Market shrugs, but bailout will buoy biz
EmptyThe president has signed that bailout bill that's supposed to save the economy — and it included some fat tax credits for the movie and TV industries — but Wall Street didn't seem to care much.
The Dow and Nasdaq, both up significantly before the $700 billion bill was passed, each ended Friday down 1.5%, and The Hollywood Reporter Showbiz 50, as per usual lately, did worse, falling 2%.
The Showbiz 50 has lost 13% in the past week, while the S&P 500 lost (only?) 9%.
Media is doing so poorly, pundits said, because with the economy hurting, businesses will rein in ad spending. With DVRs and so much new media vying for attention, some worry that businesses that cut back on TV and radio advertising might make their decisions permanent.
The bailout bill is expected to save the film and television industries $487 million over 10 years.
The measures passed Friday have been floating around for months but haven't made it into law despite passing House votes on three occasions since May.
The provisions weren't in the first bailout bill, but they were in the version that passed Friday.
In a nutshell, the new law extends tax benefits that movie production entities have enjoyed since 2004 to distributors as well.
It also will recognize that studios often hire non-W-2 employees, give tax breaks on income from the licensing of copyrights and trademarks and allow for advertising income for content shown on the Internet to be eligible for incentives. Another section, dubbed the runaway production statute, gives tax breaks on the first $15 million of production costs to those filming in the U.S.
The provision also is extended through December 2009 while it otherwise would have expired at year's end, and its benefits are retroactive to January.
The MPAA, DGA and SAG issued statements of support Friday.
"We are extremely grateful that this legislation will help save so many jobs that would have otherwise been sent abroad as a result of runaway production," DGA president Michael Apted said.
Said MPAA chairman and CEO Dan Glickman, "This puts our industry, which employs 1.5 million Americans, on equal footing under the Tax Code with other leaders of the U.S. economy and will help keep jobs and film production here in the U.S."
Added Pamm Fair, SAG's deputy national executive director, "We believe there is no better time than now to support American workers and American jobs." (partialdiff)