North Carolina Denies the Lack of Grant Rebates are the Cause of Swamp Thing’s Cancellation

DC Universe's Swamp Thing

Early this week we ran a story that DC Universe‘s Swamp Thing‘s cancellation was possibly due in part of issues arising from tax grants in North Carolina.

Speculation ran rampant that the production was promised $40 million but only received a fraction of that, a claim that was easily debunked and we did exactly that.

We originally wrote:

The show is eligible for up to $12 million. That money has been set aside until an audit is completed. They had originally requested $16.3 million for the 13-episode season.

In reality, the production received what it requested, $12 million for the season (the maximum amount one can receive) and $4.9 for the pilot episode. We were correct on the $12 million and misunderstood the $4.9 million part. Pilot episodes are counted as their own series, hence the separate amounts. Closer to reality than any other reporting.

Since the budget for the grant program for the year is $31 million and a production can get up to 25% back, the speculated $40 million funding other sites reported wasn’t in any reality or close to it.

Guy Gaster, the Director of the North Carolina Film Office released a statement concerning the situation:

The production team for Swamp Thing knew before production began that North Carolina would offer up to $4.9M in rebates for their pilot episode and $12M for the remainder of season one. They accepted said offer and even signed a contract with the state with those figures. Per state legislation, the NC Film and Entertainment grant can only award up to $12M per season for a series. Per the program’s guidelines, pilot episodes are counted as their own series. In total, the program only receives $31M annually.

But, what Gaster doesn’t address is the still murky future of tax grants in North Carolina which is what our reporting was really focused on and a possible reason for the show’s initial cancellation. Rumors are it’s being shopped around to channels such as The CW and HBO.

From our original article:

In the 2019-2020 state budget, $31 million was to be removed from the fund due to it having a little over $67 million remaining. That money though was already promised. The future of the fund remains up in the air.

Elected officials seem to be disagreeing as to whether the incentives should exist at all. While the money has been restored in the budget proposed by the House, it hasn’t made it in to the Senate’s proposed budget. Budget negotiations are ongoing ahead of the fiscal year’s close on June 30.

This confusion by elected officials has likely lead to miscommunication and disruption and most likely made production not worth it and a logistical issue. The unknown nature of future incentives also makes planning for future production difficult.

Rep. Ted Davis (R-New Hanover) wrote in a post:

Because of miscommunication with the State Commerce Department, the chief House Appropriation Chairs were led to believe that there was $67,380,519 of unused funds in the Film Grant Fund, so an additional $31,000,000 was not necessary in the 2019-2020 fiscal year. This resulted in that amount being cut from the proposed Budget for the upcoming fiscal and was to be used for other things.

As explained above, due to a misunderstanding the 2019 budget in the North Carolina House and Senate removed future funding for their film and television grant program. The program currently has money available but that money is already promised. $31 million in future funding was in doubt, and still is.

The funding was replaced in the House budget proposal. Reconciliation between the House and Senate, and a possible veto from the Governor for the overall budget, future funding is still up in the air.

Wilmington Biz agrees with the assessment that film officials and studios are waiting to see how this allocation plays out for future budgets before making decisions and committing to film in the state.

Film officials and studios are waiting to see how film incentive allocations for fiscal years 2019-20 and 2020-21 fare in the budget reconciliation process.

Since production planning for a second season would begin relatively soon it’d be silly to continue if you don’t know if 20% of your budget won’t be present for future seasons. The amateur egg on face removal of the funding from proposed initial budget, plus a questionable future, is enough for a production to pull out, especially one with a budget around $85 million. The grant application form for Swamp Thing, filed with the N.C. Department of Commerce, estimates the production’s spending at $65 million in the state. Another $20 million was spent on its pilot. Crew numbers were estimated at 597.

So, while this year’s commitment was paid it’s the future of funding for the industry that’s up in the air.