Marvel's Moxie

There's a struggle afoot in Hollywood. At issue are tax breaks. Studios want them, to keep from moving film and TV productions to tax-friendlier locales, as happened when ABC's "Ugly Betty" moved to New York.

California governator Arnold Schwarzenegger says no deal with Democratic legislators is forthcoming. Marvel Entertainment (NYSE: MVL) seems to think it can help.

That's according to "Iron Man" director Jon Favreau, in the gossip blog Deadline Hollywood Daily. "They're willing to make a commitment to keep all four productions here in town. They're looking for existing studio space right now," Favreau said.

He's referring to Marvel's next four self- produced films: "Iron Man 2," "Thor," "Captain America" and "The Avengers." Reportedly, the comic book king would pledge $600 million in production spending in California in exchange for some sort of tax relief. How much relief? "Marvel got an eight-figure rebate check on 'The Incredible Hulk,' which was shot in Canada," Favreau told DHD.

Eight figures? That's at least $10 million, a terrific windfall for a company whose 37.4 percent effective tax rate resulted in $58 million in cash tax payments over the last 12 months. Any sort of credit related to Marvel's $600 million in already planned film spending would add muscle to its mighty cash-flow machine.

Perhaps Marvel understands Hollywood far better than we think.