So ... Smaller Tax Incentive?

California's movie/tv tax credit. Not the $400 million originally envisioned.

Last-minute negotiations between legislators and Gov. Jerry Brown likely to lead to an amount above the current $100 million in tax credits ...

The $400 million allocated in the bill that passed the state Senate is not going to hold, but otherwise the legislation as amended is acceptable to all sides, according to an informed source who spoke Tuesday on background. ...

Both sides hope to have the “the number” wrapped up by Friday; but the final re-votes, which will be necessary by both the state Assembly and Senate (because amendments were added), can take place as late as Aug. 31. ...

The Entertainment Union Coalition has been pushing for $400 mill (or more) for months. Far back, one of the wise old union reps said:

"When this wraps up, the bill's going to be Two hundred, maybe three hundred million dollars. No way is it going to end up at $400 million."

Governor Brown is a tight-fisted guy. And he plays his guards close to his vest. I think, in the back of my brain pan, I thought it was going to end up less than four-tenths of a billion, but I had hopes it would come close to that.

Governor Brown, apparently, was never going to let that happen.

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Google VFX

Web search is only part of it.

Google has acquired Zync, a firm that enables complex visual effects sequences to be rendered over the cloud. ...

Zync Render, which was developed with visual effects studio Zero VFX, has been used to produce over a dozen films like “Star Trek Into Darkness,” “American Hustle” and “Looper,” and hundreds of commercials, totaling over 6.5 million core hours completed.

Until now, Zync, founded in 2011, has promoted Amazon’s Elastic Computer Cloud hosting platform, saying on its website that EC2 “is the only public-cloud that meets or exceeds MPAA security requirements with a Best Practices rating award.” ...

Chances are Zync won't be using Amazon's cloud much longer.

It's hard to know what Google plans to do with its new purchase. Exploit the software? Get deeper into movie production and make its own content? I think Silicon Valley companies aren't keen on letting entertainment conglomerates like News Corp., Disney and Time-Warner control the playing field.

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Hasbro Chief

The toy company has a new movie top-kick.

Josh Feldman, formerly of Genre Films, has joined the entertainment division of Hasbro Studios in a newly-created position of head of development. The move comes off the crazy success of Transformers: Age of Extinction and as the entertainment division of Hasbro continues to strengthen its brand as a force to be reckoned with. It’s currently in development on a number of properties based on their toy and game line (all of which it will also produce) — Transformers Universe and G.I. Joe 3 at Paramount, Candy Land at Sony, and both Ouija and Jem and the Holograms at Universal Pictures. ...

Feldman will be responsible for overseeing the film division for Hasbro Studios and work on both live-action and animated properties to be developed into film. He’ll also work closely with the TV development team. He started last week, reporting to Stephen Davis, president of Hasbro Studios and Global Entertainment and Licensing for the parent, Hasbro, Inc. ...

Interestingly, both Marvel and Hasbro have small animation studios turning out animated versions of some of their live-action hits.

Hasbro aspires to replicate the Marvel track record. Mr. Feldman looks to be the man the company intends to make those hopes and dreams reality.

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Uptick

The financial press's old meme has now changed.

... •After several flops at the box office, the company is doing well with 'How to Train Your Dragon 2'. ...

Say what? Whatever happened to "Ooh, the picture didn't open too good", and then DWA stock went down. ...

Me, I always thought that the HTTYD2 would take in something around $200 million domestically (is $172.2 million close enough to count?) and a whole lot more overseas.

And what do you know? The movie is closing in on $600 million, so I guess it's not a flop and disappointment after all Click here to read entire post

Index Investing Advantages

From the Washington Post:

Imagine the following: You, the investor, believe you have an uncanny skill at picking stocks. You set up an online trading account and begin to buy and sell.

As it turns out, you are quite good. You pour more money into your brokerage account and up your trading. After the first year, you look at your results: You have trounced the indexes. You snicker at your friends who invest passively in low-cost, low-turnover indexes. ...

