Hollywood has long looked overseas to make movies

LOS ANGELES (Hollywood Reporter) - Kirk Douglas knows all about “runaway production” to foreign locales.

Actor Kirk Douglas arrives for the American Film Institute's 40th anniversary event featuring screenings of classic films in Hollywood, California, October 3, 2007. Douglas introduced his 1960 film "Spartacus". REUTERS/Fred Prouser

Sitting on a striped couch in the living room of his Beverly Hills home, surrounded by paintings by Balthus, Vuillard and other modernist masters, the screen legend can still feel the sting of betrayal 50 years later.

After an arduous day of shooting boat-rowing scenes for “The Vikings” (1958) in Norway, Douglas decided to reward the locals who served as oarsmen with a party featuring a burlesque show, starring himself and castmates Tony Curtis and Janet Leigh.

The extras ate the food, drank the booze, laughed, applauded and yelled for more.

“And the next day, they went on strike,” says Douglas, who made the film through his production company, Bryna Prods., and starred in the production. He’s laughing now, but he wasn’t then. “I was very mad. I called my troops together and I said, ‘Tell me. What are the shots we still have to do?’ I figured out we could do them (on a soundstage) in Munich. So I said, ‘Pack up. We’re going,’ and I left.”

Douglas was far from the only star eschewing the comforts of Hollywood to shoot in far-off lands in the 1950s. In September 1956, the New York Times reported that dozens of Hollywood soundstages were dark while 18 of the 39 films in production shot overseas in Europe, Japan and Cuba, and another four shot in other U.S. states.

One of 1956’s celluloid expats was “The Mountain,” starring Spencer Tracy, shot in Chamonix on France’s Mont-Blanc. Unlike most of today’s runaway productions, it didn’t leave town in search of a deal, according to A.C. Lyles, one of the film’s producers.

“We went there for creative enhancement,” says Lyles, a fixture at Paramount since 1928. “Chamonix is such a well-known ski resort and Mont-Blanc is very unique. It was the ideal place to shoot the film.”

But whether productions left Hollywood for creative or economic reasons, the difficulties they often encountered -- language barriers, cultural divides, varying regulations and fees, inadequate facilities and services, and inexperienced (or uncooperative) crews -- were much the same as they are today, as was the controversy.

In 1952, the Hollywood Film Council of the American Federation of Labor launched a campaign to put a stop to runaway production. The committee’s chairman, Dolph Thomas, told the New York Times that the organization had no objection to producers shooting abroad to capture authentic backgrounds, “but we will try to stop the growing tendency here among Hollywood producers, especially in television, to do their shooting in foreign countries principally to cut costs. Hollywood employment already has been considerably decreased by these activities.”

Seven years later, labor unions were still campaigning against runaway production, claiming that 35%-50% of features made by American producers were being shot abroad.

The response from producers was virtually identical to the one heard today: “The choice is simple. Either you make these spectacle pictures abroad or you don’t make them at all,” Ted Richmond, producer of 1959’s “Solomon and Sheba,” which shot in Spain, told the New York Times in 1959, citing the prohibitive cost of shooting in Hollywood.

The protests did nothing to halt the exodus.

“It continued with a vengeance from 1963 to 1973,” says USC film professor Drew Casper, author of “Postwar Hollywood: 1946-1962.” “It (went) into overdrive.”

But a funny thing happened on the way to Tinseltown’s doomsday: It never came. The studio system unraveled, but the local production economy continued to thrive. According to a 2001 study by Allen J. Scott of UCLA’s Center for Globalization and Policy Research, between 1980 and 1997 motion picture production and service activities in Los Angeles County grew at a rate of 194% for employment and 248% for businesses.

However, in recent years there has been a loud chorus of complaints that Hollywood’s infrastructure is slowly being eroded by the rash of productions leaving for incentive-rich countries like Canada, Australia and New Zealand, as well as former Soviet satellites such as the Czech Republic, Hungary, Romania and Bulgaria, where costs are lower. According to the nonprofit FilmL.A., the number of film production shooting days in Los Angeles has decreased nearly 40% from 1997-2007.

Is the sky really going to fall on Hollywood this time?

“It won’t,” says director Richard Donner, whose resume includes 1978’s “Superman” and the “Lethal Weapon” series. “It’ll go and come and go and come and build and fall. It’s been that way forever.”

But it’s not simply a case of “the more things change, the more they stay the same.” In recent years, many of the U.S. states that saw their film and TV business flee to Canada in the 1990s have created their own aggressive incentives, starting with Louisiana and New Mexico in 2002. That, combined with the weakening of the American dollar in recent years, has created a boom in domestic production.

“Canada is worried about runaway production more than America,” Donner says, laughing. “We’re budgeting my new film now for New Mexico, which gives 25% back on your money.” Donner declined to divulge the project’s title.

Just as Canada did in the 1990s, states like New Mexico, Louisiana, North Carolina and Pennsylvania are quickly building soundstages, and amassing support services and experienced personnel, ensuring that visiting productions will get not just a bargain, but also a consistently high level of professionalism -- and no mutinous oarsmen.

And they’re not just attracting Hollywood projects.

“We’re starting to see, slowly, reverse runaway production, where foreign productions are coming to the U.S.,” says Joseph D. Chianese, vp business development for Entertainment Partners, a leading provider of payroll and production management services. “And I think as producers are successful, it’s going to increase. If you’re getting twice as much here than you could get in your local country (because of the favorable exchange rate), then on top of that an incentive, the financial model makes sense.”

This year, two major Bollywood productions -- a thriller tentatively titled “New York,” starring Neil Nitin Mukesh, and Dharma Prods.’ “My Name Is Khan” -- are forsaking the cheap labor of their native India to shoot in Pennsylvania, where filmmakers can take advantage of the state’s 25% tax credit.

In Michigan, which enacted a 40%-42% incentive earlier this year, they’re getting inquiries from countries that have been on the receiving end of runaway production in recent years, such as Romania, Russia and the Czech Republic.

“They have been told by their finance companies to look at Michigan, if they can fit the film here based on the locations,” says Anthony Wenson, COO of the Michigan Film Office. “It’s a huge turnaround. In fact, I was on the phone this morning with a producer who’s looking to recreate the streets of Kiev here in Michigan.”

But for those eager and determined to live and work in Hollywood, news of other states’ good fortune offers little consolation.

“At least these jobs are staying in the U.S. and they’re not going to Canada or to another foreign country,” says Steve Dayan, business agent for Teamsters Local 399, which represents many of Hollywood’s below-the-line workers. “A few of my members are getting to work on these productions. That’s about the only bright side.”

If it’s any consolation to Dayan, the Los Angeles locals are still number one in Douglas’ book.

“My recollection is that no crew was as good as a Hollywood crew, no matter where they were,” says Douglas. “There’s no argument that it’s much easier to shoot a movie here.”

Reuters/Hollywood Reporter