What Showbiz Gains from D.C.’s End of the Year Budget Bills
President Obama was expected to sign massive spending and tax bills that passed Congress on Friday that include a host of provisions that impact entertainment and media, including an incentive for movie, TV and stage production and a rollback of FCC regulations on media ownership.
The budget deal also includes provisions of the long-debated Cybersecurity Information Sharing Act, known as CISA, a controversial measure that will expand the ability of private companies to share information on cyber threats with federal agencies.
The legislation is a $1.15 trillion spending bill, and a bill that includes $620 billion in tax breaks and credits.
In a press conference, Obama said, “I’m not wild about everything in [the budget bill], but I am sure that is true for everybody.”
Media ownership: Broadcasters scored a big win with a provision included in the legislation that allows stations to continue to engage in joint ad sales arrangements, something that the FCC has said was a way for major station groups to skirt media ownership limits. The FCC limited so-called joint sales arrangements last year, but now any stations that had such agreements in place as of March 31, 2014, will have a decade more to dissolve them — until 2025. The congressional action to rollback the FCC’s action had the support not just of Republicans but Democrats like Sen. Chuck Schumer (D-N.Y.) and Sen. Barbara Mikulski (D-Md.). Dennis Wharton, spokesman for the National Assn. of Broadcasters, said that the FCC was engaging in “punitive regulatory overreach,” and that the rule “would have unfairly harmed millions of local television viewers.” An FCC official declined to comment.
Cyber-security: A year after the Sony hack, the government now has more tools in its toolkit. CISA was strongly opposed by privacy advocates and some tech firms, but it was rolled into the year-end budget bill. Supporters believe it is needed to enable private companies to share information — with liability protection in certain cases — with the government and take action against hacks and data breaches. The U.S. Chamber of Commerce said that CISA “is our best chance yet to help address this economic and national security priority in a meaningful way and help prevent further attacks.” But the Center for Democracy and Technology says that the legislation “permits information shared under the bill to be used for a myriad purposes completely unrelated to cybersecurity, including prosecuting espionage and trade secrets violations and other crimes.”
Showbiz Incentives: Section 181, a provision of the tax code that has allowed movie and TV producers to immediately deduct production costs up to $15 million, was once again extended, to 2016. Interestingly, Congress continued their practice of retroactively extending the tax break, to expenses from 2015, a practice that has been criticized for making it difficult for producers to depend on the incentive in budget calculations. But the big breakthrough for showbiz this year is the inclusion of Broadway and live theatrical productions in the tax break for the first time.
Cadillac tax delay: The Writers Guild of America West had been among the labor groups fighting a long-delayed provision in Obamacare from taking effect. That is the “Cadillac tax,” which would impose a 40% excise tax on more expensive health insurance expenditures in higher-quality plans. The intent of the tax was to help limit the rise in healthcare costs and also help fund the Affordable Care Act. “While today’s news is welcome, it only reinforces the necessity of further action from Congress – not just to delay, but to repeal,” said Howard Rodman, president of the WGAW.
Public television: The budget deal includes $445 million in funding for the Corporation for Public Broadcasting, which helps fund PBS, NPR and public broadcasting stations. That funding is actually for fiscal year 2018 — an advanced appropriation is typical — and maintains the level of government funding for public broadcasting in recent years. Given that public TV funding can become a target in a presidential election year, as it did in 2012, public station lobbyists are typically relieved when an appropriation goes through without much high drama. Congress also approved $40 million to upgrade public broadcasting’s interconnection system.
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