Two huge international media companies have chosen to film prestigious television series in Israel this year: NBC and Fox. But the Israeli producers for Fox are furious: While NBC will receive up to 22 million shekels ($6.4 million) in funding from various government agencies, the Fox network’s request for similar funding was turned down.
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NBC, which owns the USA cable network, is scheduled to start shooting its Dig archeological thriller series in Jerusalem in the next few months, on the initiative of Channel 2 franchisee Keshet. Fox is currently filming in Israel its "Tyrant" series, which was written in cooperation with Gideon Raff, who also jointly created "Dig." Raff was also behind "Homeland."
Fox is calling Israel a “third-world country without clear regulations,” said Avraham Karpick, the producer of "Tyrant" in Israel. “They feel that because they don’t have connections like NBC and Keshet do they will not receive funds. They told us they will film the next season somewhere else,” he said.
Both series are to be broadcast on popular channels in the United States and each has brought tens of millions of dollars in investment to Israel.
"Dig" is a project of Keshet CEO Avi Nir, after he visited the new archeological sites at the City of David in Jerusalem. Raff created the six-part series with Tim Kring, the producer of Heroes. It is based on the story of an FBI agent stationed in Jerusalem who is investigating the murder on an American archeologist. Finance Minister Yair Lapid has even met with senior NBC executives to discuss, among other issues, producing the series in Israel.
"Tyrant" is about the life of an Arab dictator. It was originally supposed to be shot in Morocco, and a pilot was filmed there using the country’s royal palaces. But the producers were disappointed by the work in Morocco and decided to build new studios, including a palace, on agricultural land near Kfar Sava. The cost of producing "Tyrant' in Israel is estimated at $30 million, and some 300 people are on the set every day with another 1,000 providing services, said Karpick.
Various countries compete to draw in the international networks by providing various incentives. Usually the biggest incentive is tax breaks. Temporary regulations were enacted in 2008 to encourage such productions but they failed, agree both government ministries and the producers. The tax incentive mechanisms were so complex that they were impossible to meet, and the regulations lapsed last year.
Two years ago the finance and economy ministries announced an investment of 60 million shekels in a pilot to encourage foreign productions. The productions would be granted a 20% to 25% credit on their expenses in Israel, but since then an election was held and the government changed, and now the two ministries are refusing to provide such incentives. Other networks have also filed requests for aid, but except for "Dig" they were all turned down.
"Dig" received its funding based on a cabinet decision to provide up to 22 million shekels − but only for two seasons of "Dig."
The chairman of the Israel Producers Association, Assaf Amir, said they had worked for four years with the two ministries to fund such incentives, but since the last Knesset election the Economy Ministry has lost interest in the project − and even informed the association that it had. “We have no problem with Keshet receiving money, but we want it to be equal and all the other mid-sized and small businesses to receive money. Now it turns out that the funding for 'Dig' seems to be a one-time [occurrence],” he said.
A source in the treasury explained that while the overall economic impact of the tax incentives in this case is positive, it is still relatively low since employment on the series is not continuous and much of the benefits are due only to service industries with low productivity, such as catering and transportation.
The reason "Dig" is different is that it is funded from a special grant via the Jerusalem Development Authority, and has a special contribution to the image of Israel and the capital − more than just any series that happens to be filmed in Israel but is not about the country. The return on investment is far too low and cannot be compared to investments in the development centers of Google or Intel, said the official.
The Economy Ministry said it was studying the matter of incentives to draw foreign productions to Israel, in coordination with a large number of other ministries, but the work is not yet complete.