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Your Albany Top Ten List

By Bennett Liebman

Many entertainment, arts, and sports law practitioners in New York look at Albany as some sort of foreign land. It’s almost like the old Saul Steinberg New Yorker “View of the World” cover. This time, instead of looking west, we look north with entertainment and arts civilization ending at the Bronx –Westchester border. There might be dots in the picture for outposts like Woodstock, Saratoga Springs, or Caramoor, but basically any locale north of New York City would be deemed a cultural wasteland. How can a town with arcane ways and less than 100,000 people determine the entertainment and arts policies governing the nation’s – if not the world’s - entertainment and arts hub? It’s like Sparta exercising artistic dominion over Athens, or if the Philistines had defeated the Israelites.

One of the major legislative issues has already been resolved. That is the sales tax on admissions issue. Governor Paterson in his budget had initially proposed to extend the sales tax to various amusement charges. He anticipated that this action, when fully implemented, would have increased state revenues by $70 million. The budget plan extended the State’s 4% sales tax and any applicable local sales tax to admission charges. Thus, per the State Budget division, there would have been a sales tax imposed “for admission to horse racing tracks, boxing and wrestling events, live dramatic and musical arts performances, circuses, motion picture theaters (whether or not to see a movie), and places where patrons will participate in a sport such as a swimming, bowling, tennis, etc.”

The provision was adamantly opposed by Broadway theaters, ski resorts, and bowling alleys. The New York Times even wrote an editorial against its application to Broadway stating “An entertainment tax should certainly stay in that mix, especially when it comes to thriving businesses like movies, sports events, concerts and dog shows. When it comes to Broadway, only a smaller levy makes sense -- and even that should be short term.” The Governor withdrew this proposal and a host of so-called “nuisance” taxes on March 11 and replaced them in his budget with federal stimulus funds.

Without trying to decipher Albany’s ways, this is an attempt to develop a top ten list of the initiatives in Albany that are likely in 2009 to affect the arts, entertainment, and sports fields. It’s where the netherworld meets the entertainment world.

10. Mixed Martial Arts Legalization – This recession seems to be the most likely time for an attempt to legalize mixed martial arts competition. It may be the fastest growing sport in the nation, and its proponents are likely to claim that he sports’ legalization will have a significant positive economic effect on New York.

9. Video Lottery Terminals at Racetracks – Video lottery terminals are instant lottery tickets that are dispensed in a manner that makes them indistinguishable from slot machines. They are now at all the State’s harness racing tracks. Negotiations with an ostensible winning bidder to bring VLT’s to Aqueduct Racetrack in Queens failed this month. Current state law prevents VLT’s from being used at Belmont Park on the Nassau-Queens border. Will VLT’s be expanded to include Belmont, which could bring in hundreds of millions of dollars to the State? Will the negotiations over Aqueduct be resolved? Will efforts be made to expand the definition of a lottery to include electronic table games and/or traditional slot machines? What composer Frank Loesser in Guys and Dolls might have called the “oldest established permanent floating gambling debate” will certainly continue in Albany.

8. Baseball and Brodsky- Powerful and outspoken Assemblyman Richard Brodsky of Westchester County has been engaged in a running war with New York Yankee president Randy Levine over the financing of Yankee Stadium. Brodsky has challenged the financing as corporate welfare for the richest team in baseball. He has called on the IRS to review the stadium deals of both the Yankees and Mets. The Yankees through Levine have accused Brodsky of political grandstanding. The issue becomes what the end game for each of the participants is and what impact there will be on the sports teams and the taxpayers of New York.

7. Stimulus money – It may not be a legislative issue, but a major issue facing the entertainment industries will be whether they can access federal stimulus moneys. For example, will there be federal stimulus money available to help construct Bruce Ratner’s Atlantic Yards project which is supposed to house the stadium for the relocated New Jersey Nets? Will there be stimulus funds for Broadway theaters or for arts projects?

6. The OTB’s – With the horse racing industry seeming to crater in New York State and in the nation, what will become of the six regional OTB’s in New York State. The commercial racetracks all have video lottery terminals. The New York Racing Association has considerable State support and is on the verge of having VLT’s. But the OTB’s – which are six separate public benefit corporations – have little backup. There is a State task force that is supposed to report on the overall issue, but issues of privatization, consolidation, and shared services have proven difficult in the past to deal with.

