California Post Alliance Launches to Advocate for Tax Incentives; Assemblymember Nick Schultz to Sponsor Postproduction Bill
By Carolyn Giardina
An estimated 200-plus postproduction industry workers erupted in cheers last night when—during a membership drive launching the new California Post Alliance—field representative Amanda Faissal announced that State Assemblymember Nick Schultz (District 44) will carry a standalone California postproduction tax bill to Sacramento.
Technology and business decisions continue to change the entertainment industry, but this proposed bill is specifically aimed at “leveling the playing field”— something viewed by CAPA founders as crucial for California’s post industry—by targeting post business that is not evaporating, but rather being lured out of the Golden State. The intent of the standalone bill is to incentivize projects to post in California, even if they filmed elsewhere or were unable to qualify for the current tax incentive bill.
“Postproduction is an important part of our state’s creative arts economy. Proposing new legislation that focuses on postproduction builds on the work that we started last year expanding the film and television tax credit program,” said Assemblymember Schultz in a portion of a released statement.
“We are competing with other states and foreign countries for postproduction jobs, which is causing unprecedented threats to our workforce and to future generations of entertainment industry workers,” the statement continues. “This legislation will aim to provide incentives for VFX, editing, scoring, and more to preserve its infrastructure in California and provide a level-playing field for professionals in the entertainment industry.”
Advocacy is a key goal of the new CAPA 501(c)(6) nonprofit, which was created to encompass picture and sound editorial, scoring, VFX (in post, not on-set), and film finishing. Along with advocacy, its pillars are education and community.
Attendees and speakers at last night’s event included individuals from various areas of the business, both picture and sound. Conductor and producer Peter Rotter, founder of Encompass Music Partners and Encompass Creative, addressed the dire state of post. “Families can’t pay their rent on what little work is left. Editors are driving Uber instead of cutting reels. Sound designers are selling gear just to eat. The whole ecosystem is bleeding out,” he said.
(Photo: CAPA members launched the nonprofit on Feb. 4 at Burbank’s Evergreen Studios)
He warned, “Here in Los Angeles, continually, we are in clear and present danger of losing a major scoring stage.”
On the picture side, it’s widely known that Hollywood-headquartered post business Light Iron has been winding down its operations, with a source confirming that it may close it doors (in L.A. and its other locales) by the end of March. (A little more than a week ago, the writer of this article got a phone call from yet another accomplished member of the community, reaching out to share his decision to retire early and leave California. This person is not alone.)
“Whether we want to face this or not, this is where we are. We need to start thinking like partners in the industry,” Rotter asserted, noting that the disciplines need to work as a whole. “We also need our unions to sit down immediately with streamers, majors and independents, to honestly discuss ways to make these companies’ decision-making process one that isn’t avoiding California, but is rather pushing their decisions to wanting to stay here and create opportunities for us all.”
A bit of history for the uninitiated: Postproduction has long been a bedrock of Hollywood and California’s production industry. Wherever location filming took place, filmmakers would frequently return to California to post their movies, but this has been changing. These companies ranged from century-old brands such as Technicolor, to, in more recent decades, post houses such as Encore and Laser Pacific, which helped guide the industry through numerous inflection points, from analog to digital. Over the years, changes (and downturns) in the business prompted various companies to change hands or shut down, but whatever the name was on the door, inside were experienced talent and innovators.
“Postproduction was perfected in California, and we want to keep it here. We have the demand. We have the infrastructure. Most of all, we have the people. We have these amazing creatives and industry professionals that have honed this craft, this art form,” asserted CAPA vp and two-time Oscar-winning rerecording mixer Karen-Baker Landers of Formosa Group. “There no place like California,” she continued, receiving applause as she added, “I can’t bear the thought of losing it. I hate when [you hear other states or countries called] ‘new’ Hollywood. I mean, we are Hollywood. We are California.”
The CAPA board has already started to collect financial data with which to communicate the impact that tax incentives have on the business; this includes working with lobbyist, attorney and former State Assembly Member Alberto Torrico; and economist Adam Fowler from CVL Economies. Some of this information was presented during last night’s meeting.
(Photo: CAPA’s new logo)
Jennifer Freed, founder of Trevanna Post and CAPA’s treasurer, reported that some states (i.e. New York, New Jersey) and countries (from Canada to Qatar) offer dedicated post incentives. “We have basically—whatever verb you want—surrendered, forfeited, given away hundreds of millions of dollars, projects, jobs, to these other states and countries because California has not invested in this very important industry. So relinquishing this focus has left post facilities and crews in distress, unemployment, bankruptcy,” she said. “This has resulted in a steady erosion of a workforce that has defined California.”
As an example, she cited New York State 2024 4th quarter tax credit data, stating that the state “did give out $11 million in tax credits [in the quarter], but that $11 million came after $57 million was spent in postproduction.”
Fowler emphasized the cascading impact that downturns in post may have on California’s economy. “The editor’s salary becomes the mortgage payment that supports the local bank, the dailies lab and it’s a electricity bill supports the local utility workforce, whose trucks are serviced at a nearby mechanic shop … and so on,” he said, adding that each full time job in post effectively supports another job and a half.
“So for every editor or sound designer working on a project here in California, there is roughly one and a half other people employed because of that work—the rental house that supplies the equipment, the restaurant where the crew grabs lunch, the accountant handling the company’s books,” he elaborated. “That translates to roughly $1.6 billion in annual economic output, about $500 million in annual labor income that’s no longer circulating in the state, and I’m using the state’s numbers.”
Of this ripple effect, Fowler also asserted that for every dollar spent in the motion picture industry, “how much stays within our economy? The answer is 93 cents. That is a higher retention rate than aerospace, than biotech, than utilities. Why? Because we’re a legacy cluster. The expertise is here.”
He encouraged the community to respond to the current state of the business, noting “the window of time is really narrowing; other jurisdictions are just not standing still.”
While data gathering is underway, more is needed. To address that gap, CAPA intends to distribute an anonymous questionnaire with which to collect this information.
Fundraising has also started. Marielle Abaunza, president of the new alliance and executive vp at Signature Post, reported that CAPA has been advised that it could cost as much as $500,000 to “take the bill to the finish line.” The group is urging participation (more information is posted on CAPA’s web site). Abaunza told attendees, “we have taken this as far as we can alone, now we need all of you.”