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Report: 'Iron Man 3' generated $180M, 2,000 jobs in NC

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WILMINGTON, NC (WWAY) -- A new report analyzing the impact of "Iron Man 3" filming in North Carolina shows the movie is responsible for $179.8 million in spending and 2,043 jobs in the state, according to the Motion Picture Association of America.

The analysis by MNP LLP assesses the economic impact of the production filming in North Carolina between December 2011 and December 2012. It also finds that the production is responsible for $104.1 million in labor income across North Carolina, and that spending associated with the film engaged 719 vendors in 84 communities across the state.

"These findings are just the latest evidence of the economic benefit that film and television production has meant for North Carolina," MPAA CEO Chris Dodd said in a news release. "Thanks to a reliable and refundable production incentive, North Carolinians have been able to reap the benefits of direct spending and job creation across the state. Marvel's 'Iron Man 3,' like so many prod uctions that choose to shoot in North Carolina, generated hundreds of millions of dollars in spending for local businesses in dozens of communities and thousands of jobs for North Carolina workers."

Data provided to the study by Marvel Entertainment shows the production spent $109.3 million in qualified production expenditures. Of that, the movie spent 17.4 percent, or about $19 million, on resident non-talent labor. That number, though, is only about half of the $33 million spent on non-resident non-talent labor. Talent for the movie, which is categorized as non-resident labor as well, made about $16.8 million.

The movie, which opens Friday nationwide, received $20 million in state tax incentives. According to the report, the incentives resulted in the following economic benefits:

-$8.99 in economic output for every dollar of tax credit received by the production.
-$6.50 in Gross State Product for every dollar of tax credit received by the production.
-102 full-time equivalent positions for every $1 million in tax credit received by the production.
-$5.20 in labor income for every dollar of tax credit received by the production.

The report does not consider infrastructure impacts on things like production facilities and equipment. Because "Iron Man 3" has not yet been released, the report says it is also too early to consider film induced tourism.

Click here to read the full report.

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This is why.....

I have a hard time with economic development agencies - like incentives for not just the film industry:

http://www.twincities.com/politics/ci_23147491/blistering-audit-faults-w...

*snip*
"Employees of the public-private entity also made unexplained purchases of University of Wisconsin football season tickets and iTunes gift cards, the far-reaching audit of the nearly 2-year-old Wisconsin Economic Development Corp. found."

The only thing missing is good quality cigars an you have? Uh-huh.....yeah
This is why the city should not support non government economic development agencies or the state to hand out incentives to any industry.
These programs are ripe for pilfering from.......

*snip*
It lacked invoices or other contractually required documentation showing authorized costs for seven of 29 grants reviewed, the audit said. Four contracts gave $906,000 total in tax credits for job creation and employee training that had already occurred, the audit said. Twelve of 14 recipients of grant and loan contracts worth at least $100,000 did not submit verified financial statements as required by law, the audit found."

Thank goodness at least the film industry has to spend the money first - but I wonder about the quality of the audits done to verify expenses?

Again - I'm against bribing private company's to come here.....and economic development, and incentives, seems to be areas where bribery is encouraged.

Vog

Just as I thought.......

http://filmworks.filmla.com/2011/06/24/californias-top-five-competitors-...

A snip:
"Over just five years, the cost of Louisiana’s film incentive grew almost 200%! With a 30-35% credit, Louisiana spent nearly $100 million on just four films in 2010!

Meanwhile in Georgia, the cost of the film incentive grew from $10.3 million in 2005 to $140.6 million in 2010, a breathtaking 1,265% increase!

Since both Louisiana and Georgia are facing projected budget deficits of well over $1 billion, it may be difficult to justify keeping their film incentive programs uncapped, if they opt to keep them altogether."

That's as of 2010.
This is a dangerous business to get into at a late stage like NC.

Vog

Incentive vs. rebate

Just do a little research and it will be apparent that the GA and LA incentives are structured very differently than NC's tax rebate program.

