The Detroit Lions did not play in the Super Bowl this month. Nor did Ford Field host Super Bowl XLV pitting the Green Bay Packers against the Pittsburgh Steelers. Yet Detroit got a big shot in the arm from the Big Game in the form of a two-minute Chrysler commercial that aired during the telecast to critical and public acclaim.
“Born of Fire,” directed by Samuel Bayer of Serial Pictures for Wieden+Kennedy, Portland, Ore., plays as a stirring anthem to Detroit. In some respects the sought after economic comeback of Detroit is intertwined with that of Chrysler as we see gritty urban images and vacant factories, yet feel an attitude of perseverance and survival in the face of adversity. Also captured are city landmarks, skyscrapers and facial expressions of hope from people in the Motor City. We also eventually see Eminem driving a Chrysler 200, with all the action playing to the strains of his music from 8 Mile.
“What does this city know about luxury, huh? the narrator asks. “What does a town that’s been to hell and back know about the finer things in life? Well, I’ll tell you–more than most. You see, it’s the hottest fires that make the hardest steel.
“Because when it comes to luxury, it’s as much about where it’s from as who it’s for. Now, we’re from America, but this isn’t New York City or the Windy City or Sin City, and we’re certainly no one’s Emerald City.”
Online buzz was overwhelmingly positive about the spot and its “Imported from Detroit” mantra/tagline. And industry feedback was generally glowing, as reflected in SHOOT’s annual informal survey of ad agency creatives regarding the crop of Super Sunday ads. For example, Neal Davies, partner in Naked Communications, New York, assessed, “What I really enjoyed, what saved the Super Bowl for me, was Chrysler’s ode to Detroit. A two-minute celebration about a city that’s been to hell and back. It was done in such a convincing and beautiful way, with the Eminem music from 8 Mile and then the reveal that he’s driving the car. They used the two minutes to make a statement in the Super Bowl environment, asking us to indulge them while they shared what they thought was something important. That stood out for me in a positive way.”
Cindy Winetroub Rogers, creative director, Partners+Napier, Rochester, N.Y., said of the Super Bowl commercials, “My favorite was the Detroit anthem for Chrysler–powerfully written, beautifully executed, cinematic and big yet real and honest. I’m a sucker for those manifesto sort of things. It made me want to root for Detroit and Chrysler.”
Whether that rooting will translate into buying Chrysler offerings remains to be seen. Still, the Chrysler anthem did–on the biggest ad stage of them all–what its creators hoped it would do: make Chrysler a buzz-worthy topic, the first step in reviving a brand.
This rallying cry seemed to buoy not only Chrysler but Michigan itself. Paradoxically, though, this catalyst commercial–though it was shot entirely in Detroit with a local cast and crew–didn’t qualify for Michigan’s extensive tax credit program, which applies to theatrical features and television programs. So one catalyst wasn’t aided by another. But now there’s even some question as to whether those filming incentives will be as inviting as before, even for movies and TV.
Indeed as an anthem on the Super Bowl invigorates Michigan, there’s some doubt as to the future of another catalyst–the state’s groundbreaking tax credits program. It all boils down to whether or not the expense of the initiative, which covers as much as 42 percent of local expenses for an eligible project, is justified on the basis of return on investment. That debate went on during the recent gubernatorial election won by Rick Snyder and continues as states throughout the U.S. battle significant budget shortfalls and understandably are looking to cut expenses.
As SHOOT went to press, Gov. Snyder was scheduled to release his first fiscal year budget for Michigan. The film industry is keeping a watchful eye on that budget in that it’s likely that changes could be made in the state’s film tax credits program. During the gubernatorial campaign, it was anticipated that Snyder would look to rein in the filming incentives package. He has said that the program needs to be carefully explored and scrutinized. Speculation as to how or if he intends to reform the program will be answered in large part with the release of his budget for the State of Michigan.
Snyder’s predecessor, former Gov. Jennifer Granholm, said last year that the program has proven to be successful. “Michigan’s film incentive program has made our state one of the top three in the nation for the production of all types of media,” said Granholm during her weekly radio address on April 2, 2010. “An entire new industry is emerging in Michigan, one that’ll help keep our talented young people here.”
In its 2009 annual report, the Michigan Film Office related that filming expenditures in the state increased from $125 million in 2008 to an estimated $223.6 million in ’09. That figure was a mere $2 million in ’07, prior to the incentives program being enacted.
In its latest semi-annual project report released last month, the Michigan Film Office related that in 2010, 119 production companies applied for film and digital media incentives, with 69 projects approved. Forty-eight incentivized projects wrapped in ’10. From July 1-December 31, 2010, 26 approved projects represented a total estimated Michigan investment of some $168.6 million as compared to some $65.7 million in credits requested. Additionally, many of the projects approved in late ’10 do not start production until this year.
However, another report–prepared by economist David Zin for the state’s Senate Fiscal Agency–concluded that the price of the Michigan film incentives program exceeds the economic activity generated.
