Runaway production
A large reason for these productions leaving are foreign subsidies offered to American companies ultimately reducing the cost of making the film.
The relatively poor quality of early recording media and lighting systems meant that films had to be shot in sunlit glass studios.
In addition, southern California offered a variety of landscapes, including ocean, desert, mountain, forest, and hillside.
[1] "Creative runaways" are film and television projects that are produced, in part or in whole, outside the United States based on requirements of the script, setting, or due to preferences of the actors or director.
Cheap labor, increasingly skilled crews, and varied landscapes also contributed to bring to Spanish locations super-productions such as Alexander the Great (1956), The Pride and the Passion (1957), Solomon and Sheba (1959).
[5] A subsidy is defined as financial contributions or kickbacks where "government revenue that is otherwise due is foregone or not collected", according to GATT – General Agreement on Tariffs and Trade.
"[11] The U.S. film industry has voiced concerns about this outsourcing trend which began in the mid to late 1990s, and which coincided with increased Canadian government subsidy programs.
[5][12] A DGA-funded study confirmed that the Canadian government has engaged in a comprehensive and aggressive, long-term strategic campaign to lure U.S. productions to Canada.
The CTF released a report saying that from 1982 to 1997, the Canadian federal government handed out $11 billion in 32,969 grants and loans to the provinces earmarked as business subsidies or directly to corporations.
Adding to the confusion, The Commerce Report—which used the same BLS data cited by the MPAA—claimed 236,152 workers were employed nationwide in motion picture production and allied services in 1997.
The report compared motion picture employment numbers gathered from the MPAA and the United States Census for the same year, 2002.
"The film industry is playing the Saskatchewan government like a worn-out movie script, drawing them into bidding war with other provinces.
One Canadian company stated that, "Our understanding was that after the initial five-year period, the fund would be self-sustaining and self-financing from a return on investment in successful productions.
"[19] "The Vancouver Sun's Michael McCullough points out that California not only has the world's highest production costs it also has no tax credits.
"[20] The movement of industry jobs to other jurisdictions has led to the formation of non-profit U.S. industry groups, such as the Film and Television Action Committee (FTAC) as well as other groups such as the Directors Guild of America (DGA), SAG-AFTRA (which absorbed the Screen Actors Guild) and others, who have been lobbying state and federal governments to introduce American legislation and counter-incentive programs.
"[21]In recent years, some members of the United States Congress have attempted to counter the runaway production situation with counter-incentives.
[22] The American Jobs Creation Act of 2004 contained provisions allowing U.S. producers of films with budgets under $15 million ($20 million if shot in a low-income neighborhood) to immediately write off their costs in a single year (if 75% of their principal costs are incurred via shooting in the U.S.)[5] It also allows producers to be taxed at a capital gains rate of 15% (rather than at the higher 35% personal income tax rate).
