nashville2ND UPDATE, 5:09 PM: The newly renewed ABC series will continue to film in its namesake city after all. Nashville will receive a combined $8 million incentive package from the state of Tennessee, Metro Nashville and other local groups for production of the musical drama’s third season. The package is lower than the Season 2 incentives — which totaled $13.25 million, including $12 million from the state — but 33% more than the $6 million the state had offered for the 2014-15 season.

Related: ABC’s ‘Nashville’ Renewed For Third Season

UPDATE 2:50 PM: Still no resolution on the renewal, but I hear the co-producers, Lionsgate TV and ABC Studios, are working on making the numbers work. That is focusing on state tax credit issues (the series films in Nashville), which have to be worked out for the series to get a formal renewal. Tennessee had a generous tax breaks for Nashville that have been trimmed, leaving the producers of the show with a big budget hole to fill. Tennessee committed $12.5 million to Nashville for the 2013-14 fiscal year in a package created outside the normal incentive program — a cost weighed against the estimated $40 million in economic impact the show was generating for the state. The ABC series was initially slated to get $6 million for 2014-2015, but the final budget passed by the legislature cut that amount by two-thirds. Talks are underway on several fronts to try to continue to produce the show without taking it out of Nashville where it belongs. Tennessee Department of Economic and Community Development had previously said of the show, “You’re not only getting the 20-plus episodes per season, every advertisement and preview for the TV show is essentially advertising Nashville.” And yes, the goal is to get to 22 episodes.

PREVIOUS 1:45 PM: After the slew of renewals and cancellations last night and this morning, the focus has turned to sophomore drama Nashville, which has remained in limbo. Nashville had been fully expected to get a third season renewal. I hear that indeed is the intention, though the size of the pickup is the subject of a debate. I hear ABC has offered a 13-episode order for the show, which is co-produced by Lionsgate TV and ABC Studios. Nashville is a very expensive show, so I hear the 13-episode pickup makes its production infeasible for Lionsgate. Talks continue.

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