Or don't and keep blathering.

Again

This story dropped to pg 3 so it's probably not on everyone's mind right now so I'll repeat the question.

How are GA's and LA's movie incentive programs structured differently than NC's?

Vog

sheila-

"Just do a little research and it will be apparent that the GA and LA incentives are structured very differently than NC's tax rebate program."

How are they different?

Vog

Or....

You all can stay home, and for $8 bucks per month, watch Netflix...and no one has to go to the movies.
$8 per person per movie at the theatre....
$8 per month and Aunt Gladys can come over and watch for free and bring cake!

Short sighted

Anyone who thinks Iron Man 3 wasn't worth the State incentives can't see the forest for the trees. The movie production business is a relatively clean, harmless, economic engine that should be welcomed and embraced. If you really sit down and do the math on the money that gets pumped into the local/State economy, those singular trees (the reported figures), have a great multipier effect and become a lush green forest. Splitting hairs about the types of jobs, lost tax revenue, etc. obscures the greater benefits gained by this promoting NC as a great place to make movies.

I'm guessing you've got some skin in the game somewhere.

Seems like you're big on words and phrases like clean, harmless, economic engine, welcomed and embraced, lush green forest, etc. Those are all feel-good word pictures. Advertising sound bites if you will.

What you're apparently not big on are actual numbers; there being not one number in your post. You use the phrase "obscures the greater benefits gained", another sound bite, in lieu of providing any real data.

NC may or may not actually benefit from this industry after all of the kickbacks are factorerd in but you are most certainly not substantiating any of that by simply using a few feel-good phrases.

You come across as an industry insider with something to personally gain from your promotion. Because of that, I find it difficult to trust the veracity of your position without one number to back it up. When someone says that having concerns about the types of jobs and lost tax revenues is just "splitting hairs", alarm bells start going off all over the place. Anyone who says stuff like that is most definately trying to sell someone else a load of crap.

Last fiscal year,

Last fiscal year, productions filmed in Georgia generated an estimated $3.1 billion in economic activity, a 29 percent increase from the year before, according to state estimates.The economic benefits have been debated in Georgia, although the state has remained committed to the film incentives. Meanwhile, lawmakers in North Carolina are debating a plan that would place certain limitations on the state’s program, with supporters of the effort saying there’s no evidence the $30 million in tax breaks in 2011 matches the job growth cited by the industry. In comparison, Georgia handed out $140.6 million in tax credits in 2010.
Gov. Nathan Deal said it’s the combination of the tax credits and Georgia’s diverse landscape — from the mountains to the coast — that has made the state so attractive to filmmakers.Who in nc hands out 3.1 billion to the people of nc.

Extra

Most got 25 for the day. I think if we give the filming companys a tax break, we should get a percent of the profit.

most got 25 for the day? uh.

most got 25 for the day?

uh. that is under minium wage and that is illegal. I worked on the film as an extra many many times and was never paid that much. It was always 58 bucks for the first 8 hours and then time and half.
For those complaining that they don't get paid enough to be an extra. You aren't a crew members and it is not a "skilled job". Their job entails ALOT more labor than a background extra. Why should you get paid more??? Most people do extra work to supplement their income. You aren't supposed to live off it, there is not way. Maybe those complaining should get a really job.

Are those 2,000 still employed in NC??

Of those 2,000 jobs 'created' by the Iron Man 3 production, how many of those folks are still employed in those jobs? What happened to these 2,043 people after the filming - Did they go on unemployment?

And of those...

"2043" jobs "created"...how many are still working today? Keep in mind, if someone worked for just one day and that was it...it's a "job created". Figures lie...and liars figure.

Does the Motion Picture

Does the Motion Picture Association of America provide all the data to support the tax incentives? Is there an independent auditor of any kind?

Nope. The MPAA provide no

Nope. The MPAA provide no facts at all. And the local media relishes in simply rewriting the MPAA's press releases and reporting them as fact. They are just as star-struck and complicit as the state's legislators.

