Tax credits could revive hamstrung Hollywood business

California Gov. Gavin Newsom proposed a more than $400 million expansion of the state’s film and TV tax credit program, a move that could jump-start a stalling industry in the state.
“You would think everyone would want to film here, be here, do their productions here, post-production here, but it’s very expensive,” Paul Dergarabedian, an entertainment industry analyst, said, reflecting on the state of the industry that once made southern California.
Now, studios and production houses are abandoning California for cheaper horizons.
“In the wake of the pandemic, and certainly with the headwinds that the strikes created for the industry, it really put a fine point on how tough it is to get productions up and rolling in Los Angeles and in southern California,” he said.
Tom MacRae is a writer based in Los Angeles, but he doesn’t necessarily work in Tinseltown.
“I shot in Portland for the first show that I did, and I’ve just finished shooting in Serbia for the second show that I did,” he said. “There’s a big castle in Belgrade called Kalamegam… you could shoot 15 different, plausibly, completely isolated, locations in different time zones and everything. Obviously, LA doesn’t have that unless you build it all.”
A recent report from FilmLA shows film and television shot in Los Angeles in 2023 dropped almost 20% from the year prior. The report contrasts California’s tax incentives with more studio-friendly environments in Georgia, New York, the U.K. and Canada.
It’s a stark contrast to Hollywood’s Golden Age, when it was the only place to make a film.
“Hollywood was it,” Dergarabedian said. “I mean, they created a rail line to come through here to get people out here to California. But now the world’s very different and you can film basically anywhere. It becomes a financial motivation.”
For MacRae, more local production might mean more in-person writing rooms.
“I think the energy you get from being together is at that moment where you’ve been talking around an idea for two hours, and no one’s getting anywhere. And two of you go to the bathroom, and on the way there you go, ‘I suppose we could…’ and the whole thing unlocks,” he said.
That, perhaps, is the promise of a clarion call for a decentralized industry to make its way back to the once-mecca of film and TV production.
That is, if a tax break really materializes.