In a move that should save up to $20 million a year in operating costs, ReelzChannel's Los Angeles production and business units will flee the state of California for New Mexico, a state offering generous tax credits and other incentives to the basic cable network.
The relocation was announced at a New Mexico press conference by ReelzChannel executives and Gov. Bill Richardson.
In a prepared statement, Richardson said, “The network's decision to relocate operations to New Mexico is a testament to the hard work we've put into making our state a world-class production destination.”
The network anticipates leasing a facility in Albuquerque, perhaps Albuquerque Studios, an independent, 28.1 acre studio with six sound stages.
Stan Hubbard, chairman and CEO of ReelzChannel, said the company will continue to operate a small “content bureau” in Los Angeles, and sales offices in Chicago, New York and Los Angeles. The bulk of the operation will vacate the L.A. Center studios, just west of downtown Los Angeles, by May at the latest.
The move could be completed as early as March depending on how fast a new home can be wired for production and if the network can negotiate its exit from the Los Angeles studio lease. Hubbard said the Reelz will still come out ahead, even if it has to pay off the balance of its current lease.
With the move, the programming, production, Web development, creative services, marketing and communications divisions will be housed in the same location for the first time.
Hubbard called New Mexico a “business friendly state,” adding that individual members of government, the Chamber of Commerce and the New Mexico Film Office courted him heavily in an effort to convince the network to make the move. He termed the relocation a preemptive move to counter an uncertain economy.
New Mexico offers tax breaks to movies and national television productions, in return for the decision to film in the state. Such breaks have already helped lure such cable productions as AMC's Breaking Bad, USA's In Plain Sight and Starz's Crash. For instance, productions can qualify for a 25% refund of taxes spent in the state, a rebate that applies to taxes on everything from wages and benefits, to set design and construction to editing services. Productions can also quality for interest-free loans of up to $15 million from the state, which are repaid with proceeds on the back-end of a production.
The Hubbard family has owned the NBC affiliate, KOB-TV, Ch. 4 in Albuquerque since 1957. It was the station's general manager who urged Hubbard to consider a move to New Mexico. He set up a meeting with an executive of the state's film office and eventually state executives from Rick Homans, the secretary of the revenue and taxation department to the office of Gov. Bill Richardson got involved in easing the way for the ReelzChannel move, Hubbard said.
He added that layoffs among the channel's production staff, announced in December, were related to this move. Hubbard decided in November to move the channel and decided the transition would be easier if the channel was not trying to continue to produce its original series Dailies during the transition. Forty people will lose their jobs at the end of January after the last episode of that series.
That leaves about 160 employees, who were notified Jan. 6 that their jobs would be moving to New Mexico. Hubbard declined to estimate how many employees will remain with the network for the move, adding ReelzChannel already has a job fair planned Jan. 13 in Albuquerque. Ads for that hiring event hit the airwaves on Jan. 7.