Disney and NBC Eyeing New York’s AI Tax Break Ban Proposal

Walt Disney Co. and NBCUniversal are paying lobbyists to watch over legislation that would bar them from using a lucrative state tax break if artificial intelligence is used to displace workers in their film and TV productions.

Albany-based lobbyists for both companies began monitoring the bill (S.B. 7422) soon after it was introduced in each chamber in June when the 2023 legislative session wound down, according to disclosures filed with the state Commission on Ethics and Lobbying in Government.

Neither company has taken a public position on the measure, but they have obvious financial reasons for doing so once lawmakers return to Albany next January.

Both companies are battling striking Hollywood writers and actors over the future use of AI—with major studios advocating for a less restrictive environment. If approved, the New York bill could also become a model for other states while costing media companies potentially millions of dollars in future savings.

The bill in New York comes as various industries battle fears over massive worker displacement caused by the use of such technology. Assemblyman Demond Meeks (D) said the bill he sponsored could place the Empire State on the “forefront” of maintaining the “dignity” of working people at a time of growing angst about AI taking their jobs.

“It doesn’t surprise me,” Meeks said of the attention his bill is getting from Disney and NBC Universal. “Big business tends to look for quick ways to save money and, you know, this may be another means of that.”

‘Bullish’ about AI

Hollywood has taken an increased interest in the potential of artificial intelligence in recent years, especially the two companies monitoring the bill in New York.

NBCUniversal gained attention in 2019 for pioneering the use of AI in advertising, while Disney has signaled in recent months its hopes to leverage the technology moving forward.

Disney CEO Bob Iger told investors in a May 10 earnings call that he is “bullish” about AI, despite the possibility that it could “be extremely difficult to manage” when it comes to intellectual property.

“I can tell you that our legal team is working overtime already to try to come to grips with what could be some of the challenges here,” Iger added.

The companies have been recipients of film and TV breaks in the Empire State.

NBCUniversal has received $96.7 million in state tax credits since the beginning of 2022 for 14 productions that include the “Tonight Show with Jimmy Fallon” and “Saturday Night Live,” according to Empire State Development, which administers the program.

Disney got $10.9 million total for “The Eyes of Tammy Faye” and the first season of “Monster Island” after providing the jobs and local spending needed to qualify for the program.

Representatives of Disney and NBCUniversal downplayed the significance of keeping tabs on the proposed New York bill, despite the looming possibility that it would ban them from using AI to replace workers while taking advantage of the tax break.

“As is standard, we track, monitor and review any bills introduced that could potentially impact our business, and in compliance with New York State law, we transparently report those information-gathering efforts in our lobbying disclosures,” a Disney spokesperson said. Albany lobbyist Patricia Lynch Associates Inc. receives $10,000 per month for such services.

Dan Plummer, whose firm serves as an Albany lobbyist for NBCUniversal, similarly said the bill was just one of hundreds that had attracted his attention. The company pays the firm Plummer & Wigger $12,250 per month, according to its filings.

While neither Disney nor NBCUniversal, owned by Comcast Corp., has directly lobbied lawmakers or Gov. Kathy Hochul on the measure, that status could change by next session.

Hochul, who didn’t respond to a request for comment on the AI proposal, championed an expansion of the tax credit in the state budget approved in May, while claiming that she could strike a balance between the needs of corporations and the people they employ.

“These key initiatives to boost high-growth sectors, grow and retain jobs in film and the performing arts and build a 21st century workforce will accelerate New York’s post-pandemic recovery and solidify our standing as the most worker-friendly and business-friendly state in the nation,” she said in a May 3 press release.