California aims to more than double annual tax credits for film and television production in the state to about $750 million, Governor Gavin Newsom said Sunday at a media event in Los Angeles.
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Published Oct 27, 2024 • 2 minute read
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(Bloomberg) — California aims to more than double annual tax credits for film and television production in the state to about $750 million, Governor Gavin Newsom said Sunday at a media event in Los Angeles.
“We needed to make a statement and do something that was meaningful,” Newsom, a Democrat, said at Raleigh Studios in Los Angeles, describing the recent decline of content production in California as a crisis. Michael Hackman, whose Hackman Capital Partners owns the Raleigh location and 600 other stages around the world, said the augmented rebates were “a good start.”
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The increase from about $330 million is subject to the state’s approval of California’s proposed 2025-2026 budget and would be the first major overhaul of the incentive program since 2014. It follows contact with local legislators and industry unions, many members of which have been without work in recent months.
Last year’s twin actors and writers strikes, as well as a pullback in content spending as entertainment giants such as Walt Disney Co. and Paramount Global seek to improve the profitability of their streaming services, accelerated a decline in California’s movie and TV productions.
Competitive Struggles
The state — home to Hollywood’s storied film studios — has struggled to compete with more generous rebates offered by the likes of Georgia, Canada and the UK, where big-budget pictures such as Superman from Warner Bros. Discovery Inc.’s DC Studios and Wicked from Comcast Corp.’s Universal Pictures were shot more economically than they would have been in California.
Earlier in October, local permit group FilmLA reported that filming in the greater Los Angeles area fell 5% in the third quarter, showing that Hollywood is still struggling to overcome the impact of the pandemic and the strikes.
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The group said that it had recently voiced support for the expansion of California’s Film & Television Tax Credit Program, but also argued it lacked funding and eligibility criteria compared with other states, which can offer greater incentives.
“Just as our competitors continue to innovate, California must do the same,” FilmLA said at the time.
Los Angeles Mayor Karen Bass said at the Sunday event that other states had outshined California in providing better rebates in recent years, but that Newsom’s new measures will help Hollywood bring jobs back to the state.
“We have to do everything we can to preserve and protect one of the foundational pillars of our economy in Los Angeles,” said Bass, also a Democrat.
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