Over 24 years, you tally up gains and losses. The markets are up, on average, about 9.3 percent annually. You, the World’s Greatest Trader, do much better — 40 percent better. That’s better than most of today’s hedge funds. It is certainly better than most average mom-and-pop investors.

How did you do vs. your friends the passive indexers?

About the same.

Wait, how on Earth is that possible? ... In a word, taxes. Traders pay a healthy tax of 30 percent or more on short-term capital gains. Effectively, you lose the benefits of compounding on one-third of those gains. Over time, this has a tremendous impact on your net returns. ...

The silly little secret of investing is, simpler is better. Drop your money into a Total U.S. Stock Market fund, a Total International fund, and a broad-based bond fund.

Then, don't move anything, don't sell your holdings, just let them percolate over long stretches of time.

Eighteen years ago, the wife and I put $9,000 into Vanguard's Total Stock Market fund for the six-year-old. Eighteen years later, after burst stock bubbles and a major recession, the 9 grand is up around $33,000, give or take. The secret is, we've never touched the money, and seldom even looked at the performance of the fund. (Which helps us to not touch the money.)

There is something to be said to 1) Low costs, and 2) Letting everything ride. Most investors' biggest hurdle is panic selling.

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Your International Box Office

World totals for animation.

Weekend Foreign Box Office -- (Global Cumes)

How to Train Your Dragon 2 -- $18,200,000 -- ($574,516,962)

Guardians of the Galaxy -- $20,700,000 -- ($489,484,857)

Teenage Mutant Ninja Turtles -- $15,500,000 -- ($238,809,806)

Dawn of Apes -- $8,500,000 -- ($556,960,970)

Transformers: Extinct -- $5,400,000 -- ($1,065,124,603)

Other animated titles still in release:

* The Lego Movie has grand total of $468,049,270 worldwide. What makes the title kind of unique is that over 55% of its earnings come from the domestic run. (Usually a majority of the cash is from overseas.)

* Mr. Peabody and Sherman ended up at $268,759,499. That made it a write-off for DreamWorks; 58% of the take came from abroad.

* The weakly-performing Planes 2 has earned a grand total of $94,378,000; like the higher-flying Lego Movie the majority of its earnings come from the domestic release.

(You will note that, for a movie labeled a "disappointment", Dragons 2 has made a poop-load of money.)

Add On: Another semi-animated title has passed a milestone:

... Maleficent, also made news as it passed up X-Men: Days of Future Past ($744.7 million) to become the No. 2 title of the year so far at the global box office. The live-action fairy tale, starring Angelina Jolie, finished the weekend with $747.6 million in total worldwide ticket sales. ...

One more Linda Woolverton blockbuster.
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Encouraging

The Yellow Family still has it.

FXX scored solid ratings in primetime Thursday with its “The Simpsons” marathon, more than tripling the network’s usual audience and contributing to the nascent channel’s most-watched day ever.

According to Nielsen estimates, the six half-hours of “The Simpsons” averaged a 0.49 rating in adults 18-49 and 1.01 million viewers overall. The demo score was good enough for a fifth-place primetime finish for FXX — ahead of parent network FX as well as cable biggies including TNT and USA. ...

On a total-day basis, Thursday crushed FXX records, soaring 618% above its prior average in adults 18-49 (402,000 vs. 56,000) and 524% higher in total viewers (624,000 vs. 100,000).

All 552 “Simpsons” episodes will be airing in chronological order on FXX, which started the marathon earlier Thursday with the pilot episode from December 1989. ...

Congratulations to the hard-working crew over at Film Roman who helped Fox/News Corp. to earn even more money from its 12 billion dollar franchise. They might be getting a slice of the layer cake for their efforts, but at least they have bragging rights.

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The Weekend of Box Office

It appears that (halfway) animated features are back at the top of the list.

