Agencies and Producers Back U.S. Tax Incentive as ‘First Step’ Toward Hollywood Recovery

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A coalition of Hollywood talent agencies and independent producers said Thursday that it supports the proposed U.S. tax incentive for film and TV production as a “first step,” but that more will need to be done to revive the industry.

The American Entertainment Alliance — which includes CAA, WME and UTA — is pushing for a revival of the fin-syn rules that allowed independent TV producers to thrive in the 1970s and ’80s.

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But that goal risks complicating the campaign for a 20% federal incentive for domestic production, which has broader industry support and which advocates hope will pass by the end of the year.

The alliance — which also includes indie producers such as Blumhouse, Imagine Entertainment and MRC — emphasized that it is in “strong support” of the tax incentive, though it also said it will push for tweaks to make it more favorable for independents.

“This legislation is an urgent first step toward bringing production jobs home, and with targeted adjustments, it can also help level the playing field for independent producers,” the AEA said. “We will work closely with lawmakers and industry partners to strengthen the bill and shepherd the measure through the legislative process.”

The AEA announced its existence last week with a New York Times story in which agents and producers pushed for legislation to require streamers to buy 50% of their original content from independent production companies. The group argues that such legislation, which would also include time limits on exclusivity windows, is needed to restore competition and creativity in the TV business.

Though these ideas have been bandied about for the past year, they were not included in the federal tax credit bill introduced in Congress in September. In the statement, the coalition made clear that its goal is to pursue its legislation on a separate path in the next Congress.

“A tax credit alone will not restore a competitive American marketplace,” the group said. “That is why the AEA is advocating to restore a competitive American film and television market by pushing both for production incentives and a modern approach to creative ownership for the streaming era. We look forward to working with lawmakers and our counterparts in the 120th Congress to promote policies that expand opportunities for independent producers, strengthen competition, and let creators retain and reinvest the long-term value of their work.”

The federal incentive proposal includes a 5% bonus for independent productions. In the current bill language, an independent producer is defined as any company that is not publicly traded.