The Ugly Side Of NY's Film And TV Tax Credit 'Trough'


This week the New York assembly voted to approve $350 million to fund a 30% tax credit for movies and TV shows made in-state, extending a program that last year led to such a flurry of filming that the Empire State burned through its entire $460 million fund in 10 months.

HBO’s In Treatment was one of the shows that took advantage of the tax credit to move from Los Angeles to Manhattan, where shows actually get a 35% break because of the city’s separate 5% tax-incentive program.

In a Q&A, the series’ executive producer and showrunner Warren Leight explains how the tax credit helped In Treatment make the move and what the new, smaller fund means for the future of filming in Manhattan, as long as that lasts.

The Business Insider: You said the tax credit helped In Treatment rationalize the move to New York. How so?
Warren Leight: [Lead actor] Gabriel [Byrne] wanted to move the show back to his home. I think had those tax credits not been in place, they wouldn’t have been able to do it. A show like ours doesn’t have a big cast, so a lot of the money goes toward producing the show. Getting that 35% tax credit made the cost of the show comparable to doing it in Los Angeles.

TBI: Is it more expensive to shoot in New York than in Los Angeles?
WL: Certain things are. Studio space: The studios own their spaces in California. [In New York,] you’re renting a massive stage year-round and that’s extremely expensive. Things like parking, electricity—to air-condition a stage costs a lot more in New York than it does in Los Angeles, and when you’re talking about a space that size, the electric bill is sort of stunning. In New York, you have to garage [your actors’ trailers] and the car that takes [your star] to work. So, suddenly you’re easily spending $10,000 a month on garages, and that’s money you don’t have to have in Los Angeles and other cities. There are reasons to shoot here but cost was always an excuse for people to avoid [that], and the second that was taken away, it made a profound difference.

TBI: It seems like there is going to be additional money added to the tax credit program, like $350 million. How do you feel about that as the solution the state came up with?
WL: It’s as imperfect as everything else the New York state government is doing. I think it will be good for movies. The problem is that movies are carpetbaggers: they come in, they go out…TV shows, you’re providing steady jobs for 8 or 9 months. [The $350 million fund] makes it harder for TV shows to move to New York, because you don’t know if that [tax] break will be there next year and no one wants to move back. In an ideal world, there should be an open credit because every time someone taps into it, they’re creating jobs. The only purpose the cap serves is to make people anxious and to make sure the first pigs at the trough get fed first. So, certain shows that know how to play this game will wipe that out pretty quickly. What you want to do is encourage new productions to come to this city and widen talent. One of the ideas that was floated a few years ago was that after a show reached its fifth season, it wouldn’t be eligible for the credit. I think it’s hard to argue against that: By then, the show should be in syndication and there should be other sources of revenue. Or it could get a smaller credit five or seven years in.

TBI: Do you think the networks will factor the new money for tax credits into their decisions about whether a show gets renewed or not?
WL: If a show’s on the bubble, it’s one more factor. If it’s a $2 million-3 million an episode show and you’re not sure about [renewing] it, and you’ve just been told that there’s a tax credit that could save $400,000 an episode, that has to influence the decision. If you can produce 22 episodes for under $50 million as opposed to for $60 million, that has to be better. Last year, Law & Order: Criminal Intent was absolutely on the bubble (no one knew if it was coming back or not). And the tax credit was why they didn’t pull the plug on the show. It probably saved that show $500,000 an episode and that made the difference between that show having a seventh season or not.

TBI: And you think the credit will make the networks more willing to keep these shows in New York?
WL: I think it has to. Shows that they would have moved or pulled the plug [when they thought there would be no new money for the tax-credit program], this has to at least give them pause.

TBI: How do you think this new funding will affect decisions about In Treatment‘s third season?
WL: We don’t know yet if there will be a third season of In Treatment. I would imagine, it helps make the case for continuing in New York. I don’t know who would make the argument to move the show now that the credits have come back. But the question is: when will HBO make that decision and [if the show gets renewed] will there be anything left in the credit?

TBI: Do you think there will still be money in the fund when you would begin shooting a third season?
WL: I would hope. I mean, they went through what like $500 million in less than a year, and it takes people a while to react now that the pilot season is gone. Presumably, if there’s less production going on…that has to last at least half a year. There’s no way that much production moves to New York that quickly. That should last until autumn, late autumn, at least you’d hope. But what it means is there will be no money for pilot season next year unless they augment it later on. If you do the maths in your head, [you can figure out that] they’ll run out of money around the time pilots start getting their pickup orders. They went through roughly $40 million a month [last year]. So nine months from now, you’re just around pilot season, and they’ll be out of money.

Warren Leight is the executive producer and showrunner for HBO’s In Treatment, the second season of which premieres Sunday at 9 p.m. A New York City native, Leight has spent his career working on plays, movies and TV shows in Manhattan, including writing and producing Law & Order: Criminal Intent from 2002-2008, serving as showrunner for two seasons. He won a Tony for his 1999 play Side Man, which was also nominated for a Pulitzer Prize.

Photo from The Writers Guild of America, East Web site

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