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Hollywood’s Shifting Standards in a Crisis - Studios Now Asking for Corporate Welfare

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AP Photo/Reed Saxon, File

The pandemic that has ground the country and our economy to a near standstill has of course had a serious effect on the movie industry. Everything from theater closings and productions forced to halt has had a severe impact on the entertainment complex. As a nation we’ve also had to endure those out-of-work performers creating PSA videos like the ‘’Imagine’’ montage that compounded our suffering. Now studios are turning to the government for significant financial assistance, conflicting with prior positions they backed. 


In the years I have been covering the business side of Hollywood’s show it has become apparent entertainment does not always adhere to the economic principles driving other industries. Films that cost tens of millions to produce may never get released, or instead of making a better film a company will instead spend three times the budget on advertising. Not many industries can have a product like ‘’Justice League’’ earning $750 million in revenue and it still loses a fortune for the studio.

Another thing you occasionally see Hollywood not following? Its own advice. Most people are aware that the entertainment complex is almost entirely run by liberals, and many of the power brokers are ardent supporters of Democrat candidates. But what gets interesting is, when the business practices conflict with the politics, you frequently see the companies taking action that contradicts the policies they had supported in campaigns. When those policies are in play you see them voting with their wallets.

Long before his sex scandal I had covered the management actions of Harvey Weinstein. At one stage he had gone to the state capital of California to see what could be done to bring back film productions which had been fleeing the state for economically friendlier locations like Canada and Georgia. He was asking for the government to grant studios tax breaks, and to get some relief from the local unions, so it would be more cost-friendly to film in California again. Here was Weinstein, a longtime bundler for Democrats, working against unions and calling for lower taxes.


In similar fashion, following the reelection of Barack Obama, he paid a visit to Dreamworks Animation studios. One executive there, Jeffery Katzenberg, was a major donor to the Obama campaign and he was being rewarded with a visit after the victory. You may remember in that contest against Mitt Romney, Obama accused his opponent repeatedly of shipping American jobs overseas, making outsourcing a major campaign issue. After his speech at Dreamworks, where the president raved about the strength of the animation industry, weeks later Dreamworks closed some of its offices and laid off hundreds of workers. It was outsourcing its animation work to Asia and Canada.

Now today in this pandemic era we see studios in Hollywood lobbying for government assistance in a fashion they, as political liberals, have frequently demonized. A coalition of studios, distributors, agents, and others in the industry have come together to approach the government about backing their industry as a result of the impacts of the viral outbreak. Major names such as Steven Spielberg’s Amblin Entertainment, along with others like A24, Skydance Media, Village Roadshow, Dick Clark Productions, and Valance Media (publisher of The Hollywood Reporter) are all part of the large group of Hollywood players. Their intention is couched thusly:


“A group of 25 independent production companies, distributors, sales agents and completion guarantors...have formed the American Coalition for Independent Content Production, which is calling on the government to provide support amid COVID-19. This includes asking for liability protection for resuming production, assistance that will support business continuity when projects are suspended or abandoned, grants and long-term low interest loans, and relief through federal tax incentives.

Calling on the government to offer tax breaks is frequently referred to in another description: corporate welfare. That is the very type of business practice derided by Democrat politicians, and the same type of policy that these Hollywood players support with their donations almost exclusively to that party. The contradictions hardly end there.

Look to Governor Newsom in California, the type of liberal politician they favor. He has been the type to keep the clamp on things and not open up the state or the economy. Now as a result of the frozen productions, studios and others are turning to the Feds for financial support to shield them from the policy that their politicians have instituted and is affecting them. 

Democrats are shackling the entertainment industry and this translates to their money backers in Hollywood suddenly having a change of heart regarding corporate welfare. Hardly a surprising result from the industry that constantly backs the candidates calling for higher taxes only to then run to tax havens like Canada and Georgia to save money on their film projects. They fail to admit there is a difference between political policy and economic realities.


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