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It's not often that an action hero needs rescuing. But if press reports are to be believed, Spidey is coming to the aid of The Terminator.
At issue are tax breaks. Hollywood studios such as Viacom's (NYSE: VIA ) Paramount Pictures, General Electric's (NYSE: GE ) Universal, and Sony's (NYSE: SNE ) Columbia Pictures want them to keep from moving film and TV productions to tax-friendlier locales, as Disney (NYSE: DIS ) did when it moved the ABC hit Ugly Betty to New York.
Former action hero and current California governator Arnold Schwarzenegger says no deal with Democratic legislators is forthcoming. Marvel Entertainment (NYSE: MVL ) seems to think it can help.
That's according to Iron Man director Jon Favreau, quoted in gossip blog Deadline Hollywood. "They're willing to make a commitment to keep all four productions here in town. They're looking for existing studio space right now," Favreau said.
He's referring to Marvel's next four self-produced films: Iron Man 2, Thor, Captain America, and The Avengers. The comic book king would pledge $600 million in production spending in California in exchange for some sort of tax relief. How much relief? "Marvel got an 8-figure rebate check on The Incredible Hulk, which was shot in Canada," Favreau told Deadline Hollywood.
Eight figures? That's at least $10 million, a terrific windfall for a company whose 37.4% effective tax rate resulted in $58 million in cash tax payments over the trailing 12 months. Any sort of credit related to Marvel's $600 million in already-planned film spending would add muscle to its mighty cash-flow machine.
Perhaps the superhero studio understands Hollywood far better than we think.
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