As it stands, the current proposed bill SB630, which is dated February 20, excludes most of all unscripted television.
PAGE 9: (ix) For taxable years beginning on or after January 1, 2025, and only for purposes of the credit allowed in subdivision (k), a large-scale competition show, not including traditional reality, game shows, talk shows, or documentary television programming, that is produced in California, with a minimum production budget of one million dollars ($1,000,000).
This stance is not competitive on a national and global scale as so many game shows, reality shows, and talk shows are leaving California in pursuit of tax breaks abroad which do offer these types of programs attractive incentives. There is good reason to believe that these types of unscripted programs will serve a vital role in the future media landscape.
We all know that the streaming model has disrupted the traditional film and tv model in a variety of ways. But it’s also disrupting itself. Many of these new streamers are struggling a great deal to be profitable. Apple TV + reportedly lost 1 billion dollars last year. As Fox enters the streaming market this Fall and CBS works through its merger with a new boss that comes from big tech, streamers will have to balance their content and risk across genres. They are already acquiring sports, which tend to pair well with Talk Show analysis. While tent poles like Severance and Stranger Things will still be attractive, entities simply can’t be profitable by dedicating too much resource to them.
Over the next few years streaming is going to start to resemble cable more and more. This means balancing tent pole scripted content with unscripted. In some cases, this literally means a talk show that talks about the scripted or unscripted show.
I understand the idea behind saying that a show needs to spend 1 million per episode to qualify for the credit. California wants programming that has a large enough economic impact. But let me propose a small adjustment that allows unscripted programming to also make a sizable impact in California.
My Proposal: Traditional reality, game shows, talk shows, or documentary television programming shall qualify for a relative portion of the credit upon reaching the 1,000,000 dollar benchmark per qualified entity. The qualified entity shall receive additional relative portions of the tax credit per each 1,000,000 dollars spent on such programming over the course of the year.
In a nutshell, what I’m trying to say is that most forms of unscripted programming are not going to spend $1,000,000 per episode. So, for these genres which are leaving California in a big way, let’s incentivize the studio to bring as much of their unscripted content back here to qualify for as much of the credit as possible. Fox could bring one game show to California that spends $7,500.000 and qualify for $7,000,000 worth of the credit. Or they could bring ALL of their game shows back, let’s say spend $26,500,000 per year and receive $26,000,000 worth of the credit. This method ensures that unscripted content can have a large economic footprint for the California entertainment industry.
This method also future-proofs the rise of Youtube, who’s content is vastly unscripted. Just today, Variety reported that Youtube is the new king of content with a total valuation of 550 billion dollars. Its creators are becoming full fledged production studios. By restructuring the bill in this way, we are incentivizing the future of media to business in California.
If you’re reading this, then know that I can’t get this message out alone. Please share with your representative and engage. The bill is being debated and crafted as we speak!
Sincerely,
Eric Kenehan
Unscripted Editor