Clark Hunt is the largest recipient of welfare in the entire region.
The reasoning was pretty simple: the Hunt family is worth $25 billion [0]. They could likely pay for any sort of improvements to Arrowhead, or to replace it altogether, without taxpayer funds, which comes from people in a metro area where the average income is on the lower side of things in a time when costs for everything keep going up.
On the other side of the state line, Kansas lawmakers specifically targeted the goal of moving two professional sports teams to the state using public funds called STAR bonds.
The end result is that the Kansas City metropolitan area will be spending, in total, about $3-4 billion to give the Hunt family a new place for their sports team to play, likely far away from the city center, and that Arrowhead needs to be torn down, which will cost at least tens of millions of dollars, once again, at taxpayer expense.
$3 billion could probably build out a real public transit system for the KC metro.
[0] https://sports.yahoo.com/meet-25-billion-hunt-family-2024104...
But hey sometimes people vote for their teams to stay despite the negative monetary ROI.
> The Minneapolis Lakers moved to Los Angeles, where there are no lakes; the [Houston] Oilers moved to Tennessee, where there is no oil. The [New Orleans] Jazz moved to Salt Lake City, where they don't allow music.
Other names like that are
- the Baltimore Colts (named for Maryland's thoroughbred racing tradition) moving to Indianapolis (more known for open wheel auto racing),
- the Vancouver Grizzlies moving to Memphis, Tennessee (which never had Grizzlies even in the post-glacial period)
- the Brooklyn (Streetcar) Dodgers moving to Los Angeles in 1958 right when the LAMTA took over the few remaining street car lines before replacing them with buses in 1963.
The closest thing I can think of in European sports, and it's a stretch, is cycling teams. I picked this teams as the first example I could think of, not because it's some egregious example:
1984–1986 Kwantum–Decosol
1987–1989 Superconfex–Yoko
1990–1992 Buckler–Colnago
1993–1994 WordPerfect
1995 Novell
1996–2012 Rabobank
2013 Blanco
2013–2014 Belkin
2015–2018 LottoNL–Jumbo
2019–2023 Jumbo–Visma
2024– Visma–Lease a Bike
via https://en.wikipedia.org/wiki/Visma%E2%80%93Lease_a_Bike_(me.... Also note that the team was newly formed from a schism in TI–Raleigh, where the other half of the riders went to Panasonic.
The parallel is that the name changes make tracking that team a real ship of Theseus problem: if the name, sponsors, riders, and staff turn over, is it worth calling it the same team? Similarly, if a football team changes cities, names, personnel, and owners, is it worth calling it the same team (Houston Oilers, Tennessee Oilers, Tennessee Titans)?
It was radioactively controversial at the time, most fans never made the switch.
Eventually Wimbledon fans created a new club AFC Wimbledon who have since got promoted all the way to League One (the same league as MK Dons).
So the MK Dons owners ended up with nothing for all the trouble and they may as well have just made a new team. Nobody else has been stupid enough to try it since
Out of the many reasons, one is quite simple: daylight. This used to be really important with film.
Historically, this was why efforts to move filming to somewhere like 'Scunthorpe, UK' didn't really work, despite tax fiddles, because you need light and some places just don't have it.
But this doesn't matter now, because film has moved on, there is no need to have a massive glowing unshielded nuclear fusion reactor, 93 million miles directly overhead, just to get some lens focused on some bits of silver halide.
Edison had a lot of early patents for film, and wanted to monopolize the industry.
Film makers in California were far enough away that it was inconvenient for Edison to sue them, both because it required sending people there in person, and because the district courts were favorable.
https://www.zillow.com/home-values/11267/edison-nj/ https://www.zillow.com/home-values/12447/los-angeles-ca/
Might be opposite sides of the country but CA and NJ are lock step when it comes to making it unaffordable for younger generations to buy homes.
Because Edison and Patents in New York which was the original centre for filmmaking in America.
https://en.wikipedia.org/wiki/Motion_Picture_Patents_Company...
We had a boom from 2010-2022, but post streaming era the gravity has moved to the UK and Eastern Europe.
Post-production is very much still in California though.
Atlanta did a lot of the big ones.
Since then Canada and the UK in particular (and NZ and Australia) have had various different fluctuations in subsidies for various parts of filming / doing post-production of movies over the intervening years.
