Business leaders in New Jersey’s nascent film scene aren’t afraid of going off script.
And, if you want their honest take, they might be ready to ditch the “nascent” adjective when talking about one of the state’s fastest-growing industries.
That might have something to do with studio giant Lionsgate laying the groundwork for a 259,000-square-foot film and television complex in Newark; or Netflix’s promised $903 million studio at the former Fort Monmouth military base and the entertainment behemoth’s pledge to stay there for at least a decade.
And it definitely has something to do with the success that Gannon Murphy, general manager of Cinelease, and Nick Day, co-CEO for Edge Auto Rental, have seen for their businesses and others finding a niche in the Garden State’s entertainment sector.
Murphy and Day both feature in leading roles at the Screen Alliance of New Jersey, or SANJ, the state’s first nonprofit committed to acting as a unified voice for this industry.
And they both gave ROI-NJ their take on what’s going on behind the scenes.
ROI-NJ: New Jersey had its initial wave of prominent studios arrive shortly after the New Jersey Film & Digital Media Tax Credit Program was established in 2018 (and expanded in the following years), including Cinelease Studios – Caven Point. Why did this coming wave of studios look at an arrival in the next few years instead?
Gannon Murphy: We’ve many times touched on the fact that we were early adopters, and that has borne itself out. As far as the lag time with the other projects, there’s only so much we can speak to. While we’re in the same industry with the same products, these companies are backed by very different entities, with different business models and different states of capitalization. None of them are us. I can say with accuracy and observation that the lag time is going to depend on who the developer is, the cost of capital, interest rates, costs of materials and labor. It can be a difficult proposition to develop these projects, or any project, in the market we’re in right now. But this is an asset class with a lot of upside, so there’s an attraction to it.
Nick Day: Here’s what I can say about our story: About a year ago, we followed our clients to Newark. It’s not just the brand names — Netflix, Lionsgate — coming here now, but also the infrastructure coming in to support all the activity. There were all these production companies doing shoots in New Jersey, and we identified the need to open a location here to support all that growth. Emerald Green Trailers, another member of SANJ’s board, and a sister company to Edge Auto, did the same, opening an office in Newark as well to support the industry’s growth here. As the infrastructure is drawn here, the opportunities are getting much more robust. There’s that foundation for blue collar, long-term union jobs. And more companies like ours are getting ready to plant a flag to support the need for resources like ours in New Jersey, which are needed on a much more frequent basis now. So, we’re excited to be part of that.
ROI: Is there any chance a company such as Netflix won’t have the same need for third-party partners supporting their operation as the comparatively smaller studio projects?
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GM: It’s a good question: If I’m building one of these megaprojects, what do I need all these infrastructure partners for? In fact, why don’t I just sell the supply myself? I’m not Netflix, I’m not (Netflix co-CEO) Ted Sarandos, so I don’t want to speak for him with authority. But I can tell you there are two things fairly commonly understood in business that point to why these companies are such valuable partners: The first is, if you have an office, you have pens and staplers, but you’re not buying Office Depot. You acquire those things on an ad hoc and as-needed basis. And that’s typical in any business doing what they do well — having partners do what they do well. In modern times, these (film and television) companies create money around storytelling and putting quality content on a screen. Their sole drive is to do that; they know they can’t do it all. So, they rely on companies such as Edge Auto, Cinelease, Herc Rentals and others. They have these partnerships to grow service businesses around them to support them on that core mission they have. That model continues to grow and expand. That’s true in New Jersey and multiple other states. That comes with an understanding in the public and private sphere — switching back to SANJ conversation and the reason we’re vocal with the state Legislature and executive branches — that wins can be achieved and gained as long as there’s a thoughtful and consistent approach to state incentives.
