Record Profits for Warner Bros. Doesn't Stop State From Giving Company Huge Subsidy

Movie company made $1.2 billion; Michigan taxpayers to give it $35 million

Comment Print Mail Share Facebook Twitter

While Michigan taxpayers prepare to dole out $35 million to Warner Bros. for the filming of the expected blockbuster Superman-Batman movie sometime early in 2014, the company could be in for record profits. 

In 2012, Warner Bros. had an operating income — profits that exclude interest and income tax expenses — of $1.2 billion, according to The Hollywood Reporter. That's about the same amount the state of Michigan gives in general fund dollars to higher education and community colleges.

Warner Bros. is projected to spend $131 million in Michigan while filming the Superman-Batman movie, according to the Michigan Film Office.

"The question of why such a profitable industry needs such a leg up is an interesting one," said Scott Drenkard, an economist with the Tax Foundation, a tax policy think tank in Washington, D.C. "I don't think the film tax credits are good policy."

Drenkard said when a company like Warner Bros. gets a tax break, other businesses that aren't favored by the state have to pay more.

Michigan's film incentive pays up to 35 percent of expenditures made in state by a production company.

Politicians like film credits because the credits give them a chance to rub shoulders with celebrities, Drenkard said.

Stay Engaged

Receive our weekly emails!

As an example, he cited a situation where Maryland Gov. Martin O'Malley posted a photo in November on his Facebook page of himself with Seinfeld actress Julia Louis-Dreyfus while she was filming HBO's "Veep" in Baltimore.

In 2008, filmmaker Michael Moore questioned the logic of giving billionaire dollar corporations millions of taxpayer dollars via film credits.

"These are large, multinational corporations — Viacom, GE, Rupert Murdoch — that own these studios. Why do they need our money, from Michigan, from our taxpayers, when we're already broke here? I mean, they play one state against the other, and so they get all this free cash when they're making billions already in profits. What's the thinking behind that?" Moore asked at a film festival in Traverse City.

However, that didn't stop Moore from taking more than $840,000 in Michigan taxpayer dollars from film credits for his own movie, "Capitalism: A Love Story," which criticized special deals from government to corporations.


See also:

Five Reasons Government Subsidies For Films Are A Bad Idea

Box Office Bombs: Made In Michigan

Film Incentives: The $50 Million Sequel

Hollywood Transforms Itself to Milk Multiple States For Movie Money

Public Employee Pension Systems Raided To Pay Film Studio Bills

Big Hollywood Bailout: Taxpayers Spent Nearly $40 Million To Subsidize Disney's 'Oz'

Cost of Film Program Could Repair Over 5 million Potholes

State Paying For Films From Here To Eternity?


Related Articles:

'Batman vs. Superman' Swings Super Subsidy Deals from Multiple States

Michigan Chamber CEO Blasts Film Subsidies as a 'Boondoggle'

State Film Incentives are the Real 'President Business' Villain

Why Politicians Love Film Subsidies

Michigan Households Paid $9 Each for Batman v. Superman

Michigan May Send Film Credits to the Cutting Room Floor

Stay Engaged

Simply enter your email below to receive our weekly email:


Jim Riley got his own fiscal house in order so he could retire. Now he wonders why his city government can’t do the same for their employees, and taxpayers who could end with huge bills from the unfunded retirement liabilities.

Related Sites