Bloomberg News

‘House of Cards’ in Setback as Maryland Balks at Bigger Tax Deal

April 08, 2014

"House of Cards"

Kevin Spacey and Robin Wright star in "House of Cards." Photographer: Melinda Sue Gordon/Netflix via Bloomberg

Actor Kevin Spacey, who plays a manipulative Washington powerbroker in Netflix Inc. (NFLX:US)’s thriller “House of Cards,” suffered a real-world political setback.

In the closing hours of Maryland’s legislative session, lawmakers defeated a measure that would have steered an additional $3.5 million into tax credits for companies that produce movies and television shows in the state. “House of Cards,” shot in and around Baltimore, has received the biggest share of such credits and stood to gain the most from the increase.

The vote wasn’t a complete defeat for producers of the Emmy-winning political drama. The state budget already earmarked as much as $15 million for the tax credits in the year that begins in July, twice as much as was initially allocated.

“Down here, you don’t always get what you want,” said Delegate Frank Turner, a Democrat who sought to boost the sum to $18.5 million. “It’s all about the art of compromise.”

Megan Duzi, a spokeswoman for Media Rights Capital, said she didn’t know her client’s plans. Media Rights Capital, a Beverly Hills, California-based independent studio, threatened to shift production to another state if the tax credits didn’t come through.

The vote in Annapolis late yesterday capped a lobbying effort that could have been cribbed from the show’s script.

The producers hired one of Maryland’s top lobbyists, Gerard Evans, and invited every state lawmaker for drinks at an Annapolis wine bar, where Spacey charmed legislators to win support for the show. Cynthia Busch, wife of Democratic House Speaker Michael Busch, landed a bit role as a U.S. senator in the second season.

State Incentives

Most states provide tax breaks and other incentives to attract movie and TV productions, which bring in money that trickles down to set designers, caterers and extras.

The taxpayer dollars will defray some of the $175 million that “House of Cards” has spent or plans to spend in the state by the end of three seasons of filming, according to the Maryland Business and Economic Development Department.

Democrats who supported the measure argued that luring film companies to the state provides an economic boost, creating jobs for thousands who work on the productions. “The benefit is the jobs,” said Turner, the Democrat delegate.

While the House of Delegates voted 88 to 47 to approve the extra funds for the tax credit, the measure stalled in the Senate, where lawmakers resisted provisions that would let the state claw back money if needed. Some House Republicans criticized steering taxpayer money to filmmakers without any guarantee they would keep shooting in the state.

Threat Rankled

Busch, the House Speaker, told reporters that some lawmakers were rankled by the show’s threat to leave the state.

“I think a lot of people took it pretty poorly,” he said.

Governor Martin O’Malley told reporters that he watched the show on an airline flight and he preferred Time Warner Inc. (TWX:US)’s HBO series “Veep,” which is also shot in Maryland and receives state aid.

O’Malley said he didn’t know what the “House of Cards” producers would do after the larger increase failed to pass.

“Everybody always threatens to leave if they don’t get what they want,” he said.

To contact the reporter on this story: William Selway in Annapolis, Maryland at wselway@bloomberg.net

To contact the editors responsible for this story: Stephen Merelman at smerelman@bloomberg.net Pete Young, Rosalind Mathieson


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