About EPEP StoreEP BrandsSupportCommunityNews & Info
Newsroom Home

Film Commission Report Highlights Covid Costs as Production Ramps Up

Covid-compliance measures impact production budgets, estimating $90 million or more
December 6, 2021

As seen in Los Angeles Business Journal

The California Film Commission, headquartered in Hollywood, has conducted one of the first studies assessing the impact of Covid-19 on film and television in the state, estimating that protocols put in place since spring of 2020 added about 5% to production costs.

The CFC’s Progress Report, first released Nov. 16, published results indicating that films with budgets higher than $20 million in the state’s tax credit program, which incentivizes productions to stay in or relocate to California, have spent between 5% and 6.5% of their total budgets on protocols including both labor and personal protective equipment.

Measuring data from the third iteration of California’s tax credit program, which wrapped its 2020-2021 fiscal year June 30, the study was one of the first in the industry to quantify Covid compliance, formalizing costs that production insiders anecdotally set at 10%-15% of budgets. Joe Chianese, executive vice president at Entertainment Partners, a Burbank-based entertainment payroll and workforce management company, told the Business Journal those percentages may be lower purely because of the range of data collected.

“Four months into the pandemic, there were a lot more protocols and procedures put in place that helped productions — I won’t say minimize, but at least be more aware of what the costs were going to be,” Chianese said.

The 48 approved projects for Program 3.0’s first fiscal year will reportedly generate $2.6 billion in direct in-state spending, including more than $992 million in qualified wages. The 50 projects currently in the tax program expect to pay more than $90 million for Covid-related costs as a portion of aggregated budgets totaling $1.9 billion.

After having adhered to guidelines proposed in June 2020 by the Industry-Wide Labor-Management Safety Committee Task Force and later formalized by the Los Angeles County Department of Public Health, industry unions and guilds including the Producers Guild of America, Academy of Motion Picture Arts and Sciences and Directors Guild of America successfully negotiated the Covid-19 Return to Work Agreement in September 2020, which outlined safety requirements involved parties could subsequently modify based on changing Covid conditions.

Chianese said the state’s rapid implementation of protocols, which included PPE material availability, testing or vaccination mandates, and a multizone system based on each cast or crew member’s role on a production, aided the industry in getting back to work. For a larger production like Netflix Inc.’s “Beverly Hills Cop 4,” the Business Journal estimates it spent more than $7 million of its almost $80 million in qualified expenditures on Covid-related costs.

Meanwhile, a CFC force majeure provision likely alleviated costs associated with delays and interruptions.

“Once you’re admitted into the California incentive program, you have to start production within 180 days,” Chianese said. “So, given that there were delays in start times or delays in production in general, these force majeure provisions definitely provided relief to producers as well.”

California has aggressively courted production with incentives like those in Program 3.0, which added $180 million in subsidies for television and $150 million to renovate soundstages and totaled $660 million for all incentives offered over the next two years. The program seems to be working: In October, the CFC reported that 25 TV series have relocated to California since 2015 to take advantage of these incentives as well as the state’s well-established infrastructure for personnel, soundstages and other vendors.

Nevertheless, there are tradeoffs for coming to California for production, such as relocation costs if shooting a film or television series has already started somewhere else, that may undercut the value of some of those incentives. Additionally, Chianese acknowledged that programs in other states, such as those in Georgia, offer incentives that are just as attractive as those in Program 3.0. But given California’s pedigree as the birthplace of the entertainment industry, he indicated that the motivation to come (or come back) to the state may be both creative and financial.

“What California did is encourage productions to come back by offering a 25% credit where (other states) might only offer 20%,” Chianese said. “But if your talent lives here to do your production here, versus having to fly your talent wherever you’re shooting outside of California and housing them, there’s less of a cost. So, there’s a variety of reasons.”

Topic: COVID-19

Related Content

2022 Budgeting-sq

Budgeting for 2022: A Production Accountant's Guide

12/15/2021
EP's Payroll Tax, Production Incentives, and Business Development experts explain how inflation,...
More
Master Series: Budgeting for 2022-1

Budgeting for 2022: What Productions Need to Know

12/10/2021
From unemployment taxes and worker's compensation to the price of labor and materials, production costs...
Los Angeles Times logo-sq

California productions to spend at least $90 million on COVID-19 safety measures

11/16/2021
A new report has put a price tag COVID-19-related costs, according to data released from the California...
Los Angeles County Revised Health Order Eases Most COVID-19 Restrictions, Reinstates Masking Requirements

Los Angeles County Revised Health Order Eases Most COVID-19 Restrictions, Reinstates Masking Requirements

8/9/2021
Of note, the June 2021 Order (1) required unvaccinated or partially vaccinated individuals to wear a mask...
Cal/OSHA Updates Standards to Protect Workers from COVID-19

Cal/OSHA Updates Standards to Protect Workers from COVID-19

7/15/2021
Effective June 17, 2021, Cal/OSHA revised its Emergency Temporary Standards (ETS), which now accounts for...
actors on set

Safety on Set Amid Changing COVID-19 Guidelines

6/9/2021
What productions should know as they head back to work

Diversity and Pay Reporting in California

3/6/2021
Your guide to understanding SB 973 and its application to the entertainment industry

SB 973, California Pay Data Reporting Law FAQs

3/6/2021
The new pay data reporting law and its impact on the entertainment industry
New York City Imposes Mandatory Vaccination Requirement On Private Employers

New York City Imposes Mandatory Vaccination Requirement On Private Employers

12/22/2021
Starting December 27, 2021, workers in New York City must provide proof of vaccination against COVID-19 to...
MPI Contribution Processing Compliance Program-sq

Master Series Special Event: MPI Contribution Processing Compliance Program

12/3/2021
MPI shares important updates to the benefits administration and compliance program, coming March 7, 2022
film-festivals-online-or-in-person_sq

Film Festivals: Online or In-Person?

