C (3:23)

Thanks for having me.

B (3:24)

All right, so we're going to talk about this renewed effort for a federal tax incentive, but I want to just ask right off the bat, this has been a problem for 20, 25 years now. There has been production fleeing Los Angeles, California, for other areas in this country and elsewhere. Where have the politicians been on this? It literally feels like it took a strike and a fire and two fires and AI and, you know, all of these things combined to get people to pay attention. So where have. Where has the politicians been on this?

C (4:07)

Well, some of us have been fighting this for a long, long time. I've been fighting for this ever since I got to Congress. The problem is, I think in the beginning, if you flashback 25 years ago, there was an attitude that, well, everyone wants to work in Los Angeles. That's where the talent is. That's where the infrastructure is, so we really don't have to do anything to compete. Well, then other states and other countries started offering incentives and some of that business started leaving. And nevertheless, when we tried to push for a federal tax credit to try to match some of the incentives elsewhere, we got pushback. It wasn't very bipartisan. It was mostly Democrats trying to make

B (4:49)

the case, why are we funding these Hollywood people? You heard it over and over.

C (4:52)

Exactly. Well, I remember even going back before my election to Congress when I was in the state legislature, I remember offering a tax incentive bill in the state legislature and getting a copy of the Republican committee memo. And now these memos are supposed to be completely nonpartisan, but someone gave me a copy because it was so outrageous. And basically the author of the memo writing this for the members, the Republican members of the Judiciary Committee that would take up this tax credit, said, why do we want to give help to those rich Hollywood liberals sitting at their Beverly Hills pools sipping martinis? Why would we want to give them any help? So that we've always had to overcome that kind of view. And it's also the, the kind of typical idea that Hollywood is all movie stars.

B (5:45)

No, I know, but that's changing, right? I mean, I feel like the messaging on that is getting better, that this is a industry that supports thousands of middle class jobs, that there is a creative class that cannot support itself in California now. And something needs to be done. So. So tell me a little bit about this effort for a federal tax credit and why this time is different, why there's momentum now and how you plan to get this over the finish line.

C (6:13)

Well, you're absolutely right. I think there is much different and better appreciation now about all the jobs that come with this industry, about all the below the line people, the carpenters, the grips, the set designers, the wardrobe people, the lighting people, all of these important jobs, decent paying jobs that are at risk. And that along with all the developments since as other countries have upped their incentives and huge aspects of the industry have not only moved out of California, but moved out of the country, has finally gotten people's attention. And it may have taken a pandemic and the flight of all this good work overseas and the strikes and everything else to focus the country's attention on how much of this important industry we're losing. But we finally have captured the attention of Congress. We still have a lot more work to do on this. But, you know, we do hear signs, even from the White House, even from the President, of concern over the loss of this industry. What we have yet to do is coalesce around an incentive approach rather than some of the other approaches that the President has mentioned, like tariffs or whatnot. But I think we're getting a lot closer.

B (7:25)

Okay, so what specifically would your federal incentive entail?

C (7:30)

Well, it would give a tax credit on top of state tax credits. So it would be cumulative and it would have incentives built in to bring business back to the country. It would also have incentives for some of the smaller production shops, but basically would function the same way the California tax credit does. It would be complimentary and additive. And given how generous the tax incentives are in places like Britain, it's insane.

B (7:56)

Everybody I know is in the UK right now. It's insane. If you want to produce a big budget movie, it's where you go. Because the tax incentives are so generous there, it's amazing. So what would you, would yours be a 10%, 15%, 20% national credit?

C (8:12)

It would be a baseline of 15%, but then you would add on depending on whether work comes back and other factors. All of that, of course, will be the subject of negotiation. This has to be bipartisan. It won't be successful otherwise. You really can't do much of anything in the Senate or the House unless you have bipartisan support. So we're really making outreach and trying to be flexible in those terms. But what we saw, for example, with Georgia, they made a major investment in the entertainment industry in Georgia. They attracted some of these big tentpole productions. And as the witnesses who testified at that hearing that I held recently in Burbank spoke to the minute that the UK upped their incentives, those big productions left on a dime. They left Georgia after Georgia invested all that time, money, expense and training into their own film industry. And now that's all gone to Britain as well. So we really need a federal tax incentive to be competitive, otherwise it's going to be gone.

