The Oscar season is upon us, when many of us want to forget the grim news and enjoy movies that can take us to a new reality. On Sunday, we will make ourselves comfortable to celebrate those films. But when we do, let’s not forget that the movies we honor were supported with public money, our money.
As in previous years, this year we decided again to see how much in state subsidies the best picture nominees received. Most often, production companies collect cash payments from states (structured as refundable or transferable tax credits, or direct grants) that are equal to a percentage of a production costs in a state.
In our upcoming 51-state “report card” study on transparency of state subsidy programs, we found that, out of 29 film production programs we examined, 14 do not have any recipient disclosure. That is, we know very little about which production companies received tax breaks or how much. Those states that do disclose film subsidy recipients usually provide only the ambiguous names of Limited Liability Companies (LLCs), created specifically for a single project.
All six nominees filmed in U.S. were made in states with film production subsidy disclosure. Still, we uncovered very little on how much these films got. There are three reasons why: the production companies didn’t apply for subsidies – doubtful; a movie will appear in disclosure documents sometime in the future – most likely; or the production company applied for the subsidy under an ambiguous LLC name – also likely.
Four of the best picture nominees were filmed abroad, where many countries provide film production subsidies, too. The European Union has a good subsidy control and transparency system, but it seems not to apply to film subsidies. Hungary, which had a subsidy equal to 20% of qualifying expenditures, increased it to 30% after other countries created their own programs.
Movies made in the U.S.:
- CODA and Don’t Look Up were both filmed in Massachusetts. The state discloses film subsidy recipients, but with a long-time lag. Let’s check back on the state’s disclosure documents in a year or two.
- King Richard and Licorice Pizza were both made in California, in the Los Angeles region. California discloses that King Richard got $7.6 million in subsidies but we found no mention of Licorice Pizza in the disclosure documents.
- Nightmare Alley was filmed in Buffalo, New York and in Toronto. We found no mention of the movie in the New York state disclosure documents – at least by that name.
- West Side Story was made in New York City and New Jersey. We found $6.9 million from New Jersey but no mention of the movie in the New York state documents.
Movies made around the world (we have not attempted to search for any official disclosures for those countries).
- Belfast was filmed in England and Norther Ireland, where subsidies equal 25% of qualifying expenditures.
- Drive My Car was filmed in Japan, which offers a rebate of 20% of qualifying expenditures.
- Dune was filmed in Hungary, Jordan, Norway, and United Arab Emirates. All those countries have film subsidies.
- The Power of the Dog was made in New Zealand, which is famous for its lucrative (40%) film subsidies (apparently Montana’s tax breaks and mountains were not good enough for the producers).
Film production subsidies are very expensive tax breaks enjoyed mostly by large movie studios and production companies. Audits consistently find that these programs have negative returns on investment: for every dollar spent on those subsidies, states recoup only 7 to 14 cents. The projects create temporary jobs and one state paid $100,000 for each of those jobs. And on top of that, they have poor transparency.
When the best picture is announced on Sunday, let’s make sure we congratulate ourselves because we helped pay for making those movies.