Movies and shows like Inception, Interstellar, Ex Machina, Tenet, Dune 1&2, Odyssey, Chernobyl, Foundation, and The Last of Us were VFXed in large part by Indian companies like Prime Focus, Makuta, Phanton, and their subsidiaries.
A number of these overlap with HPC and Distributed Systems with a number of major players in the space coming out of the GPU design space like Raja Koduri (AMD, Apple, Intel). Nvidia, AMD, Intel, Apple, and others having dedicated GPU design teams in India since the early 2000s also helped.
Everyone involved still pays their taxes, but the special purpose vehicle used to organize the production is essentially a passthrough entity.
Each movie is set up as a separate legal business entity (LLC). That's the SPV (special purpose vehicle). https://www.google.com/search?q=each+hollywood+movie+is+a+se...
There's also a separate LLC for the parent production company. The production company LLC can also send invoices to the individual movie LLC for services. People can get creative with production companies "overcharging" for various expenses back to the movie's LLC but whatever creative accounting they want to do still needs to ultimately satisfy IRS scrutiny if there's an audit. There are entertainment attorneys that specialize in movie LLCs.
The relevant taxing authorities would be concerned with the parent companies' financials, not the subsidiaries. Moving money from right hand to left hand doesn't change one's tax liabilities.
"Hollywood accounting" only refers to civil disputes due to insufficiently defined contracts between two businesses (usually actors and producers).
Well, yes, but avoiding taxes is not the point of "Hollywood Accounting", rather avoiding paying actors.
The IRS can collect taxes from whichever business entity makes a profit, but, critically, actors cannot. They signed a deal with one entity, and are only payed a share of net profits if that one particular entity makes a profit.
Hollywood Accounting, then, is the process of shifting costs around so that the legal entity responsible for paying the actors never makes a profit.
The SPVs never own anything and never have any expertise in anything. So they have to pay the parent company for a wide range of services, from advertising and marketing to distribution to prop and equipment rental. That makes it easy to shift costs into the SPV as necessary.
I wasn't saying avoiding taxes was the purpose. Instead, I'm saying whatever "bogus" or "inflated" expenses that the production company LLC is charging to the movie LLC still has to be somewhat plausible. A simplistic example of what they can't do:
- Tom Cruise TC Productions LLC sends an invoice to MissionImpossible8 movie LLC with a single line item that says "script advisory service for $1 billion dollars" which then conveniently causes the movie's balance sheet to be negative $1 billion dollars and thus never make a profit.
The point is the production LLC, the distributor entities, etc all charging the movie LLC so that it shows zero profits ... still need to play their financial accounting games with more sophistication than that. Yes, go ahead and fabricate various costs to avoid paying actors on "net profit points" but it still needs a veneer of plausibility. Otherwise, the IRS comeback will be, "Is the $1 billion fee the real market rate for script advisory services? Do you have evidence of that amount ever being paid? etc etc"
If that's not creative accounting, I don't know what is.
That doesn't sound right. Traditionally, and in particular in the case of Forrest Gump, the distinction is between people who contract for a percentage of net profit (always zero) and people who contract for a percentage of gross revenue. The revenue is measured at the same point either way; it's just about whether you got suckered or not.
The point of Hollywood accounting is to intentionally create enough inflated expenses (billed from companies controlled by the studios or related parties of the producers etc.) to ensure that the net profit is zero or less, even when the film actually generated a lot of income.
It's true that tax gets paid eventually (and somewhere, maybe a tax haven) but it is intentionally creative accounting designed to minimise tax and screw people out of their royalties.
It reminds me of the eBay market in bulk lots of used scratch-offs harvested from the trash:
https://www.forbes.com/sites/robertwood/2016/01/14/powerball...
Affordable housing tax credits are contingent on a tremendous amount of regulations and stipulations, including who ends up holding equity in the property (it's not easy to use these as passthrough vehicles to get personally rich), so the private lenders tend to be repeat players, often banks, who understand how to navigate the process. Among other things, I guess it's a way to outsource oversight, so that the government doesn't need to maintain a huge bureaucracy to police each and every development project. OTOH, the financing complexity comes at a cost; a significant fraction of the value of the tax credits pays for lawyers and accountants, rather than to actual construction.
I don't know if filmmaking subsidies are more lax or easier to game.
Also, I think using tax credit schemes, instead of direct payments, might be a way to obfuscate the cost of these programs from a legislative and political perspective; not unlike the Earned Income tax credit. Nominally speaking, tax credits reduce government revenues rather contribute to expenditures; the latter draws far more attention.