Your American Box Office

1). Guardians of the Galaxy (DIS), 3,371 theaters (-326) / $4.7M to $4.9M Fri. / 3-day cume: $17.2M to $17.6M / Total cume: $252M / Wk 4

2/3). Teenage Mutant Ninja Turtles (PAR), 3,864 theaters (-116) / $4.3M to $4.5M Friday / 3-day est. cume: $15.2M to $16.2M / Total est. cume: $145M / Wk 3

If I Stay (WB), 2,907 theaters / $6.3M to $6.7M Fri. / 3-day cume: $15.5M to $16.5M / Wk 1

4/5). Let’s Be Cops (FOX), 3,140 theaters (+46) / $3.1M Fri. / 3-day cume: $9.7M to $10.3M (-45%) / Total cume: $44M / Wk 2

4/5). When the Game Stands Tall (SONY), 2,673 theaters / $2.8M to $3.1M Fri. / 3-day cume: $8M to $10M / Wk 1

6). Frank Miller’s Sin City: A Dame to Kill For (TWC), 2,894 theaters / $2.6M Fri. / $6M to $7M / Wk 1

7). The Giver (TWC), 3,003 theaters (0) / $2M Fri. / 3-day cume: $6M (-48%) / Total cume: $23.8M / Wk 2

8). The Expendables 3 (LGF), 3,221 theaters (0) / $1.8M to $2M Fri. / 3-day cume: $5.6M to $5.9M (-66%) / Total cume: $26M to $27M / Wk 2

9). The Hundred-Foot Journey (DIS), 1,944 theaters (-99) / $1.5M to $1.7M Fri. / 3-day cume: $5.5M to $6M (-23%) / Total cume: $32.7M / Wk 3

10). Into The Storm (WB), 2,375 theaters (-1,059) / $1.1M Fri. / 3-day cume: $4M+ / Total cume: $38.6M / Wk 3 ...

On the fully-animated side:

Planes 2 remains in 900+ theaters and has taken in $56.5 million.

How to Train Your Dragon 2 has collected $171.6 million as it hangs on to 300+ theaters in various sections of the country.

Rio 2 flutters along in just over a hundred theaters with a total of $131,454,258.

And The Lego Movie (remember that one?) is still in fifteen theaters with an accumulation of $257,749,270.

The animation, it plays and plays and plays.

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Twenty Years Ago This Day ...

Jeffrey Katzenberg announced he was leaving Disney.

Walt Disney Co. shocked Hollywood and Wall Street on Wednesday by announcing that veteran studio chief Jeffrey Katzenberg will leave the company next month after losing a highly publicized campaign to be named second in command to Chairman Michael D. Eisner.

Katzenberg--who helped engineer the company's staggering success with animated movies such as "The Lion King" and new ventures such as the Broadway adaptation of "Beauty and the Beast"--was rebuffed by both Eisner and Disney's board of directors on grounds that he was not right for the No. 2 job.

Eisner delivered the news late Wednesday morning. "The job that (Katzenberg) would have wanted does not exist in this company," Eisner said. "We're going to strengthen the company through the divisions."

Katzenberg's departure leaves Burbank-based Disney without one of its chief creative forces. In 10 years he helped build the studio into a perennial box office leader, and encouraged its growth into the lucrative TV production market and other areas. Operating income for filmed entertainment rose steadily under Katzenberg's regime, from $2.2 million in 1984 to $622.2 million in 1993. ...

This wasn't a big surprise to anybody.

It had been an open secret that Katzenberg and Eisner weren't getting along. Jeffrey wanted the late Frank Wells' old job, and Michael said "no" (with Roy Disney's concurrence). Jeffrey felt he had been stabbed in the back, but out he went, straight into the warm embrace of Steven Spielberg and David Geffen ... and the new studio named DreamWorks was born.

Jeffrey stayed on at the House of Mouse for another month after the announcement. Michael apparently wanted Jeffrey to finish out his contract; one of the lead directors on The Hunchback of Notre Dame told me at the time that Eisner insisted on coming along with Jeffrey to a storyboard pitch at the Flower Street animation studio, and that Jeffrey's body language told the sour tale that it wasn't his idea for Michael to be there. Sitting next to Eisner, Katzenberg was hunched down, as far away from the tall CEO as he could get, as the story artists went through the boards. For the first time in anyone's memory, Jeffrey had nothing to say.

