It is possible that the real culprit is Universal Studios, not Davis Entertainment. DE probably sold what rights it had to Universal, who financed the movie through its slate deal with Relativity. Universal made a budgetary decision to to shoot the film in Illinois not only because of the football facilities, but also because the Illinois State Film Tax Incentives, at the time of shooting, were much better (and still are) than those offered by the great State of New York.
In Illinois, a production company can obtain a 20% transferable tax credit for all of its Illinois production spend. On a $40 million budget, that's $8 million that it can either pre-finance for a discount, utilize for its own Illinois State tax liability or sell to another Illinois corporation or resident and take some action on the sale.
In NYS, in 2007, if Universal decided to shoot the film in Elmira (or anywhere outside of New York City for that matter), the tax incentive would have only been a 10% non-transferable tax rebate, not a credit, and the 10% does not apply to any of the above-the-line expenditures (i.e., star salaries, etc.), only "certain" below-the-line expenditures. Further, it would have been difficult to pre-finance because, it being a non-transferable rebate (cash), as apposed to a transferable tax credit, there would have been no market for it if Universal wanted to sell it. What this means is that the 10% ends up being more like 6% or 7% which, on $40 million, is only about $2.8 million at most.
Therefore, the actual budget for Universal in Illinois was probably more like $32 million. In NYS, that budget would have been $37.2 million. That $5.2 million is the reason why Universal (i.e., Davis Entertainment) shot in Illinois instead of Chicago.
The NYS program was changed by Albany in May 2008. The NYS tax rebate is now 30%. This puts it on par with Connecticut and Massachusetts, which have two of the best programs in the Northeast. The new program is not much better for upstate NY however. Although the percentage of the rebate went up by 20%, the program heavily benefits the networks and studios (i.e., Dick Wolf) who get an extra 5% (i.e., 35%) if they shoot their projects in NYC. Also, the rebate is still only on "certain" below-the-line deductions AND it is still a rebate and is non-transferable.
The failure of NYS to add above-the-line deductions as part of the rebate and to make the inventive a transferable tax credit instead of a rebate, will keep most independent projects (and studio) going to NYS's sister states because of the better programs offered by those states. Connecticut is 30% on all expenditures, and the credits is transferable (although the market for the credit is small). Massachusetts is 25% on all expenditures and the credit is transferable. Coupled with the fact that it is cheaper to shoot there instead of NYS, both Massachusetts and Connecticut have a deep crew basis that will keep productions from coming to NY.
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