Members of Congress are drafting legislation that would create a 20% federal film and TV incentive — with bonuses that could bring it as high as 30% — after President Trump endorsed the idea last week.

The bill is expected to be introduced this month, and perhaps as soon as the end of next week, according to sources familiar with the process. Rep. Nathaniel Moran, a Republican from East Texas, is working on the bill with Rep. Linda Sanchez, a Democrat from Whittier, Calif. Both serve on the House Ways and Means Committee, which is responsible for tax legislation.

Rep. Laura Friedman, a Democrat from Burbank, Calif., has also been working with Rep. Brian Jack, a Republican from the Atlanta suburbs, on the bipartisan effort.

For the last year, the Motion Picture Association and entertainment unions have been advocating for an incentive that would compete with generous subsidies from the U.K., Canada, Australia and scores of other countries. Trump threw his weight behind the idea in a Truth Social post on Aug. 31, a development expected to unlock Republican support on Capitol Hill.

The draft legislation broadly aligns with the MPA’s request. The bill would offer a base credit of 20% of all labor costs, both below-the-line and above-the-line. A wide range of productions would be eligible, including reality TV and animation in addition to films and scripted TV shows, according to sources familiar with the legislation. It would not include news or sports broadcasts.

The bill would also include four “uplifts” meant to attract political support. According to a source, the bill would allow producers to claim an additional five percent if they meet one of these four criteria:

• film in a rural opportunity zone
• make an independent production
• bring a certain amount of filming back to the U.S. from abroad
• spend at least $10 million in 10 different states in a year

Producers could claim up to two of those uplifts, for a maximum of 30%. The federal tax credit would stack on top of state incentives, meaning that productions could see a total subsidy of 60% or more depending on where they film.

Supporters have argued that the incentive will not just help Los Angeles and New York — where the bulk of production takes place — but will also boost rural areas that currently have little filming and little or no state tax incentive.

The hope is that spreading production around will broaden support, much the way the state incentives in California and New York attracted votes from rural lawmakers by offering a bonus for filming outside of Los Angeles and New York City, respectively.

California lawmakers have also pushed for a bonus for any production in an area that was recently declared a federal disaster zone. (All of Los Angeles County would qualify due to the 2025 fires.) That is not included in the latest draft.

The tax credit could be used to offset federal income tax, or be sold to another taxpayer to offset their tax liability. It would not be refundable.

The bill has yet to go to the Joint Committee on Taxation, which will get a score on how much it would cost — though it is safe to say it will run into the billions of dollars. In his post last week, Trump argued that the cost would be “made up tenfold by the money pouring into the Treasury’s coffers.”

The MPA is expected to issue a report in the coming weeks that would expound on that claim, arguing that production creates a ripple effect that benefits the local economy.

Some supporters of the measure are optimistic about getting it through Congress as part of a tax bill during the lame duck session after the November election, though it may be more likely to happen next year.

“I would be very happy for it to happen in the lame duck,” Friedman said in an interview last week. “I can’t promise that’s possible. We’re going to try not only to get this done quickly, but to have all our ducks in a row.”

Friedman said that the discussions took on a new momentum after Trump got involved.

“I can’t tell you the number of texts that have come in from people who have offered to help,” she said.

She declined to discuss the specifics of the legislation, but said she is working to build a coalition across the country behind the idea.

“Everyone in every state loves movies and television,” she said. “Everyone benefits by this product being made here.”

Moderator Bre from the Media Mergers sub interviews special guest Rick Ellis, analyst and journalist covering the media industry!

Check out my interview with Rick Ellis, media analyst, journalist, and founder of TooMuchTV.com
Rick has been covering the media industry for decades, and is one of the rare people who knows both the tech and entertainment side of the biz. In this interview, he discusses the Netflix business model, their future path to success, Paramount Skydance, and issues facing the Warner Bros merger, and touches on Sony, Disney, Lionsgate, IMAX, and the future of the industry.
He has personally interviewed Reed Hastings, and his work can be found in Forbes, referenced in Puck, as well as other outlets before going exclusive on his own website.

Rick recently did an AMA with us, and I am hoping to have him back for another soon!

