How would you feel if your government paid more than half a million dollars to help cover the costs of production for a really lame reality television show?
Ask the people of Virginia. The state's tourism agency paid $536,000 to bring an episode of The Bachelorette to Richmond, of all places, in exchange for some promotion of the state's "Virginia is for Lovers" tourism motto.
The Richmond Times-Dispatch got the details. The Virginia Tourism Corp. gave $300,000 to the show itself. It gave another $236,130 to "defray the costs" of meals, rooms, and production space at two hotels where the show's staff stayed during filming.
These are direct subsidies to the private sector. They aren't even tax credits. In exchange, the state of Virginia got "exposure." Specifically, it got an in-show shot of a "Love" sign, a reference to the "Virginia is for lovers" motto, and some other minor mentions. Even the Times-Dispatch news story casts a bit of shade on the idea that this is significant "exposure" by putting the words in quotation marks.
The justification for giving Virginia citizens' tax dollars to a Hollywood production company is that this "exposure" will increase tourism to the state, a claim that would be a challenge to prove. The story is full of typical marketing buzzword blather from tourism officials (you may check "branding opportunity" and "thinking outside the box" off your bingo cards). An official claims with a completely straight face that the state received $47 million in "publicity value" for that single episode of the show, which was viewed by 5.22 million people.
Virginia, like many states, gives out all sorts of direct subsidies, tax credits, and other benefits to TV shows that shoot there. They justify this by insisting that the spending pays off in economic activity within the state—the same argument used to justify giving money to private sports stadiums. Virginia offers $700,000 in subsidies and $6.5 million in tax credits to the television show Homeland, then turns around and claims more than $75 million in "economic impact."
Economic experts tend to think this is bullshit. When somebody tells you it's possible to get $47 million in "publicity value" off a single episode of a reality television show revolving around painfully artificial romances, you should probably question his other financial figures. Another episode of the show went to Lake Tahoe, where the producers got another plum deal, though the details were not made public. In that case, the president of the local visitors' bureau said they saw "a spike in web traffic, newsletter subscriptions, social media followers and wedding inquiries." That's some nicely vague analysis of the benefits that doesn't actually indicate "economic activity." It does, however, read like what's going to end up on an end-of-year report justifying this visitors' bureau's work.
Meanwhile, try to imagine what it must feel like to be working at any of the hotels in Richmond that didn't get to play host for a show. Their competitors got a direct infusion of money from the state. Virginia has a hotel occupancy tax of 5 percent, and most of that goes to the state. Fundamentally this means that all the other hotels of Richmond helped pay for the costs of the production crews of The Bachelor to stay in hotels that they have to compete with to stay in business.
Critics note that the benefits from the subsidies often go to people outside the state. More than half of the money spent for this episode went to the production company. And so those who support these types of subsidies lean heavily on that "economic impact" claim, using the concept of economic multipliers—that the money spent during the production in Richmond filters back out into the community and is magnified when it gets passed along for other market needs.
But this ignores the opportunity costs. What could have been done with the money had it not been spent on a single episode of a television show? Are there no infrastructure improvements the state could be paying for instead? Oh, but that might involve taking some of the $26.8 million away from the state's tourism budget.
States don't just exaggerate the benefits; they conceal the costs. Did the citizens of Virginia truly get a good value from spending nearly a quarter of a million dollars reimbursing a couple of hotels in Richmond? Probably not. In fact, these shows are the ones that go shopping around, seeing where they can get the best deals from municipal and state tourism organizations. This competition between cities to attract television and film crews creates an environment where the government keeps funneling more and more of the citizens' tax dollars to the production companies.
In The Bachelor's terms, city and state tourism and film bureau officials are begging drunkenly in the courtyard for a rose and then trying to convince us in camera confessionals that they've got the perfect plan and are sure they're going to win. The idea that cities desperately pleading with production companies to come film there are also at the same time getting great deals for the taxpayers is as absurd as thinking that anybody on The Bachelor is in love with anything other than the prospect of becoming famous.