How the Fiscal Cliff helped Hollywood.

That fiscal cliff drama last week was better than some shows I’ve seen!  Special holiday sessions of Congress, negotiations into the wee hours, nonstop blame-games . . . but we finally got a deal.  (Sort of.)

A little known fact is that buried into section 317 of the fiscal cliff deal was an extension for “special expensing rules for certain film and television productions.”

So as arguments were being made on how high to increase taxes, Tinsel Town got a breather.

See it all started back in 2004, when Congress first passed “production tax incentives,” which were extended in ’08 and set to expire in ’11.

And as this article on the subject says, “The fiscal cliff deal extends the tax incentives through 2013–even as payroll taxes rise on ordinary Americans.”

But that’s not what I’m blogging about.  This isn’t a poli-blog (yet).

What I’m irked about (again) is the consistent show of support that Hollywood gets from our legislative bodies, when Broadway gets squat.  Now look, I understand.  For one, a lot of television and film production went to Vancouver and overseas, and when that happens our country loses revenue, so part of the reason to keep these incentives going is helping keep production here (I’d like to see the stats on whether it has really helped, however).  For two, Hollywood has a super wealthy and highly visible lobby of its own, and we . . . uh . . . do not.

While we’ve gotten a few bits and pieces of tax relief over the years, we’ve never seen anything substantial (how about some incentive for our investors?).  The reason for the denial?  Simple . . . if you want to produce a Broadway show, you can’t go to Vancouver.  You can’t go overseas.  Broadway only exists in one place.  So our leaders look at us and say, “No tax relief?  Poor babies.  Go somewhere else if you don’t like it.”

Well you know what, my legislative friends?  There’s a rumbling that’s just beginning in the new Producing Guard.  Yep, I’m starting to hear the people sing.  And they’re saying things like, “It’s so much cheaper to produce in London.  I’m just gonna go there.” And, well, you read my blog yesterday about how I’d think about trying out a show in Australia versus the US next time.  I know Korean producers who are actively looking to develop shows in their native land . . . because they get governmental support to do it.

So, congresspeople . . . you might think you’ve got us on location lock down . . . but the times they are a-changin’.

Let’s hope the tax laws do too.

(UPDATE FROM KEN:  If this post interests you, check out this more recent post about Broadway and Potential Tax Credits.)

(Got a comment? I love ‘em, so comment below!  Click here then scroll down to say what’s on your mind!)

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  • Although I understand the sentiment, I’m bothered by the “Broadway is only in one place.”. Theatre — musicals and plays — does not just exist in New York. Great theatre — and great theatre development — exists throughout the United States. From the developmental work they do in LaJolla, Ventura, Los Angeles, Boston, Nashville, Seattle, Chicago, St. Louis, and numerous cities I’ve failed to name — this provides the development of the product. What we need to do is have lobbying to encourage tax breaks on developmental productions whereever they occur in the United States. Some of these might come from the non-profit side, and even more might come from appropriate support for the National Endowment for the Arts. But let’s not think good theatre is New York’s alone. Broadway is just one star — perhaps a more visible one — in the wonderful constellation of theatres in the US.

  • LA Producer says:

    OR do what we’re attempting: Put the play/musical on HD video and see if people like it! Take advantage of tax breaks from both the Feds and State. If we’re lucky enough to place on TV (Ovation, PBS, Bravo, Logo, etc.) we’ll build an audience for live stage productions. Even a DVD or NetFlix download that goes viral might do the trick. Disney makes it work; why not a bright young guy named Davenport?

  • Bob Degus says:


    Greetings from the West Coast… I really appreciate your posting and the issues it raises.

    I believe the real question, is what value do we AS A NATION place on the arts as a whole?

    And secondly, how can we as artists working in the performing arts (film, theatre, opera, music, etc.), educate the nation and its legislature about the important role the ALL THE ARTS play in our country and culture. Not just the one with the biggest lobby or most theaters.

    Certainly Broadway in general, and the Broadway Musical in specific, are about as genuine an American Art form as there is. You are right, Broadway and Broadway theaters DO exist as a physical place that can’t move to other areas, but the reality is that THE ART FORM called the Broadway Musical IS transportable; to London, Australia and many points beyond.

    The real tragedy will come when America is no longer the creative center of the very art form it created.

    What few understand in this incentive/tax rebate discussion is that BOTH Broadway and the film industry require a healthy and diverse base of actors who can (somewhat) expect to support themselves from acting work.

    Out of a healthy and diverse base of actors, (and obviously an equally diverse and talented artists who costume, design, light, shoot, write and direct them) comes the creation of a diverse set of productions or stories about whom we are as a country and people.

    Just imagine if every female lead cast in a Broadway show was Ethel Merman? After a while… not very exciting. Thus, a wide range of actors is essential and that can only come from a healthy industry.

    As a LA based film producer/director, I can tell you that the reality of film production leaving Los Angeles for points elsewhere, is real. It’s real threat to the health of Hollywood film industry. The incentives are needed because the incentives/rebates exist elsewhere. One need only look at the fact that Los Angeles has lost 16,000 film jobs over the past five or six years.

    But it’s more than the loss of jobs… it’s the loss to the art form of filmmaking as talented people who once made movies leave to do other things… like bake bread.

    “Who cares?” one might say. But it’s like losing colors of the rainbow. In film, and on Broadway, we make art through huge collaborations of many hundreds of people contributing. When those people can no longer participate in the creation, the art suffers, just like painting would if suddenly cadmium blue no longer existed.

    Film and Broadway/theatre are both businesses AND art forms. There certainly is a business argument to be made about these incentives, but there is also an artistic one that is just as important and often remains unspoken.

    I think it’s time that WE as the artists who make and care about performing arts come together and educate the nation on our collective value, because whether we work in film, or theatre, or opera, or music, we all share a common love of story telling, or said another way, the love of moving the human heart.

  • brian estwick says:

    mr davenport, although there certainly is an important hollywood/tv/film business lobby, i submit to you that the television and film business employs AND REACHES far more regular americans than broadway which, regrettably, with its wholly out of touch, astronomical ticket prices and access possibilities for REGULAR americans, has disconnected itself from the common american experience. the broadway theater world is, like the world of fine art, an extremely specialized arena and experience by both design and expression, and, in my view (and i say this as a writer who’d still, certainly, love to have a play of mine play in that arena), isn’t deserving – particularly in these lean, lean, lean economic times – of getting federal tax breaks.

  • Richard Seff says:

    Ken I took your advice, looked to my childhood, and wrote SHINE! for my Ma gave me a copy of Horatio Alger’s RAGGED DICK when I was about eight, I devoured it, and it supplied me with a mantra for life. I know SHINE! will do the same when it’s finally on Broadway. It’s not too late. You could join us for the journey. It’ll be fun = and hugely profitable. Happy New Year! Richard Seff .

  • Frank Gershwin says:

    Just pay your fair share and quit whining. I can’t believe that I’m reading tripe like this asking for government handouts/breaks because creativity is so “important”. If what you produce has value, the market will ensure it survives and that those involved are fairly compensated for it.

    You don’t see it, but you are just the next textile industry, auto industry, everything else industry. You are in the midst of being outsourced and are too stupid to realize it. More subsidies, breaks and arrogance will only accelerate the decline of your industry.

    Of course, your money is good in Washington today…

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