Future of 'Nashville' Rides on Synergy, Hollywood's Hunger for Tax Incentives

Future of 'Nashville' Rides on Synergy, Hollywood's Hunger for Tax Incentives

The reason for the behind the scenes drama with ABC’s Nashville is less about ratings and more about economics and Hollywood’s lust for tax breaks.

The show struggled with a drop in viewers in its second season. However, two other factors contributed to the decision to extend the program.

The ratings dip is slightly offset by the ancillary revenue the program receives in other markets. Three albums featured on the show have been released, with a fourth coming out soon, and some cast members participated in a tour to support both the show and albums. An additional season will provide more opportunity for these outlets and for much better positioning to go into syndication.

The other issue that ABC was looking at is the condition of shooting in the namesake metropolis. For the first two seasons the production has benefited from a Tennessee tax incentive program. There are differences to what took place in Maryland, where the production of House of Cards threatened to pull out of the state if it did not receive a set amount of tax rebates. In the case of Nashville the producers are facing a cut in the amount of tax incentives they have been receiving. State politicians have slashed the budget of payouts to productions filming inside Tennessee.

According to the document from Dept. of Economic and Community Development the first season of Nashville received just over $8 million from the state (this includes funds for the pilot episode). The just-completed season saw $12.5 million in tax payouts, against what the report indicates a production budget spent $70 million inside Tennessee.

Another factor for the state to consider; a survey by the Nashville Convention and Visitors Corp. found that of tourists to the city familiar with the program 20 percent cited it as the inspiration for coming to visit.

A primary reason that the show has the ability to become mobile is while it films directly inside of the city of Nashville it does not rely exclusively on area establishments for its setting. Primary scenes in nightclubs for instance are not location shoots but take place on sound stages, which can become portable and brought to new states. One possible new location mentioned has been Austin, Texas.

Currently the situation rests with the Tennessee legislators. Tennessee’s DECD stated they were awaiting news on the prospects of the show.

The department looks forward to receiving a grant request from the producers of Nashville once the show is renewed for a third season,” spokeswoman Laura Elkins said. “Talks about the incentives are ongoing, and the department is working to make a third season happen in Tennessee with the funding we have available.”

Now that ABC has signed off on season three the legislators weigh the decision on whether the economics of continued tax incentives makes fiscal sense for the state.