B (9:18)

So you talked about bipartisan and how this has to be bipartisan. Yet at your hearing last week, it was only Democrats. Like, how are you going to get Republicans interested in this? Especially if the president is not talking about a federal incentive, he's still talking about, about tariffs. Like, what's the strategy there?

C (9:38)

Well, we are, you know, reaching out to my Republican colleagues, and they were Republicans who were interested in coming to the hearing but weren't able to, that it was too far, too difficult, particularly with all the uncertainty in the Senate around our voting schedule. But I don't, I think there is far more Republican interest in this. What the Republicans in Congress are basically telling us, though, is they're waiting for the white smoke from the Vatican. They're waiting for the president, the equivalent, the presidential tweet saying that he's supportive.

B (10:11)

Why hasn't that happened yet? Stephen Paul, Jon Voight's manager, says he has the ear of the president. We saw some reporting about how that conversation led to the tariff post that the president made months ago. What's being done behind the scenes to get the president interested?

C (10:31)

Well, the president's own ambassadors to the industry, as I understand it, have been making the case, have been working with the Motion Picture association to make the case to the President that the very best way to do this, and it's not like we don't have experience in this, is a tax credit that will match what other countries are doing. So I'm not inside those conversations between the president.

B (10:57)

And it's probably we know what the president has said about you personally, but that's why this needs to come from the other side here.

C (11:04)

Yeah, well, you know, I made it clear to everybody in the industry, I don't care whose name is on this let's just get it done. This is an amazing industry. It produces so many great jobs in America, in Los Angeles, in my old neck of the woods as a House member, but in the whole state. We really need to help save this industry. And it's also responsible for such amazing cultural impact and influence around the world. That has a lot of value too, in terms of our diplomacy, even our national security.

B (11:36)

And you have said that you want this to be bipartisan and that you are making these efforts, but you know, this is a state issue as well. The state incentives, while better than they used to be, are not competitive with many states. I talked to a producer just today who was saying it's unbelievable to him that it's cheaper to shoot an LA set movie in New York. Netflix, when they had the opportunity to build massive production hubs, they built them in New Mexico and New Jersey because of the efforts of the representatives in those states to make it attractive. What is going on in California that we can't get our act together to save this industry? There's incentives for all sorts of industries like green power and manufacturing and defense. Why can't we bring the California incentives up to be competitive, at least with these other states?

C (12:38)

Well, we've made a lot of progress in that respect. We have dramatically increased the cap on the California tax credit, but it needs to be more generous than that. And it's already early oversubscribed. And from my own point of view, we need to make sure that tax credit goes above the line as well. I think, I fear we're just not going to be competitive if we put limitations on how you can use the tax credit.

B (13:02)

Totally agree. I mean, the other jurisdictions do salary. We're talking above the line. You know, it's. It's salaries for director, writers, producers, actors. Those need to be applicable here. And for whatever reason. Why, why don't you think, is it still that they just don't want to be subsidizing Tom Cruise? Is that as simple as that?

C (13:22)

It is as simple as that. On that issue, it's as simple as that. On the broader issue, though, you know, I think, and I don't agree with this logic at all, but I think there are some in the state legislature who feel this is some kind of a giveaway to the entertainment industry, or it's the loss of tax revenues that could go into other laudable public purposes. The flaw with that logic is though, that without these tax credits, this business just leaves. That leaves us with less tax revenues. And moreover, and Noah Wiley was very effective on this point. When you do produce in LA, as the pit is filmed in LA, whatever amount of the tax credit is paid back 10 times. So it is cost effective. It's not as if it's a loss for the state, but nevertheless, those are some of the issues and obstacles you have to overcome. It's something we've been battling, frankly, for 30 years.

