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New York and Los Angeles Fight for Latenight Shows With Incentives

When CBS announced last summer that Stephen Colbert would stay in New York when he takes over “Late Show,” it wasn’t much of a surprise in Los Angeles, even though Mayor Eric Garcetti had made overtures to lure the show West. In Gotham the production is eligible for $11 million in tax credits and a $5 million grant to offset renovations to the Ed Sullivan theater, where the show is based.

Both cities are eager to attract popular latenight franchises. While the number of people such shows hire is small compared with other productions — “Late Show” will employ about 200 — the jobs are more secure and permanent than, say, those of a film shooting on location for a finite period, or a primetime drama that could be canceled for weak ratings.

Another benefit: The city is featured on TV, night after night, spurring tourism. When Letterman moved to the Ed Sullivan in 1993, the locale became a sightseeing stop.

But New York’s effort to poach or retain talkers has raised eyebrows.

Gov. Andrew Cuomo’s administration included language in the state budget in 2013 providing for a 30% credit for shows with an audience of at least 200 people that relocate to the Empire State. It seemed tailored to attract NBC’s “Tonight Show,” which moved from Burbank to Manhattan earlier this year, even though new host Jimmy Fallon already wanted to base “Tonight” in Gotham. And while that relocation incentive doesn’t apply to “Late Show,” CBS will be eligible for a credit under the state’s Excelsior Jobs Program, which includes a provision for credits to “an industry with a significant potential for private sector economic growth.”

“It’s simply retention,” says E.J. McMahon, president of the Empire Center for Public Policy.

Sources say the state offered another generous package to lure “Late Late Show” when host James Corden takes over from Craig Ferguson in March. A spokesman for Empire State Development, however, said that the show simply would have qualified under the existing tax credit that has helped bring “The Tonight Show” and “America’s Got Talent” to the state.

Although L.A. couldn’t match the incentives, Garcetti did make overtures, and the network ultimately decided to stay put at L.A.’s Television City. The “Late, Late Show” could qualify for another credit via the California Competes program, aimed and luring business to the state or retaining them, according to a state official.

With cost savings from offsets reaching into the tens of millions, it’s likely the onus will be on public officials to come up with more offers to keep latenight talkers within their cities. The challenge is that production tax credits typically aren’t extended to talkshows. California recently tripled the size of its credit and expanded eligibility, but the program is geared to features and hourlong dramas.

“The overall objective needs to be to protect jobs and revenues in Los Angeles, and whatever category of production is going to do that is what we are going to need to be focusing on,” said Los Angeles City Councilman Paul Krekorian, who chairs the ad hoc committee on movie and TV jobs.

Local crews are hoping that’s not just talk.

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