Can California Save Hollywood?

Southern California is facing a potential economic crisis as film and television productions increasingly migrate to rival states and international cities. More favorable tax incentives, expanding soundstage infrastructure and industry-friendly policies are pulling billions in production away from Hollywood. With New York poised to become the nation’s biggest production hub, local crews and lawmakers are worried about the exodus of talent and dollars. We talk with entertainment journalists about new tax incentives to keep productions in-state, and the long-term future of Hollywood.

Guests:

• Daniel Miller, Reporter, Politico
• Erik Hayden, executive editor, Business, The Hollywood Reporter

This is a computer-generated transcript. While our team has reviewed it, there may be errors.

Mina Kim: Welcome to Forum. I’m Mina Kim. California has increased its incentives for filming movies and television series in the state, yet it’s struggled to keep them from heading elsewhere, across the country or overseas. Now New York may soon overtake California in production dollars as it draws more projects, and compounding concerns over the Hollywood exodus are expected mass layoffs after Paramount and Warner Bros. merged to become Skydance. So, can California save its storied industry?

We’re joined this hour by Erik Hayden, executive editor of business for The Hollywood Reporter. Welcome to Forum, Erik.

Erik Hayden: All right, thanks for having me.

Mina Kim: Glad to have you. Also with us is Daniel Miller, reporter at Politico, who covers the intersection of entertainment, politics, media, sports, and technology. Daniel, glad to have you back on Forum.

Daniel Miller: Yes, great to be back on.

Mina Kim: So, the last time we talked, in July, California was trying to block the Paramount-Warner Bros. merger. Since July, of course, Rob Bonta and a dozen other states settled their antitrust lawsuit, and that merger to become Skydance went forward. So, Daniel, what impacts are people watching for in Hollywood?

Daniel Miller: Sure. So, this was a seismic deal, and it went through earlier this month, on October 6. I think you’re going to see a reset of the Hollywood landscape. In some ways, I kind of think of this as traditional Hollywood’s last stand. This is a new company that combines Paramount and Warner Bros., and CEO David Ellison has essentially said that his company needed to grow to take on leading streamers like Netflix, which effectively are tech companies, right? And so, this is a marriage of two traditional Hollywood players trying to compete with their Silicon Valley rivals.

Mina Kim: And could that mean, if they’re successful, more film releases for Hollywood, more work here that people have been wanting and needing for years now?

Daniel Miller: Right. Well, we do know that Ellison has committed — and there’s a consent decree related to this purchase — to releasing at least 30 films a year in the first couple of years of the merged company, and then it goes up to 32 films a year. I think there are some glass-half-full personalities in Hollywood who say that this will lead to more content being made. Certainly, that’s what David Ellison would tell you.

I think the proof will be in the pudding. We have seen some prominent Warner Bros. executives depart. This began right around the time the merger was set to close. Notably, Pam Abdy and Michael De Luca left Warner Bros. These are two star film executives, so they’re big boots to fill, and we’ll have to see what happens.

Mina Kim: Yeah. The other thing that we heard the Skydance co-CEOs just announce is that, since they’re carrying so much debt from this deal and need to realize, I guess, $6 billion or so in annual cost savings, it’s going to mean job losses. What did they tell us about this on October 6, shortly after the deal closed?

Daniel Miller: That’s right. So, this $6 billion figure has been out there for many months now. Paramount identified it back in the spring, and the company has said that they’re going to save money by combining, you know, technology, eventually integrating their two streaming platforms, and other efficiencies — boring corporate ones like procurement. But at the end of the day, what everyone in Los Angeles is focused on are these layoffs, these expected layoffs.

The company has not provided details on the layoffs or when they might occur, but we expect them to be significant. And it is worth noting that when David Ellison’s Skydance acquired Paramount just last year, mass layoffs ensued. This is a cycle that Hollywood is sadly accustomed to at this point, and I think it’s contributing to a real sense of anxiety, at least among the people I speak to in the industry.

Mina Kim: Yeah. Talk about that mood a little bit, Daniel. What are people feeling?

Daniel Miller: Yeah, so it’s not just these layoffs, right? It’s also kind of a sense of dread over the fate of the local production economy. And I know we’ll talk about that in depth later, but we have seen an exodus of filmmaking, films and TV shows departing California for other states and other countries that are offering these incredibly juicy tax incentives.

So, when you couple the loss of work for crews and others who work on these projects with the prospect of, you know, white-collar layoffs at the combined Paramount-Warner Bros., I think there’s really, sadly, a sense of despair in Los Angeles over the fate of Hollywood.

