Netflix meeting NM film benchmarks
Spending on three recent productions expected to hit more than $75 million
Netflix is settling in comfortably in New Mexico. On Oct. 8, 2018, the streaming giant announced its intent to purchase Albuquerque Studios to make it a hub for film production. The deal was signed in January.
It calls for Netflix to spend $1 billion over the course of a decade. In addition it will add 1,000 jobs per year.
Three months before hitting that one-year mark, Netflix is meeting all of its benchmarks.
Within two productions — “El Camino: A Breaking Bad Movie” and “Army of the Dead” — 772 New Mexico crew were hired.
According to Netflix, the direct local spend for the two productions is $69.7 million — “Army of the Dead” is $43 million, while “El Camino” is $26.7 million. Numbers for the third production, “Daybreak,” weren’t available.
Netflix has to meet $75 million in direct spending by Dec. 1.
Alicia J. Keyes, secretary for the New Mexico Economic Development Department, said actual numbers cannot be confirmed by Taxation and Revenue Department until Netflix submits its receipts for each show and its rebate is processed. “But based on estimates that the New Mexico Film Department tracks, Netflix will far surpass the $75 (million) direct spend
requirement established in the PPA (power purchase agreement) in New Mexico with ‘Army of the Dead,’ ‘Greenbrier’ (the production name for ‘El Camino’) and ‘Daybreak,’” Keyes said. “This is great news as it means consistent employment for our New Mexico workers.”
Earlier this year, the film tax incentive package was revised, passed by the Legislature and signed into law by Gov. Michelle Lujan Grisham. Changes went into effect on July 1.
Currently, the cap on what can be paid to film and TV productions in a single year is $110 million.
Film companies currently receive a 25% rebate on goods and service expenses for most projects in New Mexico, and some TV shows get up to a 30% rebate.
An additional 5% tax credit is given to companies that take productions to rural areas — which means 60 miles outside the Albuquerque/Santa Fe corridor.
Community partner
Since Netflix committed to at least 10 years in New Mexico, the company has carveouts, which make its productions not subject to the $110 million cap.
Ty Warren, Netflix vice president for physical production, said the entire deal happened quickly.
“We moved swiftly,” Warren said. “The track record in New Mexico has been good by producing high-quality films and series. That is what intrigued us. The infrastructure continues to grow, and there’s a known and proven crew base that’s there.
“There’s also the support of the community and relationships coming out of us being there.”
Warren said Netflix now has a seat on the board of the Albuquerque Chamber of Commerce and feels more like it is part of the community.
In recent weeks, Netflix has donated props and costumes from the canceled series “Chambers” to area school programs.
“Netflix has been donating props and sets to school programs and has participated in industry conferences and job fairs,” Keyes said. “We get telephone calls every week from students and others who want to work at Netflix, and the company understands that maintaining a positive community profile is important to building its workforce in New Mexico.”
Warren said Netflix looks for opportunities to help the community.
“It varies from production to production of what can be done,” he said.
Growing infrastructure
Three Netflix productions have been housed at Albuquerque Studios in the last year, keeping the lot full.
Keyes said the limitations right now are naturally set by the number of sound stages and crew availability. She said with the uptick in productions coming into the state, there is more demand for both.
Infrastructure for the film industry has been steadily built over the last 15 years.
“We are working on several fronts to grow this capacity,” Keyes said. “There is a lot of on-the-job training going on through the FCAP (Film Crew Advancement Program) as well as at the 21 high schools, community colleges and universities that have media programs.”
In addition, she said, the IATSE union does significant safety training and is developing a robust training plan for the coming year, and the Stagecoach Foundation, Santa Fe Studios and private acting studios have become “incredibly proactive and offering classes and seminars.”
Keyes said the state still needs to expand these programs.
“That’s why we expect industry partners like Netflix and NBCUniversal to contribute to workforce training with apprentice work, mentorships and financial contributions to schools,” she said. “The goal is to build a year-round workforce so those who live here can stay in New Mexico to pursue a career and raise a family.”
Lujan Grisham is supportive of the film industry and says the Netflix presence in the state is very important to the economy.
“We are building a 21st century economy in New Mexico, a portfolio of diverse and robust revenue streams that keep New Mexicans employed. Netflix is a key part of that,” the governor said.