5. Ticket Resales – Major issues have sprung up nationwide over the resale practices of companies offering concert tickets. There have been incidents in the United States and Canada where concert ticket go up for sale at Ticketmaster, are quickly sold out, and then reappear at high prices on Tickets.now, a reseller of tickets owned by Ticketmaster. This has become an issue that attorney generals and legislators are likely to review. If there are going to be probes of resalers, it is also likely that these investigations will look at fees and service charges of the ticketing companies. The proposed merger between Ticketmaster and Live Nation is also likely to be subject to legislative criticism.

4. Museum Art Sales – With endowments shrinking due to the massive losses of the stock market, some museums have resorted to selling portions of their collections to pay their operating costs. This is a practice that has been frowned on by much of the museum world, which does not believe that works of art should be used to monetize museum collections.
To accomplish this goal, the omnipresent Assemblyman Brodsky has introduced A. 6959 which would create rules for deaccessioning items in a museum's collection and which would regulate the use of funds received from deaccessioned items. Museums would be required to adopt a binding collection management policy and a mission statement. Items can only be deaccessioned if certain criteria have been met, and “any museum disposing of an item must make a good faith effort to sell or transfer such item to another museum in New York state.” Proceeds derived from the deaccessioning items from a museum’s collection may not be used for normal operating expenses. It remains to be seen if this legislation will be regarded as overly burdensome by much of the museum community and encounter significant resistance.

3. Broadway Generally – With a slew of 13 play closings on Broadway in January and a depressed market in general, the Broadway theaters are looking to Albany for some measure of relief. In the best of all possible worlds, they would like to see some Broadway theater credit much in the same manner as the film production credit. Budgeteers in Albany might tend to view the Broadway stage as a captive industry. Unlike the film industry, it cannot pick up and move to a different state or province. Thus, they may be unlikely to find money for Broadway when Albany is already under fiscal stress. Will there be other measures such as Assemblyman Brodsky’s bill A. 5062 which would authorize the State Power Authority to provide electricity to Broadway and off-Broadway theaters, or will Broadway be fortunate to thank its lucky stars that the sales tax on admissions was not extended to Broadway shows?

2. The Film Credit – In last year’s budget, Governor Paterson and the legislature passed a film production credit which granted film and TV companies get a 30% tax break on production costs for shows shot in New York. This credit has proven so popular that its funds have been depleted, and there may not be enough money in the upcoming budget to continue to supply the credit. Governor Paterson in his budget did not propose to increase funding for the credit. Because of the uncertainty over whether the credit will continue, at least one television show, Fringe, has announced it will leave New York for Vancouver, and others are considering leaving as well. Both the studios and the labor unions have lined up in support of full funding for the credit and making the credit permanent. The AFL- CIO is in support of this tax break stating, "As the legislature debates the 2009 budget, it is imperative to give this program certainty for thousands of workers. ... We are losing jobs right now. Good-paying union jobs with benefits are leaving New York.”

This is a big ticket lobbying number. In 2009, Steiner Studios in Brooklyn reported over $125,000 in lobbying expenses on this issue last year. The Motion Picture Association of America, which was involved in other issues as well, reported over $235,000 in lobbying expenses in New York in 2008. Again, this is an issue where we may see some resolution when the State budget is passed. If the budget does not address this issue, it is likely to be around throughout the session.

1. The Dead Celebrities Bill- This is the issue which flared up at the conclusion of the 2008 legislative session involving the privacy and publicity rights of the estates of deceased celebrities. A huge publicity effort was mounted in Albany last June to obtain legislation similar to California’s Dead Celebrities Bill which was passed in 2007.Much of the lobbying effort was fueled by the estate of Marilyn Monroe. The Monroe estate (Marilyn Monroe LLC) reported $120,000 in lobbying expenses last year to pass this legislation. Numerous other groups were concerned about this issue as well including the Association of the Bar, the Broadcasters Association, the Broadway League, McGraw-Hill, the Motion Picture Association, the Screen Actors Guild, and the Cable TV Association. Another huge fight seems a sure thing in 2009. It is Albany’s answer to the Battle of the Network Stars, and it’s a sure thing that this battle of the dead celebrity stars will be more entertaining than most of the films and television shows that the dead celebrities starred in.

Bennett Liebman is the Executive Director of the Government Law Center of Albany Law School. He also serves on the board of directors of the New York Racing Association.

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This page contains a single entry from the blog posted on April 14, 2009 3:45 PM.

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