a blog post. “Their inclusion in the study adds noise that dilutes and biases the results of the model.”

All Film Tax Incentive Programs Are Not Alike

The MPAA also claims that the study’s methodology was flawed, as it treats all film production incentive programs the same. The study ignores the vast difference in programs and the benefit that larger incentive programs have, like those currently in place in New York and California (You can learn more about each individual state’s program by clicking the link).

“It’s a narrow focus and a very unusual result,” said Julia Jenks, who wrote the MPAA’s rebuttal. “The design is very flawed.”

KPM’s Take:

While the MPAA certainly has skin in the game and a vested interest in debunking this study, it makes valid points regarding the impact of larger incentives versus smaller film tax incentive programs. We have seen first-hand the dramatic economic impact that significant Film Tax Credit and Incentive programs have had working with producers on projects in states such as Georgia, New York and now, California.