Indeed Zin’s study does not look at lensing incentives through rose-colored glasses. Part of his report’s conclusion read:
“The analysis of film incentives is a complex process. Many assumptions and interactions must be accounted for and studies will differ in both the manner and degree to which these issues are addressed. Failure to address several of the issues that arise can cause results to differ by factors of more than 10, or even produce results that differ in the direction of their impact. Studies that have produced lower impacts for film incentives have generally addressed more of the issues and/or used more realistic assumptions, but such a claim cannot be made universally about the studies….
“Regardless of what factors are accounted for in the analysis, film incentives have generally exhibited a positive private sector impact in the form of creating employment and generating income. The magnitude of impacts depends upon a wide variety of assumptions. In Michigan, however, the sector is very small relative to the size of the economy, accounting for less than 0.1 percent of gross domestic product by state and about 0.14 percent of wage and salary employment. If the MSU [Michigan State University Center for Economic Analysis] report’s employment projections are correct, the sector will increase in size by approximately 50 percent over the next five years. however, this growth would represent only roughly 2,900 jobs, about 8.1 percent of the jobs lost between May and June 2008. The information sector, of which media production is a subsector, lost 3,100 jobs in 2008–even with the film incentives. If the incentives have the impact forecasted in the MSU study, it will be insufficient to bring the information sector back to its 2007 level. Any probable impact from the film incentives is likely to have a negligible impact on economic activity in Michigan, particularly when the economy is viewed as a whole.
“As is true for most incentives,” continued the Zinn report, “the film incentives represent lost revenue and do not generate sufficient private sector activity to offset their costs completely. As with other types of incentives and credits, whether the relationship of costs to benefits is acceptable is a decision for individual policy-makers.”
Still there are tangible benefits that are difficult to put a specific dollar amount to, such as the impact on tourism with state locations and attractions gaining exposure in film and on TV. Plus there’s the infrastructure being created by increased filming business. For example, Raleigh Studios is slated to open a stage facility and production complex in Michigan later this year.
The Chicago Code
Premiering on FOX earlier this month was the primetime series The Chicago Code, which according to early projections will generate approximately $25 million in economic activity and create more than 400 Illinois jobs. Created by Rockford, IL. native Shawn Ryan and starring Chicago born Jennifer Beals, The Chicago Code is a drama that follows Chicago police detectives daily on the streets of the Windy City.
Illinois Gov. Pat Quinn described the series as being a “great example of how the film industry creates good Illinois jobs and improves our economy. The state’s strengthened film tax credit demonstrates our commitment to growing this industry and creating more opportunities for people to work.”
During a visit with the series cast and crew, Gov. Quinn indeed affirmed the importance of Illinois’ Film Tax Credit as being instrumental in spurring growth of the state’s film industry and infrastructure. Illinois offers a 30 percent tax credit to filmmakers for money spent on Illinois goods and services, including wages paid to Illinois residents. Previously the tax credit was 20 percent. As a demonstration of Illinois’ commitment to the film business, the yearly sunset provision was removed in ’09. The tax credit program applies to features, TV, commercials, branded entertainment and other content forms.
Betsy Steinberg, managing director of the Illinois Film Office, noted that The Chicago Code provided “an additional boost to what has already been a terrific year for the Illinois film industry. Not only has production of the series been great for the local labor force and industry vendors, but the economic impact–on top of other blockbuster productions [i.e,, Transformers 3] this year–is great for the Illinois economy and job creation.
Incentive impact
While several states face staggering deficits which have caused them to revisit the viability of their film incentive programs, perhaps they, including Michigan, could learn a lesson from Los Angeles, a production mecca which too has a massive budget shortfall as does for that matter the State of California.
California is in the second year of its Film and Television Tax Credit program, which has proven successful but underscores how more is needed. With $100 million allocated this current fiscal year, 30 projects (19 features, eight TV series and three telefilms) applied and were approved fairly quickly, exhausting the year’s funding, and leaving assorted others on a wait list.
Still, limited reach is better than no reach at all as reflected in on-location filming activity as reported by FilmL.A., the not-for-profit community benefit organization that coordinates permits for organization that coordinates permits for filmed entertainment shot on-location in the City of Los Angeles, unincorporated parts of Los Angeles County and various other local jurisdictions.
On-location feature production posted a 28.1 percent fourth quarter gain and a year-over-year gain of 8.1 percent (5,378 film permitted production days in 2010 vs. 4,976 in 2009). According to FilmL.A., the annual increase can be wholly attributed to California’s Film and Television Tax Credit. Estimates from the California Film Commission show that since program inception, incentivized projects have injected $2 billion in direct spending into California communities, including over $697 million in wages paid to below-the-line workers.
In 2010 alone, the state program attracted dozens of new feature film projects to Los Angeles, which were responsible for 26 percent of local feature production for the year (totaling 1,400 permitted production days). Were it not for these projects, 2010 would have been the worst year on record for on-location feature filming in Los Angeles.
“The California Film and Television Tax Credit is one of many ladders to help our state climb out of the fiscal ditch we have dug for ourselves by pushing away businesses and jobs,” said state Assemblyman Cameron Smyth (Santa Clarita. Calif.).
She continued, “Here in the legislature, we need to use the success of this tax credit as a model for how to stimulate California’s economy. I’m looking forward to working with my colleagues on both sides of the aisle to create jobs and to continue fostering a healthy environment for production.”