(Shortly after, there were a lot of gag drawings speculating about Katzenberg's next occupation decorating the walls at Feature Animation: Jeffrey as real estate agent, Jeffrey as over-bearing car mechanic, etc. etc.)

Interesting times.

But here we are, two decades further on, with Michael Eisner retired from Disney and running his company Tornante, and Jeffrey the CEO of DreamWorks Animation, the friend of Presidents and worth almost as much (if "Celebrity Net Worth" can be believed) as the man who pushed him off the main deck of the S.S. Mouse.

Time, it does have a way of flowing on.

(H/t to TAG President Emeritus Tom Sito).

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SAG-AFTRA Ratification

A lopsided result.

The rank and file [of the the newly-combined Screen Actors Guild and AFTRA] has voted overwhelmingly to approve the new, three-year contracts covering movie, primetime and basic cable TV production. The balloting was a lopsided 92%-8%. The deal with the Alliance of Motion Picture and Television Producers was hammered out in the wee hours of the Fourth of July after two months of tough bargaining amid a media blackout and three 24-hour extensions after the June 30 deadline. The national board approved it eight days later. ...

The new contracts — which take effect retroactive to July 1 and run through June 30, 2017 — include:

· Gains of $200 million in wages;
· An 8.5-percent wage increase compounding to 8.7 percent; 2.5 percent in the first year, 3 percent in the second year and 3 percent in the third year;
· Advances in Subscription Video on Demand (SVOD) coverage, including a brand-new residual for on-demand viewing;
· Reduction of unpaid online streaming windows for most shows; and
· An increased contribution rate percentage to our benefits plans and a mechanism to facilitate the merger of the health plans.

The IATSE -- our mother international -- will negotiate its own there-year contract next Spring. TAG will plunge in soon after. Both of the deals will likely be similar to what SAG-AFTRA, WGA, and DGA have negotiated.

It's called pattern bargaining.

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The TAG Wage Survey -- Preliminary Numbers

We're most of the way done crunching data on the Animation Guild's wage survey. Here's a first look at selected stats. (Please note that these include both union and non-union rates being paid this year):

Wages -- 2014

STAFF TV WRITERS

min: $1065.74
Median: $1984.38
Max: $3000.00

2013 median: $2202.50
Change: + $88.23


TV DIRECTORS

min: $1406.25
median: $2475.00
max: $4600.00

2013 median: $2500.00
change: -$25.00

STAFF PRODUCTION BOARD (t.v.)

min: $1000.00
median: $2000.00
max: $3307.50

2013 median: $2000.00
Change: $0.00

BACKGROUND LAYOUT/DESIGN

min: $1175.00
median: $1909.40
max: $5250.00

2013 median: $1943.20
change: -$33.80


LIGHTING

min: $1166.00
median: $1769.21
max: $2600.00

2013 median: $1913.16
change: -$143.95


3D ANIMATOR

min: $1200.00
median: $1967.58
max: $3100.00

2013 median: 1911.77
change: +$55.81 ...

A few more factoids for your perusing pleasure:

We had a return rate of 33% of wage survey forms, which is way above last year's returns, and the highest since the 1990s.

5.6% of the wage surveys came from members working at non-union studios.

25% of surveys came from three Disney divisions. (We got one form back from Pixar.)

20% of survey forms came from DreamWorks Animation's two divisions.

There were a number of entry level lighters who came into employment, which drove down the median lighting wage.

We'll have a more extensive breakdown when we've finished all the data mining. In the meantime, enjoy this first pass.

(Here's last year's complete survey. Kudos to Steve Kaplan, who took over the wage survey work from retired staffer Jeff Massie.)


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The Yellow Family's Deluge of Green

From this date:

Starting Thursday, Aug. 21, you can watch every episode of The Simpsons in back-to-back order on the FXX network for 12 straight days.