Does the MPAA provide all the data to support the tax incentives

The answer is NO! I have been an extra in two Motion Pictures. The first one --Bolden-- was never released, but they paid extras $11/hr. plus travel, and those extras with agents received even more perks.

Iron Man only paid the minimum wage to its extras, with no travel or hotel reimbursement. Some extras with and without an agent came from all over the state to work, and they were not compensated for their travel expense, and only when they arrived did they discover that they would be paid minimum wage. And this movie is schedule to gross over $100 million dollars in the first week of release.

you obviously don't know

you obviously don't know anything about production. I have worked on numerous production and I do know that no productions company gives extras travel or hotel reimbursements. They only offer that for cast/crew.

No

But at least we have some "numbers"
Sales tax is rounded off to 7%
NC income tax for those making between $12K and $62K is 7%

$180M X 7% = $12.6M
$104M in labor taxed at 7% = $7.28M
Or about $19.8M

The film received $20M in incentives
BTW - the big money stars who get royalties from IM3 pay taxes in CA not in NC.

If the tax code is re-written to reduce income taxes and RAISE the sales tax this might get better for NC as the biggest slice is in spending not wages.
Still not worth it to me and I don't know if I can trust these figures from the Motion picture association........
But the numbers are better.

Now take those income tax numbers and multiply them by a decade for permanent jobs. (Economists like decades)
Now you have $12.6 sales tax and $7.28 X 10 or $72.8M
for a total of $100M in taxes collected.
Well worth the money given.
Movies are hit or miss.

I just don't like this, as other states are upping the ante. This will get more costly as time goes on. Especially after the new studio is completed in Louisiana (or is it Georgia).
sorry - it's still a loser in my book

Vog

Vog!

You stated that other states are upping the Ante. Why are they upping the ante? Is it something they know or are they just dumber than we.
By chance last week I happened to meet a man that contracts lighting and sound to various film projects, he informed me that between Southport and Wilmington his company stays booked. Based on the truck he was driving, somebody is making some money.
Also I was so impressed with your logic for putting Brunswick County into South Carolina. What a sense of humor!

Mr T

I can't answer as to why other states are upping the ante, but North Carolina certainly doesn't have the market for stupidity cornered.
One of the state I mentioned is building a new studio to rival our own EUE studio on 23rd street. Now understand Mr T that other states have had better incentives for awhile.
The question for YOU is where is the line in the sand for us?
At what point do we say "it's not worth it"?
Perhaps the other state have better financial situations than we do? LS has oil and a big oil industry - does that give them more $ for incentives? If, IF incentives must be given NC has to be prudent.
Giving money for part time jobs doesn't cut it for me.
Full time jobs are better but I'd like to think NC can attract businesses without having to succumb to paying off corporations.
If we can't then there's more wrong here than meets the eye

Vog

So Vog

your answer is you don't know. This is the common position taken by our state reps. They don't know either. All we get from Raleigh is opinion based on which ever way the wind blows. We lost two mega deals because of Republican foot dragging not because we gave to much to the film industry. Can anyone name one job creation bill introduced by the current administration that would assist Eastern NC. I say until we see something better let's be happy with film.

Mr T

I totally agree that no jobs bills have been forthcoming.
Goolsby is more interested in pandering to anyone he can get to vote for him.
That said I ma not a believer in government intervention in this BUT if they insist on doing it again it should be prudently done.
WE do know that the state recoups the incentive monies many times over by incentivizing full time permanent jobs.
THe problem is cost:
$38,000+ each for 2600 MetLife jobs was a terrible idea
$400,000+ each for semi-seasonal stadium jobs was a terrible idea

But the PPD incentives have borne fruit as has Verizons, and both incetnives have worked out to be hundreds of dollars per job.
The movie industry is clean - but it is part time work, and many states have a large head start on us in the incentive process.
I just don't believe this administration SHOULD jump into this as they already have shown negligence with the MetLife incentive.
If we can't attract jobs through a developed workforce, educational support, lowered taxes and great infrastructure then we certainly don't need to be throwing cash at them. We'd go broke in a heartbeat. The question is do we have all those components and if not why not?

