There is one phrase in Jon Voight‘s “Make Hollywood great again” plan that could upend the TV industry: “Restoration of the FINSYN Rule” for both broadcast networks and streamers.
The document, which Deadline revealed exclusively yesterday, also confirmed that TV series indeed is part of the initiative since initial statements, including President Donald Trump‘s Sunday social media post, only focused on American movies filming oversees being hit with tariffs.
The five-page plan, delivered by the Oscar-winning actor to President Donald Trump over the weekend, is not taken very seriously in Hollywood, especially when it comes to the part about imposing tariffs on other counties’ tax incentives. Veteran producers called the tariff idea “ill-thought” and “idiotic,” with another referring to the Voight-Trump initiative as “Two old men and a bunch of hot air.”
Still, almost everyone everyone I’ve spoken with agrees that the document is starting off an important conversation.
“Jon Voight has correctly identified the problem, which is so glaring, that Hollywood is disappearing before our eyes,” one veteran producer said.
Added another, “The hope is that there is acknowledgment on a national basis, it is a focus of the White House that our greatest export is now broken and challenged.”
The document also may be the most prominent call yet for the return of the 1970 fin-syn (Financial Interest and Syndication) rules that banned the broadcast networks from having financial interest in their primetime entertainment programs. It fueled the rise of independent producers like Norman Lear, Stephen J. Cannell and Aaron Spelling who ruled primetime — and owned their shows — throughout the the 1970s and 1980s, until the rule was eliminated in 1993.
While sin-fyn has always had wide support among independent producers, even those who have been lamenting its abolishment for years are skeptical about its reinstatement.
“I would love it if fin-syn came back but it won’t,” one producer said, noting that Voight and Trump have “no purview or authority to do it.”
The original fin-syn rule was installed by the FCC in a media landscape dominated by the three broadcast networks, ABC, NBC and CBS. One media observer believes that such a policy change today would not be in the watchdog’s jurisdiction but would be up to Congress and FTC to step in and declare that “the major streamers have too much power, and they don’t have the right to own everything in perpetuity.”
“It would be a Justice Department edict, not FCC edict,” the person said.
There are no details about the proposed restoration of the fin-syn rule for broadcast networks, while for the streamers, the document also proposes increasing premiums over the cost of production for longer license terms, from 25% for a 5-year exclusive global licensing deal to 40% for a 10-year one.
Streamers have actually pulled away from cost-plus deals where the premium is calculated as a percentage of the cost. That is because the practice, originally introduced by Netflix, has led to inflated production expenses that have also raised the prices of talent as studios found a way to increase their margins by going for bigger budgets that are fully covered by the streamer, resulting in bigger premiums for them.
Ownership is a cornerstone of the current broadcast and streaming profit model, so, the way the Big 3 networks kept pressing until fin-syn was dismantled, platforms would likely put up stiff resistance to any talk of the rule being reinstated.
At least in part because of that, observers are skeptical that Hollywood can go back to a full fin-syn, banning broadcasters and streamers from owning any entertainment primetime programming. A partial one is a more realistic possibility.
Like this one, suggested by a longtime produer: “One quarter of original productions has to be owned by independent.”
That is reminiscent of the quotas that exist in several European countries, including France, making global streamers invest in local productions.
Historic precedent
The parallels between the current political environment and the one at the time the fin-syn rule was adopted under President Richard Nixon are not lost on those who know the history.
The late agent-turned-Hollywood mogul Lew Wasserman is considered a main driver behind the push for fin-syn regulation that benefited his company MCA. He found a receptive ear in Nixon, whose FCC approved the rule.
“Fin-syn started from the Nixon administration because he was hampering down on the networks because of their news divisions; he was pissed at them over their coverage,” one veteran producer said, adding, “Sound familiar?”
Attacking the networks’ news divisions has been an almost daily ritual for Trump who has been complaining about the coverage. He also recently sued both ABC News and CBS News.
As for Wasserman, he later called his former client Ronald Reagan amid an effort during his presidency to abolish fin-syn, which was eventually squashed. It was two administrations later, during the Bill Clinton era, that, under pressure from the networks, the ownership restriction was removed, ushering in the era of vertical integration.
Tariffs vs. incentives
Voight’s proposal calls for a tariff amounting to “120% of the value of the foreign incentive received” to be imposed on productions that could’ve filmed in the U.S.
That would apply to most series shot in Canada and many of those filmed in Europe as foreign cities frequently stand in for American towns.
Beyond the case of whether tariffs are legal are not, there is confusion over how tariffs would be applied to tax incentives, which are not physical goods and come from various production areas. There are also questions over who would pay the tax and would it be passed down to subscribers on their cable or streaming bill.
Regardless, the consensus is that tariffs wouldn’t work and would “only cause harm on an industry that is already struggling,” as one producer put it.
“All this will do is penalize the industry, not help,” another producer said. “They will punish media companies that are making content.”
Instead, “we need to offer incentives just like the rest of the world does that need to be ratified and increased on a regular basis to stay competitive with those available worldwide,” the person said.
Whether it is an actual investment tax credit or a rebate, “the best thing for the U.S. to do is to institute a tax credit equivalent to the cost of staying in the country as opposed to going abroad,” one producer said, noting that filming abroad typically brings a 25% advantage. (Some countries, like Ireland and Thailand have tax credits that are as high as 40%.)
Voight’s seeks a 10%-20% federal tax credit, among other proposed incentives.
In another parallel to the Nixon era of syn-fin, there was a 10% credit for all programs at the time, except topical productions: news and series carrying the name of their star, such as The Mary Tyler Moore Show.
The need for federal incentives is so urgent, one producer compared the dire state U.S. TV production is in now to the 2008-2010 automotive industry crisis.
“Once we were on the verge of the collapse of the Big 3 automakers, the government stepped in last-minute and bailed them out. Those automakers flourished,” one producer said of the $15 billion bailout, noting that it may be time for the government to step in and help another “industry that is in pain.”
The situation is particularly bad in California. The producers I spoke with all shared how much they would prefer to make shows in Los Angeles and go home every night. All were adamant that it is not feasible for them given the high cost of production — from talent to crew to catering — making it prohibitively expensive to film in Hollywood.
Meanwhile, Canada was given as an example of a long-term strategy that is paying off (on top of the country’s advantageous exchange rate).
“Canada had the foresight. They have been doing this for 50 years, providing incentives for production across the country,” a veteran producer said. “They’ve built a massive, mature workforce, along with the financial incentives. It’s been 50 years of supporting the industry, now they are reaping the rewards.”
With the Golden State doing very little over that 50 years to keep production in town, “California needs to play catch-up, get in the game and compete,” one producer said.
Added another, “[TV programming] is one of the nation’s greatest exports; we should provide enough incentives to keep production here.”