Mina Kim: Yeah. I was reading an LA County economics report that was suggesting 4,500 film and TV job losses from the merger. And that’s on top of, of course, reports that we’ve seen about some 50,000 or so job losses in Hollywood since 2022.

And Erik, with regard to this Hollywood exodus, one of the places you note that production is going is New York. You just wrote a piece about it. Why did New York jump out at you?

Erik Hayden: Well, they’ve been building soundstage infrastructure to a massive degree since 2020. I believe the number is a 43% jump in infrastructure, and it’s also tied in with the tri-state area and what’s commonly being referred to as Hollywood East — New Jersey, which has been one of the major production hubs growing over the course of the past year and a half.

In fact, one of the reasons I’m told from the New Jersey side that New York has jumped so high is that soundstage capacity was full in New Jersey. As more soundstages come online, remember, Netflix is building a big production base in Monmouth County. Paramount just inked a 10-year deal in the state, as well as Lionsgate’s NKTL-4, to be housed in Newark.

Mina Kim: So, it sounds like you’re saying that it can handle the load when production goes to that area.

Erik Hayden: Yeah, and California, to be clear, is still benefiting from being one of the biggest production hubs in the United States and the traditional home of Hollywood. In fact, some production has been retained through efforts like doubling the tax credit to $750 million.

We’ve seen other states — up-and-coming states — see much more volatile spending in their states compared to California. Places like New Mexico, for example, which was a huge production hub only a few years ago, have also seen production leave the state. That was one of the states we thought film and TV might be moving to.

Mina Kim: So, basically, California, I think as you noted, is still on top with regard to production spending. But why do you think New York could overtake it in spending? Are there just a lot more things happening in New York compared to California?

Erik Hayden: It’s a mix. It’s not one single big movie. You see that in the numbers. For example, in Georgia, the Superman sequel is shooting currently. In New York, they’re taking an increasing share of TV shows that shoot season after season in those same soundstages.

What California is trying to retain are big TV shows that shoot season after season on the same studio lots. One of the big losses of late was the news that American Idol is going to pack up shop. That’s something that’s gone on for 20 or so seasons and is moving to Atlanta. That’s an example of a show that carries a lot of crew and a lot of infrastructure and was great for Los Angeles to host for all those years.

Mina Kim: Right. We’re talking with Erik Hayden, executive editor of business at The Hollywood Reporter, and Daniel Miller of Politico, who covers the intersection of entertainment and politics.

And listeners, join the conversation. Do you work in the entertainment industry? Have you been affected by productions moving out of state? Tell us how, or just what questions you have about what’s happening with regard to this Hollywood exodus and the role that the entertainment industry plays in California and its economy.

You can email [email protected]. You can find us on Discord, Bluesky, Facebook, or Instagram at KQED Forum. And you can call us at 866-733-6786. Again, 866-733-6786.

So, Daniel, Erik listed a bunch of states that are options for people in Hollywood to go to. And, of course, there are also many options overseas. You noted in your piece, called “The Massive Movie-Making Exodus from Hollywood,” that it’s almost like film production has turned into an international auction. Say more about that. Where are people going?

Daniel Miller: That’s right. Countries including Canada, Australia, and the United Kingdom have developed robust production ecosystems, and this has allowed them to win away billions and billions of dollars of business from the United States.

There was a time when people in Hollywood might have been able to say, “Oh, the crews overseas don’t have the sophistication to take on the complicated projects that our industry wants to make for film and television.” I don’t believe that’s the case anymore. For decades now, these countries have invested in educating crews and workforces so that they can deliver a world-class production environment.

This exodus of film and TV production overseas has led Congress to try to take action. Recently, Congress, in both the House and the Senate, introduced legislation that would create a federal film and television production incentive. The idea behind it is to lure back some of that business that has migrated elsewhere.

Mina Kim: Yeah, it sounds like it’s something that the U.S. — I know that the president has weighed in on this, too, and I’m not sure it’s because he so much favors California as much as he would not like to see the U.S. fall in terms of being central to film and television production.

We also have this comment from Matt in Oakland, who writes, “I’ve heard that Rob Lowe’s game show The Floor is filmed in Ireland. How is it cheaper to bring the host, a large number of contestants, and anyone else the show might need all the way across the Atlantic than to film here in the U.S.?” Daniel?

Daniel Miller: Yeah, that is one of the prominent examples of departures that I think really has galled people. The reality is that these tax incentives offered by the United Kingdom and elsewhere are incredibly lucrative.

At the end of the day, some may have a romantic notion about Hollywood being situated here in Hollywood, right? But the bean counters at these studios would say otherwise. They want efficiencies in the market, and right now that’s in places like the United Kingdom. That’s why you’re seeing projects end up there.

