The State of Arkansas currently has a twenty percent (20%) incentive rebate provision for qualifying motion picture and television productions. This was recently increased from 15%. Under the current structure, a movie -- such as "THE LEGEND OF BELLE STARR" (with a production budget of $1-mm to be spent in Arkansas) -- would be eligible for about $200,000 back from the State of Arkansas. There's an addition incentive from the State EDEC for a rebate of funds paid to tax-paying State of Arkansas residents or entities, which could add another 4% to the pool of rebates.
Over the past month, Fred Shefte and Eric Parkinson have traveled to Little Rock (the State Capitol) for meetings, including strategic discussions with the leaders of a new tax benefit for Arts & Entertainment (an ADDITIONAL 20% rebate for those projects meeting the specific requirements). This bill, HR 1980 and 1981, appear to have sufficient support to pass. If this occurs, a movie such as "THE LEGEND OF BELLE STARR" could receive up to 44% of its production costs back in State of Arkansas incentives. This total would be greater than Louisiana or Michigan (the current USA leading states for film incentives), and does not factor in the additional benefit of cost-of-living being lower in Arkansas (so "crews" cost less to start with than crews in Louisiana).
We're mentioning this in the Blog due to shareholder questions about why both Fred and Eric were in Little Rock at the same meetings. Oftentimes -- usually -- Fred and Eric split up meetings. For instance, Eric will be in NYC next week on a major acquisition closing and a finance meeting; Fred will be in L.A. next week meeting with a DVD / Blu-Ray replicator about an enhanced credit line for the Company. Generally, the two managers like to split-up to get more deals done!
In any event, because the potential upside to Hannover House is so huge if these State of Arkansas Arts & Entertainment incentives pass, we felt it was important to present a united front with Fred and Eric both present in Little Rock to represent Hannover House as a distribution conduit for qualifying productions.
Stay tuned...
