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Why Hollywood isn’t actually in a rush to leave Georgia

This image released by Disney shows Scarlett Johansson and Jeremy Renner in a scene from “Avengers: Endgame.” The Disney film is one of many to take advantages of Georgia production incentives. (Disney/Marvel Studios/AP) (AP)
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The headlines from Hollywood’s Georgia controversy this week were stark: The entertainment business was prepared to decisively move on from the state because of a restrictive antiabortion law signed by the governor.

Or at least it seemed like they were.

Despite media outlets claiming the studios had threatened to boycott Georgia, it’s actually far from clear that Hollywood studios will leave the state anytime soon, no matter what happens with the legislation.

With a lavish tax rebate and an extensive infrastructure, the advantages of shooting in Georgia have grown exponentially in recent years. Three executives from different studios, speaking on the condition of anonymity because they were not authorized to talk publicly, privately acknowledged how difficult it would be to abandon Georgia.

On May 7, Georgia Gov. Brian Kemp (R) signed into law HB 481, which bans most abortions the moment physicians hear a fetal heartbeat, as early as six weeks into pregnancy. Other governors, including in Missouri and Alabama, soon followed.

After three weeks of silence on the law from top executives in a heavily liberal entertainment industry — and after ample pressure from the creative community — Netflix on Tuesday became the first large company to speak out against it. Ted Sarandos, the company’s chief content officer, told Variety that “should it ever come into effect,” alluding to legal challenges ahead of the Jan. 1 implementation date, “we’d rethink our entire investment in Georgia.”

With the dam broken by Sarandos, other companies began pouring through. Disney, WarnerMedia, NBCUniversal, AMC, Viacom, Sony and CBS all made statements suggesting a potential departure.

“If any of these laws [in Georgia and other states] are upheld, it would strongly impact our decision-making on where we produce our content in the future,” NBCUniversal said in a statement Thursday.

“If the new law holds we will reconsider Georgia as the home to any new productions,” WarnerMedia said Thursday.

“I rather doubt we will” shoot there if the law goes into effect, Disney chief executive Robert Iger told Reuters Wednesday. Stories with headlines such as “Hollywood threatens to leave Georgia” then proliferated.

But there are few signs studios are ready to follow through. Hollywood productions are planned months and sometimes even a year in advance. To extricate from Georgia even six months from now studios would need to begin talking to other film commissions about moving long-running or long-planned productions there, not to mention calculate how to make up potential shortfalls on tax incentives.

Representatives of WarnerMedia, Disney, Netflix, AMC, CBS, Viacom, Sony and NBCUniversal all did not comment when asked if they had begun to do this.

They would have plenty of incentive to stay.

Georgia has grown as a filming location over the past decade, since it began offering as much as 30 percent of a production’s budget in tax rebates. There are now more than a million square feet of soundstage space in Georgia, including the large Pinewood Studios, as well as large amounts of technical know-how from local crews. Finding that elsewhere wouldn’t be easy, or cheap.

As a transportation hub, Atlanta is also relatively simple and inexpensive to get to, an advantage other production centers such as Louisiana lack.

Maybe most important, though, is the tax-incentive factor. The rebate regularly means tens of millions of dollars for companies that can then be used for more shooting days, more crew and higher production values. Or, as is often the case, the money can simply be poured back into a conglomerate’s coffers.

Georgia is increasingly rare in this regard. It has kept its incentives high even as other states have scaled down.

North Carolina, once a hotbed, rolled back its incentives over the past several years after economists said the benefits were minimal. Michigan, for a time the hottest state for film production — for years if you saw a “Transformers” movie you were seeing Michigan — eliminated its package altogether four years ago.

In Georgia, though, studios still get 20 percent back right off the bat and 30 percent if they include the Georgia film commission logo in credits (an easy task). And if they shoot in Savannah or Columbus, they get even more back, since there are local incentives too.

At a time when production budgets are going up — the recently concluded “Game of Thrones” is one of the most expensive TV shows ever made, costing some $15 million per episode — these savings are critical.

That’s a big part of why Disney shot “Avengers: Endgame” in Georgia. It could recoup a chunk of its overall production budget — reported to be a whopping $350 million — in the form of tax incentives.

In fact, that’s a big part of why many of the companies that made the strongly worded statements about Georgia are shooting productions there right now.

Netflix has four productions going, including new seasons of “Ozark” and “Insatiable,” and is readying a fifth. WarnerMedia has “The Conjuring 3,” a series for its DC streaming service and HBO’s adaptation of Stephen King’s “The Outsider;” it’s also about to shoot a new HBO series with J.J. Abrams and Jordan Peele. NBCU has three different Bravo reality shows. Disney is shooting its Disney+ series “Encore.” All of these companies are getting significant amounts of money for shooting in Georgia — money available from a dwindling number of venues.

Some observers this week focused on what effect a boycott would have on the state. “The loss of Disney money would be a huge blow to Georgia,” wrote Fortune. But left unsaid is a perhaps more important truth: The loss of Georgia money would be a huge blow to Disney.

For their part, activists have pointed out that waiting to see if a court overturns the law is missing the point.

Shaunna Thomas, co-founder and executive director of the national women’s group UltraViolet, responded to Netflix’s comment that while the statement is appreciated, “waiting on the courts to act focuses on a distinction without a difference. The crisis moment is now.”

“Republicans like Governor Kemp don’t care about women. They do care about money, though, and Netflix brings millions of dollars to Georgia each year by filming in the state,” she added. “We need Netflix to engage in this fight and use its economic power to speak out for Georgia women . . . and refuse to do business in the state until the law is repealed.”