The ABC drama, which was renewed last week for a third season, will receive a combined $8 million incentive package from the state of Tennessee, Metro Nashville, the Nashville Convention and Visitors Corp. and Ryman Hospitality Properties in order to keep the production filming in Middle Tennessee.
The deal was struck after weeks of negotiations, serious flirtations with moving to Texas or Georgia and anxious waiting for news of renewal from ABC. The incentive package is lower than the Season 2 incentives, which totaled $13.25 million
"It was not an easy decision to make," Nashville Mayor Karl Dean said. "We obviously had lots of conversations, and I'm sure it's not the amount they wanted.
"It's been an overwhelmingly good thing for the city. We have a strong tourism economy and a strong convention economy, but this just adds to it in a way we would never be able to do on our own."
Under the terms of the incentive deal, the state will contribute $5.5 million; Metro will offer a $1 million grant subject to Metro Council approval; and the CVC, the city's event marketing fund and Ryman will each add $500,000. "Nashville" is a joint production of ABC, Lionsgate and Ryman Entertainment.
Ryman Hospitality Properties CEO Colin Reed said "Nashville" helps the city attract tourists from across the United States in addition to international travelers, because the show is broadcast in more than 50 countries.
Reed said faraway travelers stay longer and spend more money than those from bordering states, making his company's investment in keeping the show filming here worthwhile.
"What we've got to do as a city is we've got to communicate and let people know why we're doing this," Reed said. "It's not because I want ('Nashville' star) Hayden Panettiere to stand on the Ryman stage, or spend time talking to ('Nashville' star) Sam Palladio.
"We're doing it for the ability to communicate what this city has to offer to people who historically have never been exposed to country music and the music scene of this fabulous city. That's why our company is so bullishly invested in this."
"Nashville" received more incentives for its second season, which aired its finale on Wednesday. But the state legislature and Gov. Bill Haslam passed a conservative budget that included less money for film incentives.
Tennessee Economic and Community Development Commissioner Bill Hagerty said his department's $5.5 million contribution will come from the state's film incentive program. Hagerty said the diminished incentive, though, shouldn't be misconstrued as the state valuing the show less than in the past. The show hired powerful lobbying firm the Ingram Group to act as its lobbyist.
"It really got down to the wire and the last minute," Hagerty said. "That's when we saw Ryman step in to help make things work — and that's where I stepped in and sweetened our offer a bit to make it all come together."
Public officials and show supporters say "Nashville" has greatly benefited the local economy in terms of direct spending and tourists who visit Music City because of the show. Payroll for non-actors was $13 million for Season 2, and 90 percent of the production staff and other workers were hired locally.
Additionally, a study by the CVC showed nearly 1 in 5 Nashville tourists who had seen the the ABC show said it was the "motivating factor" in their decision to visit.