The return on investment for the state is highly suspect as far as movie jobs go and I am not willing to settle as you are until something better happens. That is a recipe for disaster and back room deal making from either party.

Vog

Vog

having read everyone's post, I ask again.

Why aren't heads of the NC and Wilmington Film Authorities up in Raleigh; beating on the drum to get the attention of the Legislative members who will ultinately decide the fate of the current incentives?

If these numbers hold water, one would think there would be night and day rallies on the steps of the Legislative Building and at the Governor's Mansion.

Maybe the bag is not water tight?

No Tom

There is very little fanfare in the other states.
Why? Because past and present administrations did so already?
Because their Governors are star struck?
Who knows?
As pro business as this administration claims to be, I'm somewhat chagrined that they haven't jumped feet first into this fray.
Which does make me wonder.........

Vog

But Vog,

other states are looking to expand incentives while this Legislature is considering modifications to rein in the spending.

One would think the proponents would take these numbers to Raleigh and work the Legislature hard and long.

At least that's how it works in other industries.

Not .so sure about that Tom

There are other considerations.
If Jindal says 3 years ago that he's openly competing with Nikki Hailey for film business AND LS (or GA)already has $3B worth of business they have enough work to make the jobs almost full time.
We don't have the luxury here of a head start, in fact we're behind on this.
We also don't have the luxury of other industries that provide tons of revenues (like the oil industry).
Personally I think the film "leaders" know all of this so rather than make a concerted effort they will let industry BS Artists speak for them in the hopes that NC might throw them a bone.

I think back to taxpayers post - the film company's are whores plying their wares to the highest bidder (and for part time jobs at best).
They are getting their share from other states - let them.
And as much as I admire the fact that movie making is "clean" it is certainly NOT the only metric to use when doling out our hard earned tax dollars.
That said just where does NC rank for film and TV industry spending.
I would assume we rank below CA, NY, GA, LS and FL
so we're really behind.
Is it worth attempting to catch up?
I guess the answer by their lack of Legislative pressuring is "NO" its not. Of course they may be trying to use NC as leverage against other state that have bigger incentives in the hopes of getting "more".

Vog

re: No

The assumptions made are that all materials purchased were subject to NC Sales Tax. If the purchaser is tax-exempt, then the sales tax figure is inflated...as you know.

I, as you, think the government tax incentives only further proves that the film industry "whores" will sell their "wares" to the highest bidder. How did Wilmington ever survive prior to the film industry? You would think that if it left here, Saffo, Hinnant, and City Council would be rolling up the sidewalks at dusk each night.

taxpayer

I thought they formed S corps and purchases were taxed as ordinary sales.
I guess I did make that assumption but I can't envision a tax exempt movie company.

We are just now talking about adjusting the incentives and already LS, and GA and SC are talking INCREASING their incentives.
I say let them have the movies.
And let NC increase incentives for more permanent employment - if the offer incentives at all - but - MetLife tells us we're willing to throw money at the whores as you say.
How far do you think my numbers are off if inflated?

Vog

re: taxpayer

Businesses who purchase products for use in the business are often exempt from paying sales tax at the time of purchase...or receive a refund when they submit the requisite form to the state for reimbursement. It would be interesting to hear from one of the "many suppliers of goods and materials" to see if the production company does in fact pay sales tax. Since that is an unknown at this point, I don't have any idea as to how inflated your numbers may be.

Personally, there's far too much emphasis placed on the film industry and not nearly enough in full-time sustainable jobs in the 5 county area.

Sales tax

I work for a vendor that provides services for local production companies. They pay NC sales tax to us when they purchase product. It's possible that they apply for the tax credit later, but initially, they pay the tax.