FILMING GOES FOREIGN : PRODUCTIONS OUTSIDE U.S. COST JOBS.

Byline: Dave McNary Staff Writer

Runaway production of American films and TV shows to foreign countries has skyrocketed, shifting a stunning 24,000 jobs and $10.3 billion in annual economic benefit outside the United States, a study to be released today found.

``The study results show that economic runaway film and television productions are a persistent, growing and very significant issue for the U.S.,'' said the authors of the report, commissioned by the Screen Actors Guild and the Directors Guild of America.

The report, obtained Thursday and due for formal release today, issued an ominous warning that runaways are accelerating to as much as $15 billion in economic impact by 2001.

``Many foreign production infrastructure investments have been made by U.S. studios; these investments will continue attracting additional productions abroad,'' the report said. ``Furthermore, the increased globalization of the entertainment industry and incidence of international co-production agreements will also likely stimulate U.S. runaway production.''

The report, prepared by Monitor Co., shattered the conventional wisdom that most runaway production has been limited to relatively cheap TV movies-of-the-week.

A total of 100 of the 534 feature films produced last year left the United States for economic reasons, with Canada capturing such major yet-to-be-released titles as Disney's ``Mission to Mars,'' ``Reindeer Game'' with Ben Affleck and Sylvester Stallone's ``Detox.''

Reasons for the exodus from Hollywood include far lower costs of local crews and locations, government-sponsored incentives and weaker foreign currencies relative to the dollar. All told, the report said, producers going to hot Canadian locations like Vancouver and Toronto save at least 15 percent.

``We tell producers and the studios that they should stay in Los Angeles because you have tradition, time savings and you get a better look,'' said James Shanahan, vice chairman of the anti-runaway Film and Television Action Committee.

``But the reality of the matter is that all they care about is the bottom line.''

Shanahan, a production designer who has been out of work for 14 months, said producers routinely offer a Canadian budget when they work up cost estimates.

``At the very best, Los Angeles is holding steady but we're also hearing that more and more producers are looking at Canada,'' he said.

`Definitely pain'

The report's most startling calculations estimated economic impact runaways had jumped from $2 billion in 1990 to $10.3 billion last year, breaking down to $2.8 billion in production spending, $5.6 billion in indirect ``multiplier effects'' and $1.9 billion in lost tax revenues.

It also estimated that runaway job losses more than tripled from 7,100 in 1990 to 24,000 last year. ``The labor impact of the economic runaways is profound,'' said the report.

Job losses in 1998 hit actors hardest with a total of 11,000. Other losses included directors, production managers, drivers, and those in camera, sound, production design, wardrobe, makeup and set construction.

Economists believe tighter budgets and foreign shoots have helped cut the entertainment production job base in California to 131,400 last month from 142,500 in early 1998.

A `definite plan'

``There is definitely pain,'' said Jack Kyser, chief economist at the Los Angeles Economic Development Corp. ``As long as Canada has a weak dollar and aggressive incentives, we're going to see job losses because the industry is very bottom-line focused.''

Kyser said some of the flight from the United States could be due to lucrative salaries for stars forcing producers to trim below-the-line costs.

The report showed the number of productions leaving the United States for economic reasons jumped from 100 in 1990 to 285 in 1998 while ``creative runaways'' - films that depart because the setting can't be duplicated in the United States - edged up from 109 in 1990 to 114 in 1998.

What the figures clearly show is that foreign sites, particularly Canada with 232 productions in 1998, have managed to gain a much bigger slice of the growing production pie by rising from 14 percent in 1990 to 27 percent last year. Besides Canada, Australia, Britain, Ireland and Mexico have gained significantly.

Expenditures growing

The report noted that production expenditures in core production centers such as Los Angeles and New York City have been growing while activity at other U.S. locations has plunged - a 36 percent drop in North Carolina since 1995.

The latest figures from the Entertainment Industry Development Corp. show that Los Angeles production has remained relatively steady this year, rising 1.8 percent through May.

Reversing the tide

Although film production has fallen 14 percent year to year, it has picked up in recent weeks with high-profile productions such as ``Rocky & Bullwinkle,'' ``Nutty Professor 2'' and Julia Roberts' ``Erin Brokovich.''

``We've been working really hard to get city agencies to get their rental rates down,'' said EIDC chief Cody Cluff.

Directors Guild President Jack Shea said the report was to be presented Saturday to the DGA's national board, which will formulate a plan of action.

``The sky is the limit here,'' Shea told The Associated Press. ``We're going to do anything we can to try to protect the whole infrastructure of filmmaking in the United States.''

In California, the state Assembly has passed two bills that would provide tax credits for certain productions that use California labor.

``If the Legislature passes a tax credit, it send a great message to producers,'' Cluff said. ``I think a 5 percent credit will be enough to keep some production home.''