Alaska state Sen. Johnny Ellis sat before his colleagues in the Legislature explaining why the state ought to stop being so generous to reality TV producers under the film incentive program that he helped create.
Cable show productions travel fast and light with few in-state employees, he and his staff said. As a result, they don’t spend as much money in Alaska or hire as many Alaskans as feature film producers, Ellis told members of the House Labor & Commerce committee one spring day in 2011.
“I made a suggestion to anyone who would listen that we wanted to be careful about reality television. ... Who knows how expensive it would be?” recalls Ellis, who recommended reducing by up to one-third the amount that nonfiction TV shows are subsidized.
Fast-forward to 2014. The film subsidy program was renewed all right, extended by 10 years and with up to $200 million in state spending. But it’s missing the cuts to reality show subsidies that Ellis proposed.
Imagined as a way to lure Hollywood producers and big-budget productions to employ hundreds of Alaskans for a sustainable new industry, the program now spends more state money on reality TV than any other genre.
In the past 12 months, the Alaska Film Office has pre-approved a dozen reality shows for an estimated $6.8 million in subsidies. That figure dwarfs the $1.7 million in subsidies pre-approved for seven features and short films.
In hot competition for the next big show, reality producers are less likely than filmmakers to choose to film in Alaska based solely on the subsidy, the producers have said. "Deadliest Catch," the Discovery series that launched the current flood of Alaska-based shows, was in its sixth season by the time the state awarded the hit series its first subsidy of $584,600.
Yet the volume of reality TV underwritten by the state has grown seven-fold since Ellis made his case in Juneau. In 2009, three series received the subsidy. Last year there were 21, according to Film Office annual report.
For every dollar earned by an Alaska worker under the subsidy program last year, out-of-state workers earned five.
'A last-minute thing'
Calling it a concession to critics of the program he first proposed in 2008, Ellis wrote a bill to renew the subsidies that would have reduced money for nonfiction television from the current rate of 30 percent of qualified expenses to 20 percent.
“I didn't have any great insight, but I just saw a potential for it getting out of control,” Ellis said Monday.
Even though the architect of the program was willing to cut subsidies for reality shows, the proposed reduction vanished by the time the bill to renew the incentives became law. Asked why, Finance Co-Chairman Bill Stoltze, R-Chugiak, said he was focused at the time on killing the subsidy altogether, rather than tweaking details of how it worked.
“Maybe it would have been, in retrospect, better to work on trying to make concessions on the bill,” Stoltze said. Under a recent proposal, the film program would expire early, in 2016 rather than 2023.
Former film office manager Dave Worrell said the version of the bill that passed the Legislature and relaunched the film incentive program in 2012 came together quickly under a subcommittee led by Rep. Mia Costello, R-Anchorage.
“There was a lot of back and forth. The legislation that passed was essentially kind of a last-minute thing,” he said.
One change made to the program might actually dissuade producers of large films from setting up shop in Alaska. Under the new program, the amount of actor and director salaries that qualify for the incentives has been reduced from 30 percent to as little as 5 percent.
“Whether or not we were ever going to continue to attract them (feature films) is hard to say,” said Kelly Mazzei, executive director for the film office and a former corporate income tax auditor within the Revenue Department. “Were they coming here before because the credit was so lucrative to paying wages to actors from out of state? Maybe. I don’t know."
Feature film productions have clearly slowed since the credit calculations changed, she said.
Today, producers can greatly increase their subsidies by hiring more Alaskans and paying for more Alaska-based services, which was the point of the change and could prevent predatory production companies from gaming the subsidy program. But the resulting incentive plan is a complicated one and might dissuade producers that Alaska film industry boosters would love to have working in the state, Ellis said.
“The intentions were very good but they’ve complicated the program compared to other states and we haven’t seen a lot of interest in Alaska since then,” he said.
Costello said that she doesn’t recall people complaining about reality show subsidies in hearings on the renewal bill. Critics of the program did worry about the state under-writing massive actor salaries, she recalled.
“That’s where we came up with this idea to tie the tax credit to the employment of an Alaskan or to money that’s going into an Alaskan business,” Costello said.
New shows irk Alaskans
While lawmakers called for more transparency in the program, the bill they passed has locked away almost all previously available public information about the productions that are being subsidized.
If, for example, Alaskans wanted to know how much the 2011 series “Sarah Palin’s Alaska” received, they could find that information on a state website under the old subsidy program: $1.2 million.
Today the film incentives are housed in the revenue department, which argues that the same confidentiality laws that apply to oil and gas production credits also apply to details of the film incentives. As a result, the state does not say how much individual TV shows or movies receive in subsidies and does not say how much individual shows pay Alaskans versus out-of-state workers.
The Film Office also will not say who has applied for and been pre-approved for the subsidies. Want to know if Palin’s new TV channel is being subsidized by Alaskans, in other words? Ask her. Under the current law, the state isn’t telling.
Costello said the Legislature did not intend to limit public information about the incentives.
"It was my recollection, and personal desire, as much can be shared is shared," she said.
The only subsidy information that's public are aggregate summaries, by category, rather than details on specific shows. Among the 32 applications that have pre-qualified for the film incentive in the past year are:
-- 12 “unscripted” or reality TV shows, for an estimated subsidy of $6.8 million.
-- Nine documentaries, expected to receive $4.2 million.
-- Four commercials, for an estimated subsidy of $2.2 million.
-- Seven features or shorts at $1.7 million.
Several recent shows are already in the spotlight this year for irritating Alaskans.
The neighbor of a family profiled by Discovery Channel’s “Alaskan Bush People” fired fireworks into the air when he tired of a film helicopter buzzing above his “secluded” home near Copper Center. Some Alaska Natives have criticized one of the latest shows, TLC’s “Escaping Alaska,” as exploitive. Barrow residents recently posted a video to YouTube making light of the show’s premise of documenting young California-bound Natives who are tired of eating caribou burgers.
When pitching the subsidy program for renewal to House members in 2011, Ellis said it was no secret that cable television had fallen in love with Alaska.
“Whether you care for the subject matter or you care for the actors and actresses in these shows, the scenery has been beautiful. The tie-ins to Alaska seafood have been amazing,” Ellis said at the time, according to recordings of the hearings.
“We’ve just seen a great amount of publicity and promotion that we could never have purchased in our marketing programs,” he said.
By some counts, tourism is booming alongside the wave of reality TV series. The state Commerce Department recently reported a record number of out-of-state visitors to Alaska over a yearlong period ending April 30.
No one has studied whether the glut of Alaska-based shows contributed to the busiest-ever year for tourism, said Kathy Dunn, tourism marketing manager for the department.
“I would attribute more of that increase to the fact that the tourism marketing program has been funded at a higher lever over the last several years,” Dunn said.
Mazzei, the new Alaska Film Office director, said reality series like “Ultimate Survival Alaska" reveal corners of the state that even Alaskans rarely get to see. Surely some potential tourists, among the millions of people watching the series on networks like History, Discovery and TLC, are noticing too.
“Part of the intent of the legislation was to advertise Alaska in its beauty and glory and I think some reality shows do that,” Mazzei said.