Saturday, March 30, 2013

Further Proof Why California & Los Angeles Are Now Losing both Hollywood and Technology Jobs to Other States and Other Countries.

If there is any field that Los Angeles and California has been - and should have been able to remain - an easy number one in  - it's the visual affects industry.  It is the combination of entertainment and state-of-the-art technology - the state's two traditional strengths.

And yet that industry is not just leaving Los Angeles and the state - but it is rapidly approaching near total collapse due to Sacramento's refusal to support it by creating a level playing ground.  

First, one of the largest companies, Digital Domain, had to file for bankruptcy and is now largely owned by a Galloping Horse, based in Beijing, and other locally based companies, including such majors as Illusion Affects, CafeFX and Asylum Visual Affects completely collapsed and were forced to close their doors.  Then one of the best in the field - Rhythm & Hues - was forced into bankruptcy and was sold to locally based Prana Studios on Friday, with Prana just barely beating out bidders from China and India.

And, increasingly, even the last remaining locally headquartered companies, are being forced to slash their staffs to stay afloat as the industry flees California for the increasing numbers of states and countries that provide the tax incentives that Sacramento politicians refuse to even consider, and the industry's latest victim is Tippett Studio which is now being forced to lay off 50 employees - almost 40% of their work force as reported in THE WRAP, just to stay alive until they can get their next major job

Tippett Studio Chief on Layoffs: 'Why the Hell Doesn’t California Do Something?'

By Lucas Shaw & Brent Lang
Award-winning visual effects company Tippett Studio has laid off 50 employees in the latest blow to the embattled industry, and its chief Jules Roman wants California to step in and stop the bleeding.
Layoffs are not new at the company, which has been around for 30 years and contributed to blockbuster films like “RoboCop,” “Jurassic Park” and “Ted.” Many visual effects houses cut staff between big jobs.
Yet Roman says the financial problems afflicting her industry are “particularly bad now,” and argued it’s time for some outside assistance to keep jobs in the state.
“The bigger question is why the hell doesn’t California do something instead of letting it all go away?," Roman told TheWrap. “There so many territories with interventionist economic policies that it makes us feel we are really being preyed upon."
Roman said that the average person's kneejerk reaction would be to oppose helping Hollywood financially given that executives, agents and actors are earnings millions. However, those people are "above the line" and visual effects workers “are people way way below the line."
"We haven’t made that point very well," she acknowledged.
She dubbed the latest cuts, which reduce her staff of around 140 by almost 40 percent, a “hibernation” until another big job comes along. The company is just concluding work on “After Earth,” the futuristic M. Night Shamylan movie starring Will Smith and his son Jaden. They only have small jobs on the books for now“T
Tippett is the latest in a string of California-based visual-effects companies to experience financial difficulties. As it was confirming its own layoffs, Oscar-winning effects company Rhythm & Hues was in bankruptcy asking a judge to approve a sale to Prana Studios. Rhythm & Hues is one of roughly a half-dozen visual effects companies to file for Chapter 11 protection in recent years. 
Asylum Visual Effects, CafeFX and Illusion Effects were forced to shut their doors while Digital Domain filed for bankruptcy and was acquired by Galloping Horse America and Reliance Mediaworks for $30.2 million last September.
In February, the Visual Effects Society, an honorary society with some 3,000 members, called on state leaders to pass new tax incentives designed to keep more effects work in Hollywood. The group argues that California film subsidies, which began in 2009, are insufficient, and that until they are more generous, effects work will continue to migrate to places like Canada and the United Kingdom that offer more comprehensive packages for studios.
 The rest of this story by Lucas Shaw & Brent Lang can be found here at THE WRAP. And yet - when you read the business writers at the non-trade publications based in Los Angeles - they almost all are still saying that there is no problem and that Hollywood will never leave Hollywood.

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