Would Rio de Janeiro's Woody Allen Film Offer Pay Off?

Mayor offers to pay for Allen's next movie if shot in Rio, but film subsidies are risky business.

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The mayor of Rio de Janeiro offered to pay for director Woody Allen's next movie if he shot it in the city.

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Rio de Janeiro mayor Eduardo Paes might want to rethink his offer to pay for a Woody Allen movie filmed in his city, at least according to studies on film subsidies done in the United States.

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In an interview with O Globo, Paes promised to pay for "100 percent of the production" if Allen shot the film in Rio, though he noted that the local artists guild would "kill me when I pay the millions that he requests."

Paes may want to listen to his critics and not only because such a project would offend local film producers. Researchers have found that film subsidies usually end up costing the taxpayer in revenue hikes or cuts in public services. "It's too little bang for too many bucks," says Robert Tannenwald, a professor at Brandeis University, who as a fellow at the Center for Budget and Policy Priorities conducted a 2010 survey on the economics of film subsidies.

"The film subsidies don't pay for themselves, regardless of what certain studies commissioned by the film industry say," he says, referring to the criticisms of a report done by the Motion Picture Association of America that claimed benefits for programs that allowed film subsidies. In Massachusetts, for instance, Tannenwald examined a study that found that each new job created by film subsidies cost taxpayers $88,000 – and many of those jobs are temporary and go to non-residents. Ultimately, every $1 in tax revenue given to film subsidies brought in only 69 cents of income for the state.

"It would be more effective for the government to just write a check to everyone," Tannenwald says.

Allen's most recent films are estimated to have cost in the $16-$18 million range – less than the $22 million New Mexico sacrificed in tax credits to have last year's "The Avengers" shoot within its borders. Paes said his offer was made with the attention of boosting the city's film industry.

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Others have noted that Allen's films have been praised by the cities that serve as settings for drawing tourist interest. But even that strategy is risky, according to Tannenwald's work.

"There are some films that generate tourism and tourism generates jobs, but those films are few and far between," he says. "The best evidence suggests the economic benefits of tourism generated by film subsidies is modest overall."

Furthermore, Brazil has already been facing increased scrutiny over the cost of the 2014 FIFA World Cup and the 2016 Olympics (The economic benefits of hosting such mega sporting events is a whole other debate). Brazilian taxpayers are reportedly footing $14 billion of the $18 billion bill for the World Cup, and billions more on the Olympics. Recent protests in Brazil have broken out in part due to frustrations of the cost of the upcoming events.

Allen did admit Barcelona offered him some funding for "Vicky Christina Barcelona," but also, that he wrote the film because Spain seemed like a nice place to spend the summer. Considering the current fuss over the World Cup and Olympics, Paes should maybe consider bragging about Rio's weather.

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