News Story

Michigan Film Subsidy Winner Costs 10x More to Make Than It Earns

When advocates of the Michigan film tax incentives said the 42 percent subsidy would attract moviemakers, “House of the Rising Sun” was likely not what they had in mind.

Filmed in Grand Rapids, the movie is based on a novel that was set in New Orleans. It has made only $100,000 in DVD/Blu-ray sales, but got about $435,000 from Michigan taxpayers.

The movie featured former WWE wrestler Dave Bautista. The plot is about an ex-con trying to clear his name after a murder in a nightclub in which he works.

Louisiana says its tax incentives “lead the nation.” But Louisiana can’t compete with Michigan’s 42 percent subsidy that is given to moviemakers for expenses incurred in the state.  Louisiana offers a 30 percent incentive for total in-state expenditures. An additional 5 percent labor incentive can be earned on the payroll of Louisiana residents that are employed by a motion picture production company.

Makers of “House of the Rising Sun” spent just over $1 million in Michigan and received $435,874 in tax incentives, according to the Michigan Film Office. Had it been filmed in Louisiana, it would have received about a $327,816 reimbursement, more than $100,000 less than Michigan’s deal.

So Michigan won out.

“And that’s OK,” wrote The Times-Picayune movie reviewer Mike Scott. “Michigan can have the credit for this one.”

The author of the novel was reportedly not happy that the film setting was switched from New Orleans — the setting in his book — to Grand Rapids.

“I guess there was just no way to pretend it was New Orleans because you can’t hide the fact that it’s snowing like crazy,” said Chuck Hustmyre, who wrote the novel and screenplay. “But I’m a first-time screenwriter, so I got no say in it.”

The movie had a reported $1.5 million budget. According to The Numbers, a website that tracks movie financials, it reported no box office earnings and has sold about 5,000 DVDs/Blu-rays for about $100,000 since its July 19 release.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.