A Brief History of MN Film & TV (with some context)
Organization and Industry History
MN Film & TV was founded in 1983. It was a time when three networks dominated television, and independent filmmaking was only beginning to emerge from outside the established studio system. Back then, the internet and digital media did not exist. No states were offering production incentives. Cable networks like Showtime, The Movie Channel and HBO were new distributors in all 50 states, and HBO produced its first original movie. Hollywood was the filmmaking and TV capital of the world.
Despite the dominance of Hollywood, movies were also shot on location in other states, including Minnesota. In the 1970s high profile films such as Airport, The Heartbreak Kid, and Ice Castles used Minnesota locations and crew. To assist productions, and to attract additional projects, more than 20 states already had established film commissions as government agencies, including Colorado (1969), Texas (1971), Georgia (1973), Montana (1974), Illinois (1975), Hawaii (1978), and Arkansas (1979), among others.
In 1979, Robert Redford chose to shoot Ordinary People, based on the novel by Minnesota author Judith Guest, in Illinois rather than Minnesota. The primary reason he gave was the lack of a state film commission to assist the production. Several individuals, including Minnesota entertainment attorney John Stout, approached Governor Al Quie about creating a state film commission. When the state declined, Stout teamed with others to form the Minnesota Motion Picture and Television Board as a 501(c)3 nonprofit organization to serve the state. According to Stout, the founders mistakenly assumed that it would be easy to fundraise in the private sector for such a venture, but they soon learned that was not the case. Although Minnesota needed a film office to support and attract the industry, it was difficult to make the case for donations to what was, in other states, a government agency.
When Rudy Perpich became governor, he was more open to the industry than the previous governor, and in 1984 the state began appropriating funds for a portion of the organization’s operation costs. This appropriation required private matching funds to be raised in order to access the government funds, much like today. The organization opened an office and hired an executive director.
MN Film & TV, despite being a private nonprofit and not a state agency, served the same purpose as commissions in other states: to provide resources and information to filmmakers and promote the state as a location. Each year the organization published the Minnesota Production Guide, which accounted for the majority of the private income needed to match the state operating appropriation.
Between 1983 and 1995, MN Film & TV was the go-to source of information on locations, crew, equipment, and services in Minnesota. The organization had success in luring film production to the state, capitalizing on Minnesota’s strong crew base, stunning locations, production infrastructure, and talent. During those years, Disney produced Iron Will and the three Mighty Ducks movies; Warner Bros. shot Grumpy Old Men and its sequel. MGM, Castle Rock Entertainment, HBO, and 20th Century Fox all shot films in Minnesota, as did numerous smaller companies and independent producers. During these years, the economic playing field was level between states because no incentive programs existed. Production budgets certainly influenced decisions about locations, but state tax credits and rebates were not a factor for producers or television networks to consider.
That changed in 1995 when Canada offered the first film production incentive in the form of a federal tax credit. The credit helped to increase production volume as film and television producers rushed to Canada to to take advantage of the growing incentive at both the federal and provincial levels. In response, US states began creating their own incentive programs in the form of either tax credits or rebates. Minnesota’s rebate program, established in 1997 by the state legislature and administered by MN Film & TV, was among the first of these programs and allowed production in the state to maintain a steady pace until a shift in state politics resulted in the program losing its funding in 2002.
By the time funding was restored in 2006, nearly 20 US states had established production incentive programs, and these incentives were becoming a driving force in location decisions. Minnesota’s rebate program received its largest appropriation ever in 2013, and from 2014 through 2017 MN Film & TV certified 239 projects for rebates with the state’s $18 million investment. This investment resulted in at least $82.5 million in direct spending in Minnesota.
Despite this, MN Film & TV faced, and continues to face, confusion about its structure, mission, and purpose. According to the numbers, the rebate program was providing the state with a consistent return on its investment. But fewer major feature films were coming to Minnesota, budgets were getting smaller, and fewer workers were being hired. The last feature film with a budget over $5 million was A Serious Man in 2009. Instead, the majority of spending and job creation supported by the rebate during these years (84%) was happening in cable television projects, commercials, and post-production. While this work helped maintain a strong, but shrinking workforce, its relatively low profile did little to impact perception on the part of the public or legislature that the program was providing little benefit to the state.
The current level of appropriation for the rebate program ($500,000 per fiscal year) is too low to attract mid- to large-budget feature films or long-form cable series. The low funding and the inherent lack of stability in a rebate program that depends on legislative appropriations from year to year has brought outside film and television production in Minnesota to a halt. We no longer have a competitive advantage in the production landscape.
Operating income for MN Film & TV comes from three main sources:
- Private funds: Includes individual donations, sponsorships, grants, special events, program revenue from the Production Guide. From 1984 through 2009 the main source of private income was ad revenue, listings, and sales of the annual printed Minnesota Production Guide. The rise of the internet made the publication of a print directory obsolete and the production directory became an online (primarily free) resource, leaving a gap in the organization’s private income that has never been replaced. We have not been successful in attracting foundation funding because our work does not fit within most foundations’ guidelines. When the organization has received foundation funding in the past, it was primarily for regranting to individual filmmakers through programs like the Blockbuster Fund.
- State operations appropriations: Allocated by the state since 1983 with the exception of a few years. It can only be accessed as reimbursements of expenses paid once the organization has raised the required matching funds through private fundraising. It is difficult to manage cash flow under this model because all invoices must be paid before reimbursement can be claimed.
- Rebate administration: Since 2006, the state has allowed the organization to claim a small percentage of the rebate appropriation for administration. This too is available as reimbursement of expenses paid. This amount varies greatly based on the size of the rebate appropriation.
Current Financial Situation
Private income has remained low and fairly static since the end of the print production guide in 2009. State operations appropriations have remained at the same level for 10 years, with no increases for cost of living, and the rebate administration funds dropped substantially with the cut in rebate funding beginning in FY18. Since then, the organization has drastically cut expenses, primarily in the areas of personnel, travel, and marketing. This has left the organization operating at a bare-bones level, unable to create programming, update technology, or have a presence at industry festivals and events.
The prospect of MN Film & TV getting a rebate appropriation of $1 million or more seems very unlikely in the foreseeable future. We do believe that a tax credit incentive is possible and would allow Minnesota to once again be competitive in today’s incentive-driven world, but we are now facing a potential “new normal,” with production shuttered as the COVID-19 global pandemic causes further disruption. We know that production will restart as soon as it’s safe for workers, and we know that the appetite for digital content is growing. Whether Minnesota participates in the coming resurgence of production depends on a number of factors, but it seems clear that state government involvement and clear state mandate is needed to bring Minnesota in line with the rest of the country and the current and future needs of the industry.
The Current Film Commission and Incentive Landscape: By the Numbers
- Today, 45 US states have statewide film offices that are responsible for incentive administration, location and crew referrals, marketing of the state as a location, and other services.
- One state (Minnesota) is a private 501(c)3 nonprofit
- One state (Washington) is a 501(c)6 nonprofit. Their rebate incentive is funded by state lottery proceeds and available almost exclusively to Washington residents
- Three states (Arizona, North Carolina, Michigan) have public/private partnerships which operate under the auspices of a state agency with state appointees as the governing body
- Forty states have film commissions that are state agencies, including states that do not have incentive programs
- States with incentive programs: 33
- States with grant or rebate programs: 15*
- States with tax credit programs: 21*
- States with no incentive program: 17
*Maine, Virginia, and Utah have both rebate/grant and tax credit programs