Negotiating with Extortionists. Martin O'Malley makes a deal with Francis Underwood

As readers of this blog know, MOCO Musings has not been a fan of the tactics employed by the Netflix show House of Cards (HOC) to increase its tax credits from the state of Maryland.  (The show shoots in Baltimore, Annapolis, and Harford County).

To date, the show has received 26.6 million dollars in tax credits during its two seasons.   At the start of the year, the show's producers made a 'pitch' to increase their tax credits for the upcoming (3rd) season of shooting.

HOC used a combination of soft and hardball tactics. On the softer side, Kevin Spacey visited the state to host a cocktail party and pose for selfies with groupieselected officials.  On the hardball side, the show's producers sent Governor O'Malley a stern letter warning it might leave the state if bigger tax credits were not forthcoming.

In April, the Senate approved an increase of 15 million dollars, but the house wanted a smaller figure and an agreement that the state could use eminent domain to seize film equipment if the show left after receiving tax credits.  The two sides couldn't agree, and the Assembly closed before a deal could be reached. 

In walks Martin O'Malley to 'save' the day.  The show will now receive 11.5 million in tax credits for its third season.  It is unclear exactly where the money is coming from (since the General Assembly didn't vote for it).  But, state 'grants'  appear to be in the mix. 


The amount is less than what the show received for its first two seasons (about 13 million for each season), but a lot more than many people thought it deserved.

What's the lesson here?  For his part, the governor chose to downplay the previous conflict, relying on a too cute by half press release that began:  "Spoiler alert: we’re going to keep the 3,700 jobs and more than 100 million dollars of economic activity and investment that ‘House of Cards’ generates right here in Maryland."

Another way to look at it is this:  you can negotiate with extortionists for a markdown.  

All of this reminds me of another TV show set in Baltimore, The Wire, and a character on it, Tommy Carcetti.  Rumor always had it that Carcetti, a city councilman with mayoral ambitions, was based at least in part on Martin O'Malley.  Carcetti was an idealist whose mayoral ambitions got in the way of his idealism.  Whether or not the rumor is true, it seems apt today.   

Watch Out Francis Underwood. MOCO ain't afraid to throw you off the platform!

Oh, that poor Francis Underwood.  First, his mistress turned on him, then his chief of staff got bonked on the head by a former prostitute.  And, let's not even mention that little unpleasantness in the parking garage during the first season.

Francis' latest nemesis?  The Maryland House of Delegates.  They just gave him a new pair of Francis Underwood cufflinks.

At this point you non-DMV readers (I suspect I can count you all on one hand, but I love you all!) are probably wondering where I'm going with this.  It turns out that House of Cards isn't actually filmed in DC.  It is filmed in Maryland, mostly in Baltimore, Harford County, and Annapolis. 

And, those poor sods who produce House of Cards tell us they'll have to get in a bread line leave if they don't get another round of tax credits.  That's right, the guys who brought you Francis Underwood are playing hardball.  They are threatening to move production out of Maryland and find some pretty row houses elsewhere if the requested tax credits aren't forthcoming.  Keven Spacey even came to Annapolis to make the case. 

According to the Washington Post Maryland is allowed by law to allocate 7.5 million to movie/TV production in the state.  Last year a special dispensation was passed that allowed greater amounts of tax credits.  With the one time additional allocation, House of Cards got 11 million in tax credits in its first season and 15 million in its second season.  It is now asking for more credits in its 3rd season, although the Post reports the production company hasn't stipulated how much it will need. 

Which brings us to Delegate C. William Frick (D-Montgomery County).  No, he didn't off anybody.  But he did swat the ball back in the House of Card's court with a loud thwack.  Specifically, he introduced an amendment (read it here) to an unrelated bill  that basically gives the state the right to use eminent domain to seize production equipment of film companies who leave the state after having received the tax credit.  And, it passed easily. 

So, which Francis Underwood should we support?  I'm going with Frick.  I doubt he'll off his opponents, for starters.  I also expect he's thinking about the state's interests more than the House of Cards Production team is.  In fact, I haven't seen anything yet to convince me that House of Cards is losing money.  At some point, corporations, even those in Hollywood who can usually get away with this stuff because everyone assumes they are progressive, need to suck it upbehave more responsibly. Contributing to the Maryland economy while also making a profit should be enough.  The Maryland folks who work on your crews are just as important as your investors.  Do you really need another yacht? 

Corporate welfare is unattractive, even if Kevin Spacey is the one whipping the votes in support of it.