B (14:24)

Yeah. You would think now, given the state of LA and the fact that restaurants are suffering and small businesses are suffering and the city fund is suffering because of the flight of so many of these people, that it would catch the attention of lawmakers who have nothing to do with the entertainment industry. You would think so. But what are you doing to educate people on this? Not necessarily in California, but, you know, people were saying, great, they had this hearing in Burbank. It's like preaching to the choir. What are you doing on this issue to educate people in D.C. about this plight?

C (15:00)

A couple things. You know, first of all, we're doing all of the member education we can possibly do, and I'm doing a lot of that myself, Pinholing people on the Senate floor and previously on the House floor to make the case in a lot of the groups and caucuses that I am a part of, I point out the value, the importance of this industry. It's obviously even more helpful when other people from other parts of the country and the Republican Party join me in making that case. But one of the reasons that we did that hearing in Burbank is because another facet that will deeply impact the industry is that merger, that potential merger.

B (15:38)

Yeah, we'll talk about that.

C (15:39)

Yeah. So, you know, that, you know, was ground zero for the impacts of that merger. So we wanted to make sure that people in the area were aware and able to voice their opinions on what it would mean to the community and to their jobs.

D (15:55)

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A (17:25)

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C (17:59)

All aboard.

A (18:00)

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B (18:05)

Speaking of that merger, you're talking about the Paramount Warner Brothers merger, your new pen pal, David Ellison, who has exchanged some messages with you. He says, my promise to you is to build a stronger Hollywood by keeping both of these legacy studios operating separately, thereby prevent preserving and potentially increasing jobs. Do you believe that? And where are the specifics?

C (18:31)

I'm deeply skeptical, and every prior merger in the industry gives us grounds to be skeptical. Those promises of preserving jobs? Look, I'm glad I got an answer to the letter, but nevertheless, there's not much meat on the bones of that answer to give you an illustration.

B (18:49)

Well, especially when you look at the $80 billion in debt that he has to deal with and the fact that these studios have thousands and thousands of duplicative employees that would likely be the first to be cut in this reconciliation process.

C (19:06)

Well, that's absolutely right. I mean, we may end up with the worst of all worlds in this sense that there is more duplication between Paramount and Warner Brothers Discovery than there was between Netflix and Warner Brothers Discovery. So there's more overlap in what they do and how they do it, which means more potential for layoffs. But also because of the competition between those two merger proposals, Paramount had to make Skydance, Paramount had to make their deal much more lucrative, which means that in order to return to shareholders, they're now going to have to find even more billions of cost savings. And I just don't see how you do that without laying off a lot of people. And that's my paramount concern, so to speak.

B (19:53)

But what can you do about it? Short of Rob Bonta and getting, you know, his group of attorney generals together to soothe, to block it, what can you actually do?

C (20:04)

Well, you know, the state attorney generals are going to be hugely important. And, you know, in Congress, what we can do, and this was part of our having this hearing, is we can get out information, do the oversight, find out what commitments we can get from this, these merger participants about jobs, about editorial independence at places like cnn, cbs. Another grave concern about consumer prices because another big impact to this merger might be that your cost as a consumer of these streaming services just goes up and up and up.

B (20:38)

That seems like a good message federally, if you can get that on the agenda. I mean, we're looking at an election in November. Let's say the Democrats gain more power in Washington. I have heard that there's already a kind of backlog of talking points and agenda items that the Democrats are talking about. When and if the House switches over or even the Senate switches over. How do you get the, you know, the fact that we need to prevent the cost of streaming services from going up to be on that agenda? And how do we get a federal incentive to be on that agenda?

C (21:15)

Well, they both need to be on the agenda. There's no magic necessarily to the legislative process. It is often the squeaky wheel that gets the grease. And we've just got to continue to make the argument, make the case, bring it to the public attention, gather the bipartisan support that we need. And you know, right now, when the cost of living is such a key focus, letting people know that, hey, this merger may end up dramatically increasing the cost of what you watch on your TV or your phone, that's a powerful point to make. I'M not that optimistic, frankly, of our power to stop this.