11/9/2021
Producers weigh in on the state of festival season post-pandemic, featuring Divi Crockett and Mike Drake

How to solve a compounding problem?

9/8/2021
The perennial shortage of production accountants has been made worse by the competition for resources, but...

New Terms Under Return-To-Work Agreement

8/30/2021
RTW extension includes new two-part delineation, and the role of the vaccine
Topic: Legal
More

‘No Straight Lines’ & ‘Firstness’ Among Top Winners At Outfest Los Angeles LGBTQ Film Festival – Complete Winners List

8/24/2021
Outfest has announced the award winners of its 2021 Outfest Los Angeles LGBTQ Film Festival.
New Terms Reached Under Return-To-Work Agreement: Delineation into Two Parts, and the Role of the Vaccine

New Terms Reached Under Return-To-Work Agreement: Delineation into Two Parts, and the Role of the Vaccine

8/23/2021
In September 2020, the AMPTP and the industry’s Unions issued a Return-to-Work Agreement setting forth...
Rate-In-Effect Permitted As Alternative to Weighted Average For Overtime with Multi-Pay Rates

Rate-In-Effect Permitted As Alternative to Weighted Average For Overtime with Multi-Pay Rates

8/9/2021
The California appellate court in Levanoff v. Dragas upheld the employer’s use of rate-in-effect, citing...
Federal OSHA’s New Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace

Federal OSHA’s New Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace

8/9/2021
The guidance contains recommendations for maintaining a safe workplace, with a particular emphasis on...
EEOC Approves Employers Mandating Employee COVID-19 Vaccination, with Exceptions

EEOC Approves Employers Mandating Employee COVID-19 Vaccination, with Exceptions

8/9/2021
EEOC declares employers do not violate disability rights or other equal employment opportunity laws by...
California Supreme Court Surprises Employers on Penalty Rate Used for Meal and Rest Break Violations

California Supreme Court Surprises Employers on Penalty Rate Used for Meal and Rest Break Violations

8/9/2021
In mid-July, the California Supreme Court issued a long-awaited decision concerning the correct payrate...

5 Things to Know Before Relocating for Your Next Job

7/20/2021
What production workers need to consider before moving to a new state
Anthony De La Rosa EP Residuals

The Beginner's Guide to Film and Television Residuals

7/7/2021
Important details every producer should know as they budget for their next project

Entertainment Partners Launches New Production Incentive Tools

6/21/2021
New Online Tools help Filmmakers and Producers to Identify their Best Global Tax Incentives
Sarah Westman-liu and Jennifer Liscio

Canadian Incentives and Legislation News

6/10/2021
The latest updates on incentives, CRA guidance on COVID-19 related costs, and more!

Global Payroll Titan Award 2021

4/29/2021
Davida Lara, CPP, named this year's Global Payroll Titan

COVID-19 and the Impact on State Unemployment Insurance

4/13/2021
How high unemployment claims have led to increased SUI rates across the US
California Revives COVID-19 Supplemental Paid Sick Leave for California Workers

California Revives COVID-19 Supplemental Paid Sick Leave for California Workers

4/8/2021
On March 19, 2021, Governor Newsom of California signed into law Senate Bill 95 which revives the...

Entertainment Partners Introduces Wage Data Reporting Solution

3/26/2021
EP offers new service to help employers prepare their SB 973 reporting
Producing through COVID women producers panel

Producing Through COVID-19: A Discussion with Six Prominent Women Producers

3/25/2021
Stories of navigating the entertainment industry and producing during a pandemic

Legal Alert: DFEH Offers Further Guidance on SB 973 Reporting

3/18/2021
Resources aid studios and production companies with compliance as California enforces new pay data...
Topic: Legal
More
The DFEH Offers Further Guidance on SB 973 Reporting

The DFEH Offers Further Guidance on SB 973 Reporting

3/16/2021
In February 2021, the Department of Fair Employment and Housing (DFEH) issued more detailed guidance for...
Rounding Prohibited for California Non-Union Meal Breaks and Penalties

Rounding Prohibited for California Non-Union Meal Breaks and Penalties

3/10/2021
On February 25, 2021, the California Supreme Court ruled in Donohue v. AMN Services, LLC that rounding is...

Returning to Production: Hair and Makeup Teams Apply COVID-19 Protocols to Life on Set

2/26/2021
Getting back to work: a look inside set life during COVID-19

Profiles in Leadership: Martin Mazor, SVP and CISO, Entertainment Partners

2/21/2021
Why Identity is at the Core of Every New Security and Business Initiative

The Beginner's Guide to Production Incentives

2/17/2021
EP helps filmmakers navigate the complex world of film and television incentives

Digital Production Studio

Production Finance StudioProduction Management StudioEnterprise Management Hub

EP Sites

Central CastingEntertainment PartnersEP StoreSyncOnSetThe Production CommunityWe Got POP
Subscribe now

Be an industry insider with EP's
newsletters and alerts

LegalPrivacy NoticeSecurity
© 2022 Entertainment Partners. All rights reserved.