Florida tax breaks grow for Electronic Arts [Orlando Sentinel]
(Orlando Sentinel (FL) Via Acquire Media NewsEdge) Sept. 21--When video-game maker Electronic Arts released the latest edition of its venerable Madden NFL franchise last month, the company called it "the culmination of 25 years of innovation." It's also likely to become one of the most heavily subsidized games ever produced in Florida.
New state records show EA has been approved for up to $5.9 million in tax credits to offset the development costs of "Madden 25." The company will also get up to $7.5 million for the latest editions of its college-football and pro-golf games.
EA has received or been pledged $37 million in Florida tax breaks the past three years. That's more than the TV shows "Burn Notice" and "The Glades" got, combined, during the same period. And that has gotten the attention of the film and TV industries, which in recent years have had to compete with "digital entertainment" developers such as EA for the same pot of tax breaks.
EA lobbyists have been deeply involved in rewriting the state's film-and-entertainment incentive law. Now some people are calling on the Legislature to make further changes to the Florida Film & Entertainment Industry Financial Incentive Program in hopes of ensuring that more credits are available to underwrite scripted movies and TV shows.
That effort took on extra urgency this summer when the TV show "Burn Notice" ended its seven-season run and both "The Glades" and a third series, "Magic City," were canceled. The loss of those three productions -- all shot on location in South Florida -- will free up millions of dollars in tax credits previously committed to future TV seasons, and some of that money could now be gobbled up by more EA games.
"It makes good economic sense to create an opportunity for more television shows to come to Florida," said Chris Ranung, president of the International Alliance of Theatrical Stage Employees Local 477, which represents professional film workers.
EA, based in Redwood City, Calif., says the tax credits it has received have been an important part of sustaining its presence in Central Florida. The company produces several sports titles -- including "Madden NFL," "NCAA Football" and "Tiger Woods PGA Tour" -- at its EA Tiburon studio in Maitland, where it says it has about 800 employees.
Craig Hagen, a company lobbyist, called the incentives "an incredible economic tool that is creating hundreds of high-skill, high-wage jobs."
Fueling the tension over EA's ballooning share of the state tax credits is the scarcity of new credits for entertainment productions of any kind. Virtually all of the $296 million in tax breaks that the Florida Legislature has set aside for the incentive program has been committed already.
About $70 million of those credits have actually been awarded -- something that occurs only after a production has been completed and its expenses verified. But the remainder has already been pledged, or "certified," to future projects.
But now, as a result of losing the three South Florida TV shows, the entertainment-incentive program is about to get a sudden infusion of previously committed credits. "Burn Notice," which earlier this month broadcast its series finale on the USA Network, has already withdrawn one application for a future season, freeing up $7.9 million, and should soon withdraw a second one. "The Glades" and "Magic City" will likely follow in coming months.
That could be good news for Electronic Arts, which has become one of the biggest consumers of entertainment tax credits during the past three years.
Since 2010, records show, the Redwood City, Calif., company has been awarded $14.3 million for five games. It has also been certified for up to $22.6 million for five additional games, including as much as $2.3 million for an "NBA Live" video game that it ultimately canceled without releasing.
The video-game giant may also have tax-credit commitments for future projects: State officials will not identify projects that have been pledged incentives but not yet completed, and EA would not say whether it has more games in the credit pipeline.
EA has been so successful in snagging tax credits in part because it helped write the laws that now govern what was once predominantly a film-and-TV incentive program. The Orlando Sentinel reported last year that EA lobbyists worked closely with state Rep. Steve Precourt, R-Orlando, to steer more credits to EA and other video-game developers.
Competing interests are now pushing back. Ranung recently wrote to several state lawmakers, urging them to ensure that any tax credits once pledged to the now-canceled television shows be set aside exclusively for new shows rather than awarded to other types of entertainment.
Another proposal, according to suggestions compiled by the trade group Film Florida, would eliminate a bonus tax credit that was initially written by EA lobbyists for digital-media projects produced in certain studios.
Todd Roobin, the city of Jacksonville film commissioner, said he would like to see more credits funneled to productions that film in underused parts of the state. The vast majority of the credits are pledged to productions in the Miami and Orlando areas.
EA has its own suggestion for the program.
"The most important thing the can be done with the program is to continue funding it and keep Florida's economy growing," said Hagen, the company lobbyist.
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