B (21:54)

If I'm not either, I think, I think it's wishful thinking that, you know, all of a sudden there's going to be a state lawsuit and it's going to hold, hold everything up. Especially when Rob Bonta seems to be out there soliciting for money to back his case against this. I just don't think anything is going to stop it, especially with this administration prioritizing, getting it done.

C (22:16)

Well, I, you know, I don't think that the Justice Department is going to find this would be anti competitive, even though it very well may be hugely anti competitive. The Trump administration seems to have very heavily put their hand on the scale to favor this merger over the Netflix merger for reasons having to do mostly about the content of cnn. And on that point, I also want to emphasize that these studios, these companies, these media conglomerates need to understand that right now it may be carte blanche for them. Right now they may be able to have ABC make a payment to the President personally and CBS do the same or change their content. But there's going to be an investigation into all this when the Congress changes hands. And if there are improper considerations that went into greasing the skids on this, this is going to come to light.

B (23:12)

I mean, it's all, this is the joke of the Trump administration. It's all out in the open. There's no conspiracy. They know that to get their Paramount deal across the finish line, CBS had to pay them off.

C (23:25)

Well, that, that may very well make this merger subject to action by the Justice Department in the future. So I think that's a very important point to get across that there is going to be an accounting and companies need to know that if they're engaged in corrupt or illicit activity or in proper activity, that there's going to be an accountability. And so I think that's an important aspect of preserving our democracy that, you know, we're not just going to look past whether there was money changing hands to grease the skids here, that accountability is going to be really important.

B (24:07)

So I talk to a lot of people in the industry, Democrats mostly, and a lot of them have just kind of lost faith in the ability of the party. We're in California, one party state, we're in Los Angeles, a one party governance. They've kind of lost faith in the ability of the elected officials to help and to fix this problem. You haven't endorsed the LA mayor, Karen Bass in her reelection. Are you going to do that?

C (24:38)

You know, I don't want to get ahead of any announcement I might make in the LA mayors race. But, you know, let me just say this.

B (24:46)

A lot of people cite the local environment here. I mean, they just waived some fees at Griffith park and they're calling it a big, you know, plus for productions. And producers are like, okay, whatever. That doesn't change the fact that the regulations in the city and everything you have to deal with to shoot here and the cost of everything is just so much higher and it often doesn't make sense.

C (25:09)

I think that critique is applicable not just in la, but statewide. This has been a statewide problem that Democrats have to address. You know, look, I think a big part of what we need to do is simply get stuff done. That really ought to be our mantra. That was certainly my mantra in my Senate campaign is we need to get stuff done again in California. And I view my job, Frank, in Congress right now as a combination, a difficult balancing act between everything I can do to get stuff done and at the same time everything I could do to stop really harmful stuff from happening because of this administration. But we gotta be able to do both, and we gotta be able to film in Los Angeles and in California and do so affordably. We've gotta be able to get through the permitting process quickly. And the same is true about housing and the same is true about citing a manufacturing facility. We have to make it easy and doable and affordable to do business in California. That really has to be a laser like focus, not just for this industry, but for every other industry.

B (26:16)

I feel like Gavin Newsom was behind on this issue. He never really got it until there was a literal fire that destroyed communities that housed a lot of these people. And it was never a priority. Have you talked to any of the candidates that are running for governor about this issue?

C (26:35)

I have. Now.

B (26:37)

Can you give us a recommendation?

C (26:39)

I am supporting Eric Swalwell. I think he understands the need to both get things done as well as to protect the people of California from varying.

B (26:48)

But on this issue, have you talked to him about this specific issue and making it a priority?

C (26:53)

Well, I have talked to him about a whole variety of issues. I don't know whether we've had a very specific conversation on film tax credits and production, but you can better believe that if he's successful, we're going to have that conversation. But more generally, I have talked to Eric about the necessity of getting things done in California. That has to be really priority number one. I think he understands that. And this is a important critique of Democratic Governance. I think the difficulties grew up for understandable reasons. We want to protect the quality of life we have. We want to protect all that we've been able to achieve. But at the same time, you can get to a point where it's paralysis, and that doesn't do anybody any good. And I think the party gets that now. And it's part of the focus that we have on affordability, that we're really ready to make the difficult decisions in order to speed up, lower the costs of doing business again in California and America.