If you actually need to do things like show up for work or sleep, you can see select episodes of last season on Hulu and Fox; seasons one through three, and 20 through 25 on Amazon Instant Video and iTunes; seasons two, three, 20,and 22 through 25 on Vudu; seasons one through sixteen, and 20 on DVD; and seasons 13 through 16 and 20 on Blu-Ray.

In other words, the FXX binge is the only place to see them all. In October, however, Fox will launch Simpsons World, a comprehensive on-demand portal to every Simpsons episode. ...

When I go through Film Roman, staffers on the show often speculate how many seasons of new episodes we'll actually see. I always say:

"The show has been a cash cow for Fox and Gracie Films for decades. They'll go at least thirty seasons. They'd be fools not to."

So what kind of cash has the YF raked in to date?

Advertising revenue from The Simpsons primetime airings $5.35 Billion
The Simpsons Movie Ticket Sales $527 Million
The Simpsons Movie DVD Sales $96.4 Million
The Simpsons TV-DVD Sales $894.25 Million
The Simpsons Merchandise & Toy Sales $4.6 Billion
The Simpsons TV syndication revenue $1.1 Billion

Total Simpsons Franchise Revenue $12.33 Billion

The deal with FXX, per Bloomberg, kicks in another billion worth of long, paying out a million $ per episode over eight years.

The animation crew in Burbank will get a very small slice of revenue, but this is kind of a tradition. Thirty years ago, an old Disney hand told me at a Golden Awards banquet:

"The cartoon business is the one biz where employees work fifty years. Or need to."



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New Release Dates

The never-ending jockeying for pole position.

Today, DreamWorks Animation announced that their sequels The Croods 2 and Puss in Boots 2: Nine Lives & 40 Thieves, which were scheduled for early November in 2017 and 2018 respectively will now be released the weekend before Christmas.

The Croods 2 will now arrive December 22, 2017 while Puss in Boots 2 will come out a year later on December 21, 2018.

The idea seems to be to get further away from the DC and Marvel Super Hero movies and rival Illumination Entertainment's How the Grinch Stole Christmas. No doubt there will be other shifts between now and 2018. Click here to read entire post

The Rally

This occupied most of the day.

... The below-the-line community joined with Ron Perlman, Carl Weathers and Daniel Stern in Sacramento at the state capitol Wednesday in support of a sweetened incentive program for movies and TV shot in California. ...

The legislation [AB 1839] is heading to the Senate floor after clearing the Appropriations Committee last week. The bill will quadruple the size of the tax credit program, to $400 million per year from the current $100 million annual allocation. ...

The bill has to be voted on by the Senate no later than a week from Friday. Then the Assembly concurs with any tweaks from the Senate, and the bill rolls on to Governor Brown, who either signs the legislation or doesn't.

There are some folks in high positions urging the governor to sign it.

Rep. Judy Chu (D-Calif.) and 34 other members of California’s congressional delegation are urging Gov. Jerry Brown to sign legislation that would expand the state’s film and TV incentive program to $400 million in tax credits per year.

The lawmakers who signed the letter to Brown include 34 Democrats and one Republican, Rep. Paul Cook (R-Calif.), whose district covers the desert regions in the eastern part of the state. ...

For those not up to full speed on this, the legislation quadruples California's current $100 million tax incentive program for feature films and hour-long television dramas, and includes rebates for visual effects.

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Not Sucky

Retired TAG staffer Jeff Massie recently came across this.

[The Animation Guild's] old logo simply cannot be true! LOL, man, LOL. New logo has nice, old-school concept to it. ...

You put stuff out on the intertubes, you wonder if anybody notices. Apparently a select few DO.

(Sitting in an airport makes for sparse blogging.)

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Liz Holzman, RIP

A top-flight artist passes.

Liz Holzman, an animation veteran and three-time Daytime Emmy Award winner for her work on the 1990s series Animaniacs and Pinky and the Brain, has died. She was 61.

