$4.5M Netflix deal clears first hurdle
Media giant pledges to spend $600M in 5 years
Members of the Albuquerque Development Commission on Thursday unanimously voted to recommend that the City Council pass a $4.5 million economic incentive package for Netflix, the media services giant in negotiations to purchase Albuquerque Studios.
Commissioners also asked the council to take immediate action on the proposal. The council’s next meeting is Monday.
Synthia Jaramillo, director of the city’s Economic Development Department, told commission members that the deal with Netflix would “ensure a higher, steadier supply of production from the world’s largest producer of content.”
“The new Albuquerque Studios hub will serve as home to original series and films, and will give Netflix options inside and out for filming new series and films,” Jaramillo said.
She said an estimated 30 percent of a project’s budget goes toward local vendor services and the majority of that
spending will take place in the Albuquerque area, even if shooting occurs outside the studio.
In addition to Albuquerque’s contribution of $4.5 million in Local Economic Development Act funding, Netflix is asking for $10 million in LEDA funds from the state, but that transaction was not under ADC review.
Because the city is acting as fiscal agent for the state’s LEDA funds, however, that part of the incentive package proposal will also be sent to city councilors for approval.
As part of the proposed agreement, Netflix commits to direct spending on its own productions in New Mexico of at least $600 million in the first five years occupying the studio, and $400 million in direct and indirect spending — including leasing the facility to other companies — in the following five years.
Sherman McCorkle, ADC chairman, said the proposal is among the best offerings he has seen in eight years on the commission.
“I think it will end up being a major bookmark, somewhat like Facebook, in terms of an investment, but it will create jobs where otherwise jobs would not have been created,” McCorkle said. “It will keep many of the sons and daughters of native New Mexico families at home. That in itself is a major accomplishment.”
Officials from Netflix told a news conference on Monday that they are in negotiations to purchase Albuquerque Studios with plans to make it a principal production hub in the United States.
Netflix has committed to spend at least $2.5 million in capital improvements at the Albuquerque Studios facility, as well as maintain and operate the facility for at least 10 years.
Albuquerque Studios, in the Mesa del Sol community, includes nine sound stages, production offices and a backlot.
Company officials did not release details about the sale price of the studio during the Monday conference but did say the deal would bring about 1,000 film and television production jobs per year.
Netflix has brought projects to New Mexico, such as the Emmy-winning Western series “Godless,” as well as “Longmire,” “Chambers,” “Messiah,” “The Ridiculous 6,” “Daybreak,” “The Ballad of Buster Scruggs” and “Walk. Ride. Rodeo.”
Clawbacks include monetary penalties if Netflix’s spending by Dec. 31, 2023, is less than 90 percent of the $600 million performance target or spending is not at least an additional $400 million by Dec. 31, 2028. They also include monetary penalties if Netflix ceases operations at the studio before Dec. 31, 2028.
The studio is also home to the New Mexico-based digital and satellite network REELZ.
The network broadcasts various TV events, miniseries, movies, and series featuring big stories and big stars, along with original content.
According to the network, there is no impact for REELZ in New Mexico.
“A Netflix commitment to New Mexico as announced at this week’s news conference is exciting and should be read as confirmation for quality of work force and strength of state, city and other local support to the TV and film industry,” a statement said. “If Netflix does buy ABQ Studios, REELZ will have a new landlord and that is the only impact on our commitment to New Mexico,” a statement said.
On Monday, Ty Warren, Netflix vice president for physical production, said that between the infrastructure and existing crew base in New Mexico, it was a win for the company to move here.
He said a broad range of products would be made here.
“Of course, we want to take advantage of the beautiful landscape, all of the locations that are in the area for sure,” Warren said. “Having state-of-the-art facilities like this here is super-exciting for us. Not every place has beautiful soundstages like this. (Expanding) will depend on the amount of shows we’re going to do here. The facility is gorgeous as it is. Our plan is to go show by show and see how things evolve.”
Netflix is poised to purchase Albuquerque Studios and is expected to benefit from an economic incentive package.