Film financing is a daunting task, particularly for independent and minority creators. That’s because making movies and TV shows isn’t necessarily an economically rational business. One expert estimated that more than 40% of all widely released films over the last 10 years flopped. And for independent producers without the backing of studio production budgets or ready access to capital markets, the challenges abound. Indeed, many indies end up maxing out credit cards, borrowing funds from loved ones, and mortgaging their homes to finance their films—unable to realize their creative visions without taking on these huge personal financial risks.
Understanding these finance related challenges, Governor Kathy Hochul deserves praise for her proposed enhancement to New York State’s Film Tax Credit Program. As a threshold matter, the credit will ensure that New York’s creative economy remains competitive.
Although not widely known, production jobs pay an average of $90,000 annually—37% higher than the median New York State wage in all sectors. That’s a significant wage, particularly when 44% of all jobs in that industry do not require a four-year degree. Furthermore, New York’s film productions created more than 114,000 local jobs and added more than $20.5 billion to New York’s economy from 2019–2020 alone.
But less well-known are the opportunities the credit creates for diverse and independent creators. Here’s how.
I’m a regular participant on finance panels at the Empire State Development (ESD) Multicultural Creativity Summit. At the annual summit, the ESD and Motion Picture Association partner to educate attendees about the New York film tax incentive.
A few years ago, I met a young Black filmmaker seeking financing for his first feature film. Although an avid New Yorker, he initially considered shooting in New Jersey. However, after the panel and our subsequent conversations about the accessibility of the NYS Program, he applied for and obtained a NYS Certificate of Conditional Eligibility (CCE). The CCE established that if he shot the project in New York and spent the funds as budgeted, his film would receive program credits. As I explained to him, that certificate (and the economic certainty it represented) is an “asset” that can be used as collateral with financiers to secure funding. He was able to do just that.
The film shot in New York in early 2022, hired more than 215 cast/crew members, created dozens of jobs for novice minority content creators, and is now in post-production. Without the incentive as a key component of its finance package, the project might still be just a script!
This story can and should be repeated over and over again.
My consulting business is primarily focused on helping filmmakers of color obtain financing; programs like New York’s incentive are an important piece of the finance puzzle. The NYS Film Tax Credit Program helps solve one of the most significant obstacles minority creatives face in the film business: Financial barriers to entry are too high to produce culturally authentic stories featuring diverse casts and crews.
A recent McKinsey & Co. study, for example, found that “Black-led projects have been consistently underfunded and undervalued even though there has been clear evidence that they outperform other properties when it comes to a return on investment.” This study shows that the lack of access to funding shortchanges both our industry and the culture; leaves $10 billion in revenue on the table annually; and deprives audiences of fresh new perspectives, voices, and talent.
By evaluating projects on a pure jobs-generation and dollars-spent basis, the incentive program delivers a colorblind, front-end boost that primes the pump for a richer mix of films and shows. The result is an active pipeline of New York-based projects telling stories for underserved audiences and giving diverse artists and crews on-set experience to launch their careers.
What’s more, the enhanced incentive will increase total annual funding for diversity and pipeline training programs to $3.5 million. And all credit recipients are required to produce diversity plans with specific goals to include training, education, and recruitment programs that will be used.
Because of the proposal’s diversity enhancements and continued access for minority content creators, more than 55 diverse New York-based filmmakers, film festivals, major creative industry guilds/unions, and other local creators have urged support for the enhanced program.
The appetite to produce diverse films and shows in New York is immense, but new productions can only get off the ground if they are economically feasible and can win support from wary financiers. For many diverse young filmmakers, the state’s production incentive program makes the difference between getting shut out and signing on the dotted line. The governor’s proposed enhancements keep the future of the film and television industry in New York State.
Chiquita Woolfolk Banks is CEO/owner of Bankable Consulting, Inc., a tax and legal consulting firm specializing in the film, television, and multimedia industries. At Bankable, Banks supports content creators, with a focus on filmmakers of color, and advises about options to finance the creator’s projects.
Great and informative article!