Georgia film business bounces back from pandemic with record-setting 12 months: $4 billion in direct spending

What's in production in Georgia: a "Shazam" sequel, a Rosario Dawson HBO series "DMZ" and a "Father of the Bride" reboot with Andy Garcia. CREDIT: publicity photos
Caption
What's in production in Georgia: a "Shazam" sequel, a Rosario Dawson HBO series "DMZ" and a "Father of the Bride" reboot with Andy Garcia. CREDIT: publicity photos

Credit: Publicity photos

The state drew $2.2 billion in fiscal year 2020.

The Georgia film and TV business quickly shook off the pandemic the past fiscal year, generating a record-setting $4 billion in direct spending, according to the Georgia Department of Economic Development.

For the year ending June 30, 2021, film and TV production companies spent nearly twice as much as they did in fiscal year 2020, when they generated about $2.2 billion. The previous record was fiscal year 2019, when the number hit $2.9 billion.

The film business was effectively shut down for nearly one-third of fiscal year 2020, from mid-March until the end of June. Production gradually began to come back last summer and into the fall with Tyler Perry Studios the first to shoot scripted programming in mid-July by quarantining its entire show cast and crew for two weeks at a time on campus.

On the set of "Sistas" at Tyler Perry Studios in July 2020.
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On the set of "Sistas" at Tyler Perry Studios in July 2020.

Credit: Tyler Perry Studios

Credit: Tyler Perry Studios

With safety protocols in place, other studios were largely back in gear by September. With other cities such as Los Angeles and New York slower to reopen than Georgia, demand for studios in Georgia skyrocketed. By January of this year, 50 active productions were going on at the same time, the most ever.

“We’re still scrambling for space,” said Lee Thomas, who heads the Georgia Film Office, in an interview with The Atlanta Journal-Constitution.

She noted that International Alliance of Theatrical Stage Employees Local 479, a union representing many film and TV crew members in Georgia, had reported record employment by the first quarter of 2021.

“Because Georgia was the first state in the country to reopen our economy and worked with film productions across the state to ensure they could safely continue operations, the Peach State’s film industry is leading the nation,” said Gov. Brian Kemp in a press release Wednesday.

Among the productions that have been shot in Georgia in the past 12 months are mainstays such as AMC’s “The Walking Dead,” Netflix’s “Ozark” and Fox’s “The Resident,” as well as new productions such as “Shazam! Fury of the Gods,” a remake of “Father of the Bride” starring Andy Garcia and HBO apocalyptic drama “DMZ” starring Rosario Dawson.

Some TV shows and films moved to Atlanta from other parts of the country in part because Georgia opened up sooner. Examples included the second seasons of BET+’s “First Wives Club” and Hulu’s “Woke.”

Of the 366 productions that qualified for the tax credits, 222 were for TV, 21 were feature films, 45 were indie films, 57 were commercials and 21 were music videos.

Hollywood productions had to rent more space to deal with pandemic-related protocols for social distancing and “pods” for different departments. They also had to spend more money for medics and coronavirus testing. These higher expenses helped lead to more spending in the state as a whole.

Ryan Millsap, who recently sold Atlanta-based Blackhall Studios and its nine soundstages, said COVID protocols raised costs by about 25% the past year.

Ryan Millsap CEO of Blackhall Studios recently announced that the deal to exchange 53 acres of land along Boudercrest Road in DeKalb County for a small part of Intrenchment Creek Park has been finalized. CONTRIBUTED
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Ryan Millsap CEO of Blackhall Studios recently announced that the deal to exchange 53 acres of land along Boudercrest Road in DeKalb County for a small part of Intrenchment Creek Park has been finalized. CONTRIBUTED

But that could change soon. Unions related to film production this week came to a tentative agreement to scale back some of the COVID protocols and give studios the option to require vaccines for particular cast and crew.

Some shows and films in recent weeks have taken brief breaks after a positive test popped up. For instance, Hulu’s “Woke,” shooting in Atlanta, suspended production Tuesday when a department head tested positive, but filming resumed Wednesday, according to Variety magazine. Unvaccinated crew members in that particular zone will have to quarantine for two weeks and in some cases, be replaced. Vaccinated members were able to come back to work without any need to quarantine.

Georgia now has about 120 soundstages and more than 5 million square feet in mostly new studio space with about 50 soundstages in the planning stages at places like Trilith Studios and EUE Screen Gems. Atlanta-based Gray Television recently announced it was building at least 10 soundstages at the former General Motors plant property in Doraville.

Millsap said New York has more soundstages, but Georgia has more square footage. He thinks Georgia now exceeds Toronto, London and Vancouver, British Columbia, in soundstage space. Only Los Angeles remains larger.

“With all the streaming services and platforms,” the film office’s Thomas said, “I don’t think there is enough stage space in the world to create everything they want to make.”

TV and film production companies, most of them based outside of Georgia, can take a 30% tax credit for every $1 spent, a system created in 2008. That means, for a $100 million production, a Paramount Pictures would receive $30 million worth of tax credits. But most companies like Paramount don’t owe a lot of state taxes in Georgia so they will go into the open market and, using a broker, sell those tax credits at a discount to companies and individuals who carry large tax loads in Georgia.

And unlike most states, the Georgia tax credits are not capped, which has drawn high-budget films such as “Black Panther” and the upcoming “The Suicide Squad” and “Jungle Cruise” to the state. The state last year tightened its auditing rules for productions after 2020 Georgia Department of Audits and Account reports showed that some companies received millions in tax credits they didn’t earn. It called such lax oversight “ideal for fraud.”

The cited $4 billion in direct spending equates to about $1.2 billion in tax credits. That equals 4.6% of the entire state budget for Georgia, which was about $26 billion in fiscal year 2021. Direct spending is how much production companies spend on a film or TV show that qualifies for the tax credit, such as set buildout, salaries, catering, hair and makeup and rental fees.

J.C. Bradbury, a Kennesaw State University economics professor and critic of the tax credit, said this is an ever growing “corporate welfare program that averages more than $300 per household in the state. Would the average Georgia family rather have $300 a year or Jason Bateman getting $300,000 per episode of ‘Ozark’? Because that’s the choice we’re making by continuing to fund tax credits.”

But even as some Hollywood celebrities grouse about laws passed by the state, including the recent voting law, there has been no evidence of any major pushback from studios. The only major production to pull out after the voting changes were signed into law was Will Smith’s runaway slave drama “Emancipation.” And there have been no major moves by the Republican-led state legislature to scale back the credits in any tangible way.

While the state has touted the jobs created by the tax credits, it has not created a system to rigorously study the results of the program. And unlike many other states, it does not release a breakdown of how the tax credits are distributed to any individual production.

FILM AND TV BOOM IN GEORGIA

After being shut down due to the pandemic, the film and TV business reopened bigger than ever, with 35 to 50 productions happening at any given time.

Here are some productions happening now:

“Jerry and Marge Go Large”

A film starring Bryan Cranston and Annette Bening about a man who found a loophole in a state lottery and made millions.

“Shazam! Fury of the Gods”

A sequel to the 2019 hit film about a foster kid who can transform into superhero Shazam! It recently shot major action scenes in downtown Atlanta.

“Father of the Bride”

A remake of the 1950 Spencer Tracy film and 1991 Steve Martin vehicle that focuses on a sprawling Cuban American family led by a dad played by Andy Garcia.

“Black Panther: Wakanda Forever

This sequel to Marvel’s hit 2018 movie “Black Panther” will feature most of the original cast despite the death of original lead actor Chadwick Boseman.

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