One Man's Opinion: "A Hollywood Happy Ending?"

Speaking recently to Reuters, Walt Disney Company CEO Bob Iger said, "It would be very difficult for the company to do business in Georgia if the new abortion law takes effect."

Like or loathe the entertainment industry, in less than a decade they have become a significant player in and contributor to Georgia's economy. The last year for which data is available, 2017, puts that impact at $9.25 billion, with direct and indirect employment exceeding 100,000. Iger was not the first, nor will he be the last prominent industry voice to warn Georgia leaders about the potential impact of the new fetal heartbeat law, HB 481, signed into law on May 7, 2018, and intended to take effect on January 1, 2020 if not delayed or overturned by the courts.

Many of the industry’s major players have each issued statements indicating production halts, draw downs or departures...if the law goes into full effect, including Warner Media, NBCUniversal, Viacom, Sony, CBS and AMC thus far. That said, as of this writing, Georgia remains exceeded only by the entire nation of Canada, in current motion picture and television film productions.

The very generous Georgia Film Commission Tax Credits are the primary enticement, writing down/or off income taxes up to 30 percent of the hard costs of the film production by producing here in Georgia, and including our lovely Peach Georgia Film Commission logo in closing credits (no Peach, credit is 20 percent). Let's take the most recent example of what may become the world's highest box office film ever, "Avengers: Endgame." Though Georgia was not the sole production site, it is where the bulk of filming and a healthy amount of post-production were completed, with film production costs exceeded $300-million. Though these tax credits are not for federal income tax, they are transferable. That means if the expenses were legitimately incurred, and the producers/owners of the film don't need all those tax credits in Georgia, for now or future years, they can bundle and sell those credits.

One of the largest private investors in the industry and primary owner of what is now one of the world's largest film production studios, Pinewood Studios Atlanta (in Fayetteville, GA), is Dan Cathy, the CEO of Chick Fil AThe Cathy family and Dan in particular are well known philanthropists and donors, often anonymously, but thanks to all those stores and Chick Fil A sandwiches being consumed, he can also use a great deal of Georgia income tax credits. And a cottage industry has even developed of local brokers buying and selling those same tax credits to much smaller enterprises for a fraction of that full tax credit dollar.

There are two new film production studios in DeKalb County, the Screen Gems Studios at Lakewood near Hartsfield Airport and even a converted beer wholesalership warehouse, well cooled, insulated and spacious on the border of Tucker and Clarkston, Georgia housing the production of a handful of network TV series. And as those production facilities have taken root, many of those stars have purchased second homes and primary residences here as well. Establishing residency is not all that difficult and if you are an equity owner in the movie or TV series featuring your are then also eligible for those tax credits.

Georgia, along with so far five other states, has passed statutes significantly limiting legal access to abortion. These laws have yet to take effect in any of these states, with each seemingly racing and eager to land their law before the U.S. Supreme Court. Though over-turning Roe vs. Wade (1973), is spoken of most often as the goal of these efforts, the perhaps more relevant case law and Supreme Court precedent would be Planned Parenthood vs. Casey (1992). Without getting two heavily into the particulars of the latter case, the Supreme Court then had six GOP appointed justices (under President's Reagan and Bush), including the two most recent appointments, Justices David Souter and Clarence Thomas.

The case ended up being a divided judgment, decided by plurality opinion, written by Justices Souter, Kennedy and O'Connor, upholding the core constitutional right to a safe and legal abortion, within limits to be prescribed by and which may vary at the state level.

It will be more than slightly interesting to see the end of this story, whether high-minded Hollywood executives follow their principles, or their tax and bank account balances. Knowing what I have experienced of that industry, I'm betting on some pull-back for show, but largely sticking here with the green.

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