B (28:01)

Okay, there's a lot of Democrats running for governor. Would you now please urge some of them to drop out of the race? Can you please urge them, the ones who do not have 7 or 8%, to get out of the race? It's kind of scary. It looks like it could deliver two Republican candidates at this point.

C (28:17)

It could. And the jungle primary is a terrible system for that reason. It has a lot of.

B (28:22)

Urge them right now. You can make some news. Urge them to get out of the race if they don't have 8%.

C (28:27)

Well, I do think that if, you know, we get to the point a month from now where the polling is still the same, where you have a very real possibility of Democrats not having a choice in November because they divided the vote, that we're going to need to get the Democratic stakeholders together and decide we got to coalesce around one or two people. You know, we don't have to call on people to drop out. They'll make that decision on their own. We don't have the ability to tell them to do that. But we can make a decision collectively that we're going to get behind one or two people and make sure that we have at least one Democrat on the ballot in November.

B (29:03)

If one of these Republican candidates started talking about specific ideas to bring productions back to Los Angeles county and to the state, I think people in Hollywood would get behind that, even given that they don't agree with any of the other aspects of their politics. It's gotten so bad that people are just looking for some kind of answer. You know, we will eliminate all the red tape. We will eliminate all of the taxes. Everything that you do not like about shooting in Los Angeles, we will eliminate. Vote for Me Republican. I think it would work.

C (29:38)

Well, I don't know. Some of these Republican candidates are very extreme.

B (29:42)

That's true.

C (29:43)

Well, and, you know, they're also seizing

B (29:45)

ballots and things like that.

C (29:47)

A lot of Democratic voters, a lot of industry people, are even more concerned about shooting of a different kind in our streets as we saw in Minneapolis.

B (29:55)

I get it.

C (29:56)

But I hear, you know, it's a powerful message for a really important industry and I would love to see all the governor, the gubernatorial candidates talking about it.

B (30:07)

Okay, so last question. Are you personally afraid for the future of this business, of the entertainment business in California? Do you think that we have reached a tipping point where not just the productions will go elsewhere, but the entire infrastructure of the industry? Are we looking at Detroit in the 1980s?

C (30:31)

Right now I don't think we're looking at Detroit. We're more resilient economy than that. We have more going for us, I think, than Detroit did. We're not as singularly reliant on one thing as Detroit was. But I do think we're at a tipping point and maybe even past a tipping point given how much of this industry has already left. I mean, the numbers year out, year over year of the loss of this industry are just staggering. So this is overdue for a dramatic response. And I'm going to be doing everything I can to make sure we get that response. We save and protect and cultivate this industry that has produced such wonderful iconic memories for all of us, but also, most importantly, provided such a great livelihood for people. It should be a no brainer and I'm gonna make sure that we get it done.

B (31:26)

I agree with you. I think people are skeptical. I think that the industry has been so battered and they've seen have so many setbacks that people are just like, it's not gonna happen. There's gonna be something. It's gonna get backburnered or Trump's gonna tweet something. It'll kill the whole thing. It's just, I gotta tell you, people are skeptical.

C (31:46)

Yeah, no, look, the skepticism has been well placed for years. But there's nothing better in my line of work, nothing more enjoyable, frankly, in my line of work than upsetting people's expectations in a positive way. So I hope that's exactly what we do.

B (32:01)

All right, well, I appreciate you coming on the town and good luck to you in this effort. I think it's really important.

C (32:06)

Thanks. Thanks for having me on.

B (32:09)

Today's call sheet is brought to you by amc. The critically acclaimed crime drama series Dark Winds returns for a fourth season from executive producers Robert Redford and George R.R. martin. When a young girl disappears, the Navajo tribal police are pushed beyond their limits. Watch Dark winds Sundays at 9pm on AMC or stream anytime on AMC Plus. All right, Craig, we are here with the call sheet and I got to get Your take on the Oscars moving from the Dolby Theater in Hollywood to LA Live, the currently titled Peacock Theater downtown starting in 2029.