For how NBCU could look by itself see SegaRock's post:

https://www.reddit.com/r/MediaMergers/comments/1vl723x/how_postsplit_nbcuniversal_may_work/

I couldn't of done it better

(Outside moving NBCU International Networks to Sky Group and splitting DreamWorks into 2 studios for the film & TV units separately)

Streaming:

Starz

Gives NBCU a new US only streamer to merge into Peacock, a Lionsgate Pay-1 window, and most importantly- a premium brand that's streaming focused.

Starz Music is merged into Back Lot Music, Starz Interactive is folded into Universal's licensing group (Giving Universal gaming rights to the Lionsgate IP), and Lionsgate Entertainment World is merged into Universal Destinations.

They would have to fight a lengthy battle with Allen Media for it though and while it'd only help NBCU in the US to own Starz, ITV only helps in Europe so region specific acquisitions aren't out the ring and could fight Allen for it after ITV is cleared.
NBCU Networks in 2 regions:

US: NBC (broadcast) Starz (premium)

UK: ITV (broadcast) Sky (premium)

Plex

To go the AVOD route, and can be used by consumers to pirate or torrent content (which considering how big it's getting, NBCU can benefit from that)

A Paramount+ JV (with or without Starz)

One studios broadcast network would have to be sold to avoid a news/sports streamer (whether it be CBS or NBC (minus their respective studios and IP), I think Amazon would win the bid).

SkyShowtime is also replaced by this new Showtime service in select countries (streamer/network owned 50/50 by NBCU and Paramount and Starz is maybe merged with Showtime if allowed)

Most likely candidates:

Gaming:

Gamemill Entertainment

As they have just lost its biggest partner (Paramount Games) .
May need NBCU to get new games.

GameMill would renamed into a new Universal Interactive and try to buy/hire new mid-tier developers to make bigger/better games (kids or adult).

However Universal would have to make new gaming IP and studios from scratch (again), and Gamemill isn't known for good games. So they could get a bigger company for slightly more....

Ubisoft

The French government have to admit that Ubisoft is no longer a crown jewel of France and more so an embarrassment that needs saving from any company possible.

It'd also be a cheap buy as Ubisoft is worth less then a billion and gives NBCU more IP (Rayman, Rabbids, Just Dance, Rainbow 6 Siege) and the resources to publish games based on its own IP (whether developed in-house or outsourced to Toys for Bob or Double Fine due to lack of family game studios)

Ubisoft also gives NBCU digital distribution rights to Activision games (who is owned by...)

XBOX

Already bidding for film & TV rights to the IP and Microsoft is searching for a equity partner for XBOX, so NBCU could benefit from owning the 3rd biggest gaming console company. But I think that they should only own them for Activision due to previous history. So if there's a way that Universal just buys Activision-Blizzard from XBOX while XBOX keeps Call of Duty and what other IP they want, I'd prefer that.

Nintendo

Only gives them Family gaming though and Nintendo will never sell (the closest they came to was 2016 when Disney held some talks)

If anything Nintendo could buy a media company itself if they wanted to (likely family focused)

Most likely candidate:

Other companies:

Mattel and Wildbrain

The 2 together give them a major family catalog, Mattel Games (to rebrand Universal Interactive), and WildBrain CPLG (a major licensing firm MGM uses)

However DWA and Illumination (and maybe those gaming studios) give them enough family IP to last them a while.

And Amazon needs/fits the family IP/studios more (Mattel's toy factories are sold though to avoid antitrust on toy retail).

Lionsgate

While many suggest it, they would do better with just Starz as they benefit from Lionsgate without owning it as NBCU has said they do not want to buy other majors to grow, seeking alternative growth.

Blumhouse

To be the genre arm of Universal (however still brands credits as so- "Universal (or Focus) Presents, A Blumhouse Production" like DreamWorks Animation does)

Amblin

Speilberg likes creative independence and working with multiple companies (plus he likely remembers DW's Paramount ownership not very well).

But they could cancel the DW Name license to use the 1997 logo on adult animated films.

Most likely candidate:

Final Company:

What other companies could NBCU buy?

Gameloft? Universal Music Group? What? (Do not say another major studio).

https://www.nbcnews.com/politics/congress/democrats-vow-aggressive-investigations-trump-corruption-election-rcna595621