May 2 (Bloomberg) -- Move over Andrew Garfield. New York is co-star of Sony’s latest “Spider-Man” film opening this weekend, and it’s also one of the movie’s backers.
In return for spending $150 million shooting the biggest ever film production in New York, Sony Corp. could be eligible for as much as $45 million under a program that lures movie and TV production with rebates equaling 30 percent of expenses.
The aid underscores the growing competition among states to lure film and TV producers from Hollywood. New York has gained jobs in the industry since 2004 with state subsidies that total $420 million annually. In California, which has lost jobs, an April 30 state report faulted competing subsidies as ineffective and “a race to the bottom,” while acknowledging local legislators may have to provide more aid.
“One doesn’t need a Spider sense to know these aggressive film programs in states like New York and Louisiana are drawing away a lot of motion-picture production from California,” said Assemblyman Mike Gatto, who is sponsoring legislation to expand the state’s $100 million annual program. “Our choice is to do nothing and watch production leave or do something.”
The team producing “The Amazing Spider-Man 2” shot for 100 days in New York, and spent $150 million in the state, according to the Motion Picture Association of America, the studios’ trade group. That suggests Sony Pictures could recoup up to $45 million, though the actual number may be lower depending on which costs qualify under the state rebate formula.
“It’s a pretty big number,” said Joe Chianese of Entertainment Partners, a Burbank, California-based company that helps studios obtain subsidies. “New York has really done a great job in building and maintaining a very creative incentive program.”
A Sony spokeswoman declined to comment.
The film, starring Garfield in the title role, features 3-D scenes of the city, its police force and skyline, and Spider-Man soaring from building to building. The total production budget was estimated at $200 million by Imdb.com.
The effort made “Spider-Man” the largest production ever filmed in New York, and underscored the value of the state subsidies, according to Governor Andrew Cuomo.
“It paid off for New Yorkers from Rochester to New York City and Long Island,” Cuomo said in the MPAA release. “Peter Parker and the Spider-Man team provided local businesses and communities with a big boost in revenue and hiring, and we look forward to the continued growth, successes, and economic impact of the film and television industry here in New York.”
As part of the new state budget, Cuomo, a Democrat, increased the number of counties north of New York City where films can qualify for an additional 10 percent credit, according to the Office of Motion Picture and Television Development.
In all, the Spider-Man crews rented 300,000 square feet of space in the state, paying $4 million in site fees and $5.7 million on hotel services for more than 22,500 nights, the MPAA said in the statement. Catering totaled $1.9 million, including $16,000 at Bagelboss in Hicksville. The film had a cast and crew of 3,900 and 5,223 extras. New York residents got $44 million in wages.
Filming took place at three different stages in New York State: Gold Coast Studios in Bethpage, Grumman Studios in Bethpage, and Marcy Armory in Brooklyn. One scene was filmed in Long Island, where the production team recreated Times Square’s famous Father Duffy Square.
“This is not a new industry for us,” said Kenneth Adams, president and chief executive officer of Empire State Development, the New York agency responsible for the rebates. He said it was the first time a “Spider-Man” movie had applied for the credits. “We have an economic history and legacy. We’re assuring New York State plays a critical role in this industry.”
“The Amazing Spider-Man 2” is projected to produce weekend sales of $94 million in U.S. and Canadian cinemas in its debut, the estimate of BoxOffice.com. Critics have been 57 percent favorable, according to Rottentomatoes.com, which sums up reviews with a single tally.
Including international sales for the latest release, “Spider-Man” films since 2002 have produced worldwide box-office sales of $3.4 billion, according to Box Office Mojo.
A hit would be a welcome success for Tokyo-based Sony, which reported a preliminary fiscal-year loss yesterday that exceeded its previous forecasts.
New York City Mayor Bill de Blasio, in appointing Cynthia Lopez as his new film commissioner last month, said he would continue efforts by his predecessor to attract entertainment jobs. Michael Bloomberg, the former mayor of New York, is majority owner of Bloomberg LP, parent of Bloomberg News.
Thirty-seven states offer film and TV credits, with payments by the top 10 totaling $1.37 billion a year, according to an April 30 report by the California Legislative Analyst’s Office. New York’s is the largest, followed by Louisiana at $236 million and Georgia with $140 million.
Assemblyman Gatto’s bill would allow films with budgets exceeding $75 million to apply for state credits, a change that would let larger productions like “Spider-Man” qualify. The Los Angeles Democrat hasn’t settled on how much aid he’ll seek in total subsidies.
California lost 16,137 entertainment industry jobs from 2004 to 2012, an 11 percent decline, according to a February report by the Milken Institute. New York, which has boosted its incentives, added 10,675 positions, up almost 25 percent.
“These big productions, the tentpole productions, employ so many people for such a long time, including them in the incentives gets you the most bang for your buck,” Gatto said.
The push by studios and producers for state aid is part of a larger trend by U.S. business to locate operations where they can get the best tax treatment. Pfizer Inc. is the latest corporation to consider reducing its tax bill by moving its legal address outside the U.S., proposing an acquisition of London-based AstraZeneca Plc that would let the company reincorporate in the U.K. while management stays in New York.
California’s legislative analyst questioned the wisdom of handouts in the movie industry.
“Ideally, states would not compete on the basis of subsidies,” the analyst said. “Given that other states and countries offer subsidies, it might be difficult for California not to provide subsidies and still maintain its leadership.”
To contact the editors responsible for this story: Anthony Palazzo at firstname.lastname@example.org Rob Golum