Saturday, November 15, 2008

Bailout Mania Reaches Utah: Now The Sundance Film Festival Wants State (Taxpayer) Funding

As feared, the $700 billion bailout package passed by Congress has not promoted a sense of increased financial responsibility nationwide. Instead, a host of other entities are now squawking and jostling for a piece of the taxpayer pie. The Big Three automakers want taxpayers to bail their way out of years of corporate irresponsibility. The mayors of three cities, Atlanta, Philadelphia, and Phoenix also want taxpayers to bail their cities out of years of local political and fiscal irresponsibility.

And now, bailout mania has reached the Beehive State. The normally well-heeled Sundance Film Festival, a playground for rich yuppies, is considering asking the state for financial help as one of several strategies to cope with declining revenues and corporate sponsorships. In addition, the threat of a gay-led boycott of Utah, which will probably fizzle, is also generating some concern. Their objective at the moment is to preempt future financial shortfalls. The full story can be read at the Provo Daily Herald. On November 16th, KSL picked up the story also.

The nonprofit Sundance Institute, which oversees the annual festival, offers what appears to be persuasive justification for their request:

- In 2008, the festival attracted more than 45,000 film-goers who in turn generated $63.4 million in spending. More than $268 million in spending was generated by the festival over the past five years.

- The average attendee spends more than six days at the festival, with 37 percent of its visitors skiing an average of 2.5 days in Utah. Eighty percent of the film-goers indicated they would visit Park City again and 44 percent plan to return in the spring and summer months.

- Media coverage of the festival helps put Utah on the world map. More than 1,300 journalists from 56 countries converge in Utah for the festival, producing 1,100 magazine and newspaper articles with a total circulation of 328 million and 2,380 radio and TV segments to more than 287 million viewers worldwide.

Sarah West, director of Utah Community Development for the Sundance Institute, insists it would be a worthwhile investment because she believes the entertainment industry is traditionally recession-proof. Steve Densley, president of the Provo-Orem Chamber of Commerce, believes that investing in the festival will yield great dividends for the state, explaining that the people who come to the festival are well-heeled, and will spend enough money to generate worthwhile sales tax revenue.

Until now, the Utah State Legislature has been skeptical. They turned down Sundance's request for $1.5 million in funding in 2008. Nevertheless, Jason Perry, executive director of the Governor's Office of Economic Development, would be willing to take Sundance's requests to the state legislature simply because the festival has yield a good "ROI" (return on investment) for Utah in the past.

Sundance is continuing their own promotional efforts. At the upcoming festival in January, they plan to host two "Utah World Cinema Connection" luncheons - one for international business leaders to discuss doing business in Utah, and another for national business leaders.

Commentary: Any request for state funding is completely unjustified at this point. By their own admission, the film festival is not currently in any financial trouble. They simply want to "grow" the festival and are looking to do it on the public dime.

Their assumption that the entertainment industry is traditionally "recession-proof" may no longer be applicable. Reports from all over the country show that Americans of all different income levels are slamming their wallets and purses shut as the retail industry is experiencing unprecedented declines. In addition, Utah tourism ads are already bringing declining returns. The state received $11 in tax revenue for every dollar it spent on its summer advertising campaign in 2008, down from about $17 in 2007. The summer advertising campaign lasted from March to October and cost nearly $4 million. In terms of total spending in the state, Utah received $143 for every $1 it spent on advertising during that period -- down from $215 in 2007.

Furthermore, much of the preferred "financial demographic" - the well-heeled visitors - aren't as well-heeled now as they were last year. Massive layoffs from quality jobs have occurred, the latest announced by Sun Microsystems, which expects to lay off as many as 6,000 workers. These are the type of people who had discretionary income to spend at the Sundance Film Festival, and if they lose their jobs, they ain't coming, period.

The first and foremost responsibility of government is to provide essential services. Emergency services, road maintenance, and facilities maintenance and replacement are at the top of the list. In the face of declining tax revenues, it is not appropriate for essential services to compete against luxuries like film festivals for taxpayer funds. Comments posted to the KSL story show public sentiment overwhelmingly against giving any taxpayer funds to Sundance.

The state legislature should say "Hell, no" to any request from the Sundance Foundation for public funding. Let it pay its own way, and let the market determine whether or not it survives. We can't afford to bail out the whole country.

3 comments:

Ray said...

There are media layoffs but I still see thousands of high paying old and new media jobs posted online -

www.linkedin.com (professional networking)
www.indeed.com (aggregated listings)
www.realmatch.com (matches jobs based on your skills)

Good look to those looking for work!

Deseret Dawg said...

Ray - I've also seen some of those jobs as well, but how long will they remain available? Will layoffs at places like Sun Microsystems have a cascading effect?

Because Bernanke has already been so wrong about this economy, I'm leery of any government projections. And 1929 is a questionable model simply because there are so many different variables now. Number one being credit. It was uncommon back then, but almost universal now.

steel68 said...

An easy way to comprehend the Ponzi scheme is NOT to look at men like Bernanke and Paulson as authentically moving towards resuscitating and rehabiliting the system,but as public relations vehicles/agents(such as a Dana Perino)who spew their raw sewage into the gullets of the obedient minds of the predictable Press and puny public.

This country is headed for a viloent economic wreck igniting a social conflagration which is now beginning to manifest itself and all of you who have basked in the false sunlight of automatic redemption or naive trust are about to be sent into the "Jewish wood-chipper."

Maybe I'll ask Hank and the boys if they can bail me out of my remaining $1,000 dental bill.I'm too big to fail!

"Each age thinks its own is eternal.But though for five hundred twelve moons,all Romara,by courtesy of history,was republican;yet,at last,her terrible king-tigers came,and spotted themselves with gore"-Melville