L.A.\u2019s flagging production levels are an existential crisis for Hollywood, and my colleague Stacy Perman recently wrote a definitive account about how we got here<\/a>. As she noted, it\u2019s a tale of increasing costs, political inaction, stiff competition from other locales and, importantly, an overconfidence from Californians that Hollywood couldn\u2019t and wouldn\u2019t ever leave. <\/p>\n You\u2019re reading the Wide Shot <\/p>\n Samantha Masunaga delivers the latest news, analysis and insights on everything from streaming wars to production \u2014 and what it all means for the future.<\/p>\n By continuing, you agree to our Terms of Service<\/a>, which include arbitration and a class action waiver. You agree that we and our third-party vendors may collect and use your information, including through cookies, pixels and similar technologies, for the purposes set forth in our Privacy Policy<\/a> such as personalizing your experience and ads. <\/p>\n The problem goes back to the early 1990s, when \u201cThe X-Files\u201d first began shooting in Vancouver. Turns out the truth was out there \u2014 Canada was becoming a more film-friendly destination than L.A. with \u201cHollywood North\u2019s\u201d cheaper production costs, growing expertise for film crews and, eventually, tax credits that wooed even more projects to the region.<\/p>\n Over time, more states and countries ate California\u2019s lunch until last year, when the state finally took steps to revamp its film and TV tax credit program to increase the annual cap<\/a> to $750 million and expand the types of productions that could qualify for an incentive. That progress was cheered by industry groups, including studio executives and rank-and-file union crew members.<\/p>\n But while the tax credits have brought some production back to California, it hasn\u2019t been enough to fully halt the exodus.<\/p>\n For one, California\u2019s program has that annual cap on the total amount of money that can be awarded as production incentives, a limit that does not exist in other states and countries.<\/p>\n It also does not allow for reimbursement of expenses such as actors\u2019 salaries and other so-called above-the-line costs. That\u2019s a crucial difference many in Hollywood say will keep California less competitive than other locations, though such a provision is likely unpalatable in the broader state Legislature.<\/p>\n (More recently, film industry advocates have banded together once again to lobby against a broader corporate tax cap<\/a> passed this year that they say could jeopardize the job gains made by the state\u2019s production incentive program.)<\/p>\n In the meantime, many are still struggling. I\u2019ve seen this firsthand in my reporting on the production woes in L.A.<\/a> I\u2019ve spoken with vendors who navigated the COVID-19 pandemic and the 2023 writers\u2019 and actors\u2019 strikes only to be crushed by runaway production, forced to downsize their homes and accrue millions of dollars in debt. And that\u2019s not counting the thousands who have been laid off, retired early, moved out of state or changed careers, just to survive.<\/p>\n
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