'Tonight Show's' NYC Move To Save NBC $20 Million in Tax Credits
A THR analysis shows that while producing Jimmy Fallon's show at "30 Rock" will cost more, the difference will be handily offset by incentives.
This story first appeared in the May 3 issue of The Hollywood Reporter magazine.
When Jimmy Fallon takes the host's chair at The Tonight Show in February, his first shout-out should be to the state of New York. A THR analysis reveals that NBC could receive more than $20 million in annual tax breaks and possibly more for shooting Fallon's Tonight at 30 Rockefeller Center.
New York's state incentives program was amended this year to provide a 30 percent annual tax credit for talk programs filmed before a studio audience of at least 200, as long as they carry a production budget of at least $30 million and have been shot outside New York for at least five seasons.
NBC declines comment, but a knowledgeable source says the cost to produce Tonight in Burbank is about $1.7 million a week. For a show in production 45 weeks a year, the total cost is about $76.5 million annually. (The production spend doesn't include salaries for the host or top producers. Jay Leno recently took a pay cut to about $15 million a year, and Fallon is expected to make less than that to start.)
Using the $76.5 million production budget, a 30 percent credit would then yield $22.95 million in savings. So while sources say producing Tonight in New York will cost a bit more than in Burbank, the increase will be more than offset by the tax credit. That's key because network sources say Tonight now generates just $30 million to $40 million a year in profit -- a far cry from the $150 million a year the franchise once made.
In addition, there could be more credits to cover building costs on the studio NBC is constructing for Fallon, 38, and for postproduction work, though whether that will happen is not clear. And while the City of New York has not committed to its own tax credits, Tonight will be eligible for the "Made in New York" marketing credit that provides free advertising on NYC bus shelters, subway cards and spots on in-taxi TV programs. That would also include discounts on goods and services NBC purchases from more than 1,000 local businesses.
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