The movie “Deepwater Horizon,” which opens today in theaters across America, is a rare example of a locally shot film that actually tells a story set in Louisiana.
It's gotten kudos for its meticulous rendering of the events leading up to the 2010 explosion that took the lives of 11 men on a BP oil rig 50 miles off the coast, setting off the worst environmental disaster in U.S. history.
But it is also the most expensive film ever made in the state, at least from taxpayers’ perspective. Under the state’s generous film-subsidy program, Louisiana issued tax credits totaling almost $38 million to Lionsgate, the producer.
That sum eclipses what was given to the previous record-holder, “Green Lantern.” In 2011, the year of that film’s release, the box-office flop got slightly more state aid than the University of New Orleans did.
By comparison, “Deepwater Horizon” received the same amount from Louisiana taxpayers as the state this year put into UNO and Southern University at New Orleans combined. The subsidy amounts to $8 for every man, woman and child in Louisiana.
As it happens, the release of the big-budget production — which had a recent red-carpet premiere in New Orleans — comes amid a steep downturn in Louisiana film production. Nearly everyone in the industry attributes the falloff to a raft of changes to the film subsidy program made by the Legislature in 2015.
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“Our last big show was in December,” said Susan Brennan, who owns Second Line Studios in the Lower Garden District. “We’ve been mostly empty since. It’s been horrible.”
Baton Rouge’s sprawling Celtic Studios, meanwhile, offered its cavernous buildings to house people needing temporary shelter after August’s devastating floods — an offer made possible by the fact there wasn’t much else going on there at the time.
Phil LoCicero, president of the International Alliance of Theatrical Stage Employees Local 478, a union representing gaffers, grips, construction workers, set painters and other technicians, said his membership has held steady at about 1,300. But some members have relocated temporarily or taken on part-time jobs outside the movie business, he said.
“Some people are doing what they have to do to pay their bills,” he said. “Business is off a pretty decent amount. But we’re trying to keep our chins up and stay positive.”
The biggest legislative change to the film program in 2015 imposed an annual cap on the program of $180 million in tax credits. Other reforms were aimed at increasing the return on the state’s investment in the program, which independent economists have generally derided as paltry.
The cap, set to expire in July 2018, is thought to have driven productions to locales with fewer restrictions, including California, Canada and especially Georgia.
“If I want to come to Louisiana, I have to stand in line behind all these other movies that are waiting to be paid,” said Robert Vosbein, who owns Silver Screen Supply and is the president of the Louisiana Film Entertainment Association, the state’s trade organization. “Or, I could go to another jurisdiction where we don’t have to stand in line.”
In 2016, a total of 78 projects have submitted paperwork indicating they plan to spend $233 million in Louisiana, records from the state’s economic development department show.
If the final three months of the year continue at the same pace as the first nine months, this year’s planned spending will be down by 70 percent from last year. It would make 2016 the slowest year since the program’s meteoric growth started about a decade ago.
The metric is an imperfect one because it tracks expected spending rather than actual spending, and the two never match perfectly. For instance, the $1 billion in expected spending filed in 2015 included a film called “Gambit” that has yet to be made — and which has a projected Louisiana budget of $111 million, just shy of the $122.5 million spent here by “Deepwater Horizon.”
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Still, it’s as good as a barometer as there is.
Some in the industry see signs of an uptick, something they attribute to a couple of factors. First, the cap set by the Legislature is supposed to end in mid-2018, and given that it typically takes a year or more for a film to be pre-certified and then produced, that’s not as far into the future as it seems.
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Also, a one-year suspension of the state’s buyback program — through which film producers can sell their tax credits back to the state for 85 cents on the dollar — expired in July. The suspension further softened the market for tax credits, which can also be sold to third parties who want to reduce their tax liability.
The film subsidy’s critics — of whom there are many, including nearly every independent economist who has looked at the program — probably would be content if Louisiana never recaptures its crown as America’s feature film capital.
The most recent state-sponsored study, completed in 2015 by LSU economist Loren Scott, found that Louisiana gets back only 18 to 24 cents of each dollar it puts into the program. Other studies have come up with similarly lackluster results.
But defenders of the film program say the economists haven’t been able to capture the industry’s impact. And they say “Deepwater Horizon” is a perfect example of how a film can have a deeper ripple impact that’s hard to measure.
The film’s elaborate sets included a lifelike, nearly life-sized rig set in a huge pool (meant to stand in for the Gulf of Mexico) at the old Six Flags amusement park in New Orleans East, as well as a second rig built at the Ranch Studios in Chalmette, where much of the filming took place. The rigs required a reported 1,600 tons of steel, which came from Louisiana, according to state officials.
Jason Waggenspack, chief executive of the Chalmette facility, estimated that the filmmakers spent “tens of millions of dollars” in St. Bernard Parish. Along with spending at restaurants and other businesses over almost three months of filming, he noted that the producers hired construction workers and welders, including some idled rig workers, to help build the massive sets.
The filming at Six Flags presumably reversed the fortunes of what is usually a money pit for the city, at least for a few months.
The park, closed since 2005’s Hurricane Katrina, is managed by the city’s Industrial Development Board, which spends $10,000 a month just to secure the property. In addition, City Hall still is paying off a $25 million federal loan to the site’s original developers that city officials guaranteed almost two decades ago. Those payments will amount to more than $2 million this year.
Neither city officials nor officials with the IDB could provide information on how much the filmmakers paid for the use of the Six Flags site, which was recently appraised at $3.3 million.
The film program will undoubtedly be up for discussion in April’s legislative session, when lawmakers are expected to consider a broad menu of yet-to-be-specified tax reforms.
Film industry boosters are praying Louisiana makes a long-term commitment to moviemaking that is both predictable and stable. “Once you do that … Katie, bar the door,” said Vosbein.
But with the state staring at another massive structural deficit as temporary tax hikes near their expiration, lawmakers could also decide the program is a luxury Louisiana can’t afford.
Regardless of whether “Deepwater Horizon” heralds the end of an era or is a harbinger of what’s to come, the film’s record as the most-subsidized movie in state history is likely to stand.
That’s because one of the legislative reforms passed in 2015 was a cap of $30 million on how much any single film or project could reap in taxpayer largesse.
The cap did not apply to films that already had been pre-certified, as “Deepwater Horizon” had. “Gambit,” it’s ever made, appears to be the only other film conceived before the reforms that has a shot at topping $30 million.