E (32:46)

I don't know if this is a hot take, but I think kind of in a stereotypical, traditional sense, I like that the Oscars are in Hollywood and it feels more glamorous to be in Hollywood than in downtown L. A Even

B (32:56)

though Hollywood Boulevard itself is not very glamorous. And the Oscars currently take place in a mall where they use an elaborate system of drapes to cover up the Hard Rock Cafe and the Lids and the Dave and Busters and all of it.

E (33:11)

That is all better to me than being at LA Live, but. And you're closer to West Hollywood. You're closer to the better restaurants, the bars and the after party scene. To me it makes a little bit more sense. Also, correct me if I'm wrong, wasn't the Dolby built to host the Oscars?

B (33:25)

Oh, it was. Yes, it was. And I remember, I'm old enough to remember when they first moved in there in 2002. It was a very big deal. The Oscars are coming home to Hollywood. They have this amazing theater that was built specifically for the show. They don't really use it for much else during the rest of the year. I think they had planned to do more with it, but now they're moving into a venue that's hosted the freaking Espies and the Emmys and all of these like, lesser shows. It's a bigger venue, it's more commercial. It's like a concert venue. It's got like a concession stand on every level. It's just, it's not very cool. Not that the Dolby was that cool, but. But it felt like it was unique within the award show ecosystem that this is where the Oscars were.

E (34:12)

Why did this happen?

B (34:13)

I think money. I think aeg, which owns the venue, gave them a great deal. They put in their press release or not? Not in the press release, but the message to members that I got forwarded to me, of course what they put in there, that they're going to have more opportunities to monetize the show via this venue. Whether it's they're splitting in, you know, branding opportunities outside the venue or they're going to get other sponsors. You know, the Peacock Theater name will likely change. They're going to be able to upsell the naming rights.

E (34:42)

So now it's going to be The Oscars on YouTube brought to you by Beast Games or something.

B (34:46)

Probably something a little classier than that. Maybe something. It might even be Dolby. They might just take the Dolby name from the old venue. I know I joked in my newsletter that it's to be called the Netflix to Doom theater or something like that, but I, they'll probably, they probably won't do that. I don't know how I feel. I mean, my prediction here is I think people around town will ultimately be fine with this. They are going to dress it up and make it nice and make it look a little bit more intimate. It's a 7,000 person venue right now. They say they're going to keep it under 5,000 to kind of make it look and feel like an exclusive venue.

E (35:24)

Because the Oscars currently right now with the Dolby's what, around 3,000, 3,300.

B (35:29)

Yeah. And they, because they've ballooned the size of the Academy, it's now 11,000 members. They do a lottery every year for tickets among members and most people don't get them. I've heard stories of filmmakers or not filmmakers, but people associated with nominated films not being given a ticket.

E (35:48)

So in that regard it's better that more people associated with the nominated films

D (35:51)

will get to attend.

B (35:51)

Yes. And they'll be able to sell more tickets and make more money that way as well. The Governor's Ball and the Governor's Awards are likely going to be at the Marriott, the JW Marriott next door, which has a very nice venue, but again, pretty generic like the current venue was built for the Governor's Ball.

E (36:08)

You could just go right up the stairs inside the venue.

B (36:12)

Exactly. And it's all self contained. Even though you do have to stare at a Dave and Buster's, you know that you're going into a nice venue and at this mall you're going to at least have to walk out and maybe you'll check out the Yard house or the Katsuya. Oh, it's all so pathetic. All right. Today's call. She was brought to you by AMC. Plus backed by a 100% rating on rotten Tomatoes, the crime drama series Dark Winds returns. Watch Dark Winds Season 4 Sundays at 9pm on AMC or stream anytime on on AMC. That's the show for today. I want to thank my guest editor, Adam Schiff, producer Craig Horobeck Arter, Jon Jones and I want to thank you. We will see you next week.

F (36:55)

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G (37:25)

Quick break. This surprised me. The most useful advice I get now doesn't come from experts. It comes from regular people on TikTok. What works, what doesn't. No filters. Download TikTok and see for yourself.