Holzman, an animator, character designer, storyboard artist, writer, director and producer, died Monday, her family announced in a paid obituary in the Los Angeles Times. She had battled cancer for years.

A nine-time Daytime Emmy nominee, Holzman also worked on such series as Alvin & the Chipmunks, The Glo Friends, Smurfs, DuckTales, Muppet Babies, Adventures of the Gummi Bears, Darkwing Duck, Garfield and Friends, Baby Blues and The Zeta Project during her 30-year career. ...

Our condolences to Liz's family and many friends.

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Outsourcing

... from China to ... Australia?

Australia’s Vue Group is completing the VFX work for the Chinese and international versions of two 3D animated features in a co-venture with production company Shanghai Hippo Animation Design. ...

Among the sequences handled by Vue’s VFX team in Bunbury WA were the last 18 minutes of the film, replete with lots of shattering effects and lightning, as an alien with angel wings flies towards the moon.

Lindsay says both projects have already recouped their budgets, helped by worldwide distribution deals, excluding Australia/New Zealand, with a US company which will be unveiled next month. ...

Chinese partners will fund 80% of the projects with the balance from Australia. The total production budget for the three films to be co-produced by the Vue Group and Hippo would exceed $57 million.

Movie studios go where they need to in order to get their project done on time and on budget. If that means going to Australia, no problem. If it means the U.S. or Britain or France, they're down with that. But as technical expertise and know-how spreads to every continent, there's the looming question of:

"So how much free money can you give me?"

Which explain why the Aussies are considering new tax incentives for movie work, just as Canada, the U.K., France, New York already do. Just as California is close to doing.

Corporate welfare. You can never have too much.

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Renewals and Launches

I'm stuck in remote locations today, but there is this:

Star Wars Rebels will make its official television debut with the one-hour movie Spark of Rebellion on Friday, Oct. 3, at 9 p.m. ET/PT on Disney Channel, before the series premieres Monday, Oct. 13, at 9 p.m. ET/PT on sister network Disney XD

And this ...

The hit Hulu Original The Awesomes from Seth Meyers and Mike Shoemaker has been renewed for a third season. The adult animated series starring Seth Meyers as “Prock” is currently in its second season with new episodes premiering every Monday and will return for a third season in 2015 ...

The Awesomes is produced in Bento Box's Atlanta Studio (which would benefit from a TAG contract like its sisters in Southern California), and of course Rebels is made by Disney/Lucas (which could also benefit from an agreement, I think).

Animation continues to expand and flourish on multiple platforms, and the wave seems a long way from cresting. The fact that cartoons have a long shelf life (The Jetsons, Flintstones, Scooby Doo) and generate ongoing cash flow long after their live-action equivalents have vanished from sight is only one reason cartoons get made.

The fact that audiences watch the shows the first time around is also helpful.

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Everybody's Mentor

The story goes that Don drew his creative sustenance from one individual.

It’s impossible to talk about Don Bluth without talking about Walt Disney. ...

But here's a news flash: It's impossible to talk about John Lasseter without talking about Walt Disney.

Just as it's difficult to talk about Jeffrey Katzenberg ... who admits to poring over Walt's sweatbox notes ... without bring Walt into the widescreen frame.

Because the reality is that anybody who's currently anybody in Cartoonland was influenced by Disney. Walt, though he's been dead forty-eight years and his daughters and wife have gone to their rewards, is still the D.W. Griffith, John Ford, and William Wyler of animation. The Alpha dog of the whole shebang.

Even Illumination Entertainment chief Chris Meledandri, who developed his animation chops at Fox Animation, spent time at Disney executive-producing Swing Kids and Cool Runnings (among others). All roads run through Disney.

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Bay Window

Today I was looking at this clip about the making of Toy Story ...



... and how "dark" and "edgy" the first pass of the ground-breaking feature was. And how it didn't work.

But if you like dark and edgy, here's a full dose:




Which reminds me. When will Mr. Bay jump into animation and push the cartoon envelope?

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