00:00New York Governor Kathy Hochul pushing lawmakers to extend a tax credit put in place during the
00:04pandemic with the hope it will help New York retain its appeal to producers.
00:08As we heard from Bloomberg Tax's Danielle Moyo Dunn, critics question whether the subsidy is
00:14worthy. It really began, like you said, as a way to help these shows when they had no one going,
00:21right? But since COVID-19, Broadway's facing a lot of challenges still, just like how we all
00:29complain about the price of everything going up, that applies to Broadway too, you know, what it
00:34takes to make sets and costumes. So they've continued the program, they've added more funding,
00:39and the idea is to just make it a little easier to fund a Broadway production.
00:45Who's eligible for this? Like when you look at the shows that are on Broadway today,
00:48how many of them are taking advantage or able to take advantage of these credits?
00:52It's a great question because it really is carved out for Broadway and off-Broadway specifically.
00:57So Broadway, you know, shows that are in a Broadway theater, defined as like in the theater district
01:04with 500 seats or more, can get up to $3 million in tax credits. And then off-Broadway productions,
01:11which is, you know, defined a little differently, they're smaller, they can be in elsewhere throughout
01:16Manhattan, can get up to, I believe, $350,000 in tax credits, so a little smaller.
01:22And are there strings attached to that? I know with some of the movie credits,
01:25I think of this more as a movie thing, right? They did it in Georgia, they did it in New
01:28Orleans,
01:28and it was effective there until they pulled the credits, but they also came with a lot of strings attached.
01:34Are there rules you have to follow in order to qualify?
01:36So that's kind of one of the big criticisms of the program. There really aren't.
01:40It's basically, if you meet the requirements in terms of how much you paid for the show,
01:47and it's on a designated Broadway or off-Broadway theater, then you qualify. And there are state
01:54lawmakers and budget watchdog groups who really feel like, you know, this doesn't make sense.
01:59You have money going to shows financed by Disney and billionaires who are getting tax incentives,
02:05and these shows that, you know, have to start in smaller theaters aren't getting support because
02:11they don't qualify. I'm just curious, generally, how Broadway is doing. So we started off by talking
02:16about COVID-19, and we knew well the effects that that had on theater here in New York and elsewhere.
02:22Are we back to where we were? Sort of how much, how big a need, aside from this kind of
02:26competitive
02:26argument that we've been talking about, is there for subsidies like this?
02:29Yeah. So, I mean, Broadway is rebounding since the pandemic. So, according to state comptroller data,
02:37revenue, gross revenue, or sorry, according to state comptroller data,
02:43the attendance is back to pre-pandemic level. The Broadway League has reported that revenue
02:49is the 2024-25 season was one of the highest grossing seasons they've ever recorded.
02:55Wow. So, from that position, they are doing well. But what Broadway producers and directors will tell
03:03you is, yes, but it's getting much harder for investors to see a return on these shows. The
03:11shows are getting more expensive to produce. You know, you have, like, Stranger Things. It was,
03:15like, $35 million, according to forms. Okay, but is this mission creep? I mean,
03:20does it have to be $35 million? Like, I think about Chicago and the fact that, like, the Chicago we
03:26all know now is the very stripped down, you know, no costume changes, bands on stage. That was a
03:32choice, but only out of budget necessity because that was the money they had at the time. There
03:36are ways to do these shows that do not cost $30 million. Is this just kind of playing into that
03:41and making it so that, to your point, these bigger productions, you do spend this much money and
03:44you may not be getting the return? Well, I think it's two things, right? I think, yes,
03:48you're right. They don't, you don't have to put on a $35 million production, right, if you don't want
03:53to. Obviously, if you want to do something with intense special effects like Stranger Things,
03:58it would require that amount of money. You know, what we're seeing more of is actually plays.
04:04You think of, like, Glenn Gary, Glenn Ross, where you have a smaller cast, but you have these big
04:10names attached to it. And that allows them to, you know, see a return faster because really all of
04:18the money is going to these salaries. It's a pretty small production and it's a, it's a better bet for
04:23the producers. Just pull it back to these credits. And you mentioned some of the criticism against it
04:27has to do, you know, with how restrictive they are, not restrictive, I guess. Here we are in New York
04:34State facing a massive budget shortfall of what, $6 billion. What are the other things that critics
04:40are saying about the prospects of this continuing or the need for this to be something that's
04:43implemented in New York? Yeah. So I think the big thing is if it is going to continue,
04:48there should be more strings attached to it. So there's technically a provision that if these
04:52shows are very profitable, they should have to return some of the tax credit, but none have
04:57actually triggered it to date, which is a little confusing because there's definitely shows that
05:01have gotten it and have done well. So that's something state lawmakers feel like maybe we could
05:06tighten up that language. So there are, there is actually some payment back into it. So, you know,
05:13that's something that they're exploring. And I think this is going to be a big conversation,
05:16especially next year, since the benefit is set to expire in September, 20, 27. So
05:21there is a time hook for them to kind of figure it out.
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