Is this the final act? Entertainment lawyer discusses potential loss of film incentives

By Tom Kirvan

Legal News

Perhaps the curtain is closing on the "Hollywood of the Midwest."

That would not be the script that attorney Ethan Bordman hopes is written on the highly touted "Michigan Film & Digital Media Production Incentive" program that took effect in April 2008.

The program, with its generous tax credits, is under siege following a recent round of budget-tightening proposals outlined by Governor Rick Snyder. Michigan's top elected official wants to eliminate the uncapped film incentives, which can offer rebates of up to 42 percent of a filmmaker's production expenses. Instead, Gov. Snyder has proposed $25 million in rebates each for fiscal 2012 and fiscal 2013, while also honoring $75 million in previously awarded credits for the current fiscal year.

Such a proposal already is costing Michigan, said Bordman, a Detroit area attorney specializing in entertainment law.

"With all the controversy regarding the Michigan Film Incentive and the Governor's opposition to it, I have had several calls from filmmakers who are putting productions on hold," Bordman said.

In fact, Bordman said that the news is causing international waves to lap up on Michigan's filmmaking shores.

"I have a friend overseas, from my LL.M program in entertainment law, who was reading about it and had plans to bring a movie to Michigan from a group of London filmmakers and was concerned - so the news has become international," Bordman related. "Let's hope that the Governor can see all the good it has and will do for the state."

According to Bordman, the growth of the film industry in Michigan has been nothing short of "phenomenal" since the incentive package was enacted three years ago.

"In 2007, about $2 million was spent in TV, film, and digital media production in Michigan," Bordman indicated. "In 2008, spending increased to $125 million. In 2009, it rose even higher, to $223 million. In 2010, it is estimated that spending exceeded $300 million."

And 2011 figured to be the biggest year yet, according to Bordman, who also holds a master of business administration degree from Wayne State University.

"On January 13, the film office released its semi-annual report," he said. "Although its title is not yet released, there is one film on the production schedule for 2011 that submitted a budget for more than $104 million in spending in Michigan."

Last month Ernst & Young released a report titled "Economic and Fiscal Impacts of the Michigan Film Tax Credit," according to Bordman. The report stated a 2010 return of almost $6 for every dollar of net film tax cost, employment of 5,606 residents, creation of 3,860 jobs, and $503 million in statewide sales for businesses.

"All of this generates taxes for local and state government," Bordman said. "It does and will continue to work. Everyone in Michigan wins."

Bordman, an alumnus of the University of Detroit Mercy School of Law, is former chair of the State Bar's Arts, Communications, Entertainment and Sports Section. He specializes in drafting entertainment contracts and in "deciphering entertainment terms which clients encounter such as 'pay-or-play,' 'step deals,' and 'option contracts,'" he said.

"It became evident early on in my career that major entertainment companies will only deal with you if you have a legal background and can talk their language," Bordman said. "That served as my principal motivation to go to law school, to earn that credibility."

Following law school, Bordman completed an LL.M program at the University of Westminster in London and then received a master's in international sports law at Anglia University in Cambridge, England. He worked with the Detroit branch of the American Federation of Television and Radio Artists on several projects before starting his own entertainment law practice in West Bloomfield.

"There is a misconception that the incentives just apply to movies, but it also covers television and the digital media," said Bordman, whose parents, Arlene and Myron, are both accountants. "Though it is often referred to as the film incentive, it includes TV series and music videos, as well as digital media projects such as video games, webisodes, and digital animation."

"The incentives have not just been about jobs for actors, producers, and writers," Bordman said. "There has been tremendous spinoff for hotels, restaurants, lumber yards, clothiers, and the like. It has really helped spur the local economy."

Supporters of Michigan's film industry turned out in force last month in Livonia, urging state legislators to block Gov. Snyder's plans to scale back the incentive program. A similar rally took place last week in Troy, attracting upward of 500 backers.

Bordman applauded such displays of support. He said the program has "done wonders" to put Michigan in a "more positive light" as a business-friendly site.

Published: Mon, Mar 14, 2011

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