ND: We do a lot of work for ‘Saturday Night Live.’ And, if you’ve seen the show, you’d think ‘Why would they need to go on location?’ They’re on location nonstop, even though they have a studio. It could be Long Island, or all over the five boroughs (of New York City). What do they need for those shoots? Box trucks to transport their gear, cameras and lights, transit vans for the crew, black SUVs for the actors, maybe a fleet of smaller cars to scout locations. So, there’s a lot of rental trucks behind just that one client. If you’re going out to a large (film) shoot, you need trailers for the cast: The stars might need their own specific trailer, the cast might have one with smaller rooms, the director and everyone else might need offices, there’s also makeup and wardrobe trailers. Now, all of a sudden, as the lead over at (Emerald Green Trailers) describes it, there’s a traveling circus that you need to go to that location. And you can couple that with catering you need, restaurants where cast and crew are eating out, everyone getting coffee in the morning and hotels to supplement all of those people. There’s potentially hundreds of thousands of dollars going into a town where a shoot is taking place over the course of several months. It’s such a huge influx of money that it’s no wonder towns are trying to attract this activity. A lot of it stays in the town, with local businesses like ours. That’s a big part of our pitch, and why it’s so important to us.
ROI: How much of that infrastructure, as well as additional studios, can New Jersey’s film industry potentially support?
GM: What’s the market look like overall for saturation? That’s the million-dollar question. It’s an evolving answer. How many more studio boxes can the state handle today? There’s X number. I’m not going to hazard a guess as to the exact amount. But what’s much more important and exciting than that is that if the state continues to have an aggressive tax incentive that’s transparent, predictable, easily monetized, then we might be looking at X plus something. I don’t know what that is. Maybe it’s twice today’s number. The point is, there’s a significant variability — and, ultimately, an increase — in what the state can handle as long as it stays behind the industry.
ROI: We’re in an election year nationally and heading into a New Jersey gubernatorial election next year. Does that ramp things up for your organization?
ND: The answer is ‘yes.’ With the next governor, we will certainly hope the leadership in Trenton is just as supportive as (Gov. Phil) Murphy has been. And we’re going to work as a group to support the candidate that supports the industry. It’s business growth in New Jersey, so it’s easy to get behind, even if tax incentives might be controversial to some. The fact that it has such a tangible, measurable impact on the state, it’s going to be hard for candidates to come out hard against it. From our perspective, we’re not sitting on either side of the aisle. We’re designed to get behind the politicians to support our membership and the employees, families and union members most impacted by the strength of the industry here in New Jersey.
GM: One of the things that makes this an effective organization is there’s really a spectrum of businesses represented on our board of directors. And that exemplifies the industry. And, as for advancing our mission, we’re agnostic to the politics on either side of the aisle. We’ve seen success in advocating and telling our story consistently and clearly on how big this industry can be. One thing I’ll speak to is, I’m a big advocate of anyone coming down and seeing the scope of it. How many trailers, box trucks and everything else gets involved in moving this circus around town. It’s a heavy lift. It’s always bigger than we think it is. And the beauty of it? There’s union members driving those trucks and union members building the boxes they shoot in. We’ve seen members of the body politic come away from seeing that with a light bulb going off, walking away saying that they’ve drunk the Kool-Aid.
ROI: Even if the pipeline of studios and numbers point to New Jersey’s film scene hitting its stride, how is it viewed through the lens of the film industry nationally? Is the reputation element there yet, or is New Jersey still looked at as something of a secondary option compared with a Hollywood or New York’s film scene?
ND: When people are looking at where to shoot, they’re looking at where there’s viable tax incentives, which right now is New Jersey, New York, Georgia, California and a couple ancillary states. And then, it’s a question of where’s the talent and infrastructure to support the project. New Jersey has that. And, remember, it can also draw on New York’s talent as well, even if it has plenty of its own. Between the infrastructure, the vendors, the people, everywhere up and down these projects, there’s no step down from a state like New York. And, when you factor in the cool locations, whether it’s the Hoboken skyline, the mountains, beaches, anything in-between, New Jersey isn’t playing second fiddle to anyone. And, when decisions are being made on where to shoot, we’re seeing that.
GM: The scale of productions here in our facility alone — we’ve hosted some amazing, seriously scaled productions. I can’t get into who the clients are until they’re released, but these are great, well-known projects here. And I know that as a service provider in New Jersey, we’re getting more calls than we can handle. There’s enough evidence of people taking the film scene here seriously. So, let’s just keep on going.