Mina Kim: We’re talking, listeners, about the Hollywood exodus and efforts to keep productions in California. You can join the conversation at [email protected], on Discord, Bluesky, Facebook, or Instagram at KQED Forum. And you can call us at 866-733-6786. Again, 866-733-6786.

More after the break. I’m Mina Kim.

Welcome back to Forum. I’m Mina Kim. We’re looking at the challenges Hollywood is facing as film and TV productions increasingly migrate to other states or even other nations. Producers are chasing favorable tax credits and industry-friendly policies, and Daniel Miller and Erik Hayden have been following this closely.

Daniel Miller is a reporter for Politico. Erik Hayden is executive editor of business for The Hollywood Reporter.

And listeners, do you work in the entertainment industry? Have you been affected by productions moving out of state? What questions do you have about the impacts of that? And what show are you surprised isn’t made here? 866-733-6786 is the number. You can email [email protected] or post on our social channels.

You know, even shows about California, right, Erik, are not being filmed in California. I think East of Eden has had a lot of filming in New Zealand.

Erik Hayden: Yes, that’s correct, which is ironic for a Steinbeck title. But interestingly, California is fighting back by giving its tax credit allotments to stories that sort of show the Golden State in a light for audiences.

You see one of the big tax-credit titles, the Snoop Dogg movie, shooting in L.A.; Ang Lee’s Gold Rush movie shooting in Sacramento; and, of course, the Baywatch reboot, which is filming in Venice Beach, which is sort of the L.A. torchbearer for broadcast right now.

Mina Kim: Yeah. So, talk about these tax incentives. You mentioned that they have doubled to $750 million annually, which I think was a very significant increase. What should we know about that, the hopes for what it will do, and whether or not that’s really come to pass so far?

Erik Hayden: Well, I think the idea is to keep California as competitive as the rival states that have increasingly both built up infrastructure and offered these incentives as well. The idea, as you hear from state and local officials, is that filmmakers would like to stay at home, but they need California to essentially subsidize that.

One interesting thing is that increasingly a lot of these dollars are going to animated projects as well, to keep them in the state. That was part of the latest round of tax credits, I think earlier this month.

Mina Kim: Daniel, those tax credits were passed last year, but it sounds like — or is it fair to say that people hoped they would drive a bigger rebound? Or is it too soon to say?

Daniel Miller: I think the optimistic people would say it’s too soon to say. We have seen some returns on that investment. But the reality is that the California program is far from perfect, despite being doubled last year.

For example, the California production incentive does not allow commercials to be included. So, you see other states like Illinois stepping in to fill that void because they have a production incentive that includes commercials.

I do think the legislature is taking this seriously. We should note that earlier this year, the legislature passed, and Governor Newsom signed into law, a new standalone post-production incentive. You can think of post-production as all the work that happens after filming has stopped, so things like scoring and visual effects. That business has been departing the state for other places, including New York, and this new incentive is meant to claw some of that back.

So, I do think legislators in Sacramento are taking this seriously. It’s just that they are fighting off not only other states but other countries.

Mina Kim: Let me go to caller Jonathan in Novato. Hi, Jonathan. Go ahead. You’re on.

Jonathan: Hi, thank you for having me. I’m a local producer, originally from L.A., and I live up in the Bay Area now. I’ve been producing commercials and visual effects for features for decades. And I can tell you that it’s always been called, you know, “runaway production” — all the production that’s left California and originally migrated north up to Vancouver and so on, and then went across Canada and wound up in Toronto.

But I see it differently. I see it as pushed-away production, and it always has been for decades. I’ve had to bid projects, mostly commercials, that have to shoot out of state or out of country, or we shoot a portion of it in-country and then do our post elsewhere, and that sort of thing. So, California is really behind the bar as far as getting on it with incentives, and it’s just not moving quickly enough.

Mina Kim: Well, Jonathan, thanks for sharing where you’re at with that and how you feel about it.

I mean, Erik, it does feel like state and local leaders sort of miscalculated the threat of other states and nations undercutting California. How? Why do you think that happened?

Erik Hayden: Well, I mean, the fact that these incentives were only doubled in 2025 sort of says it all. I think having Hollywood as a home base in Southern California has led to an aspect of taking it for granted.

But also, what I hear from filmmakers is that the permitting process isn’t as streamlined locally as they’d like. You see both candidates for the mayoral election in L.A. pledging to further cut red tape, which they say is holding up filmmakers from easily accessing locations and shooting in some of the iconic spots in California.

Mina Kim: Yeah. Let me go to George in San Jose next. George, go ahead. You’re on.

George: One of the reasons touted for the Hollywood location was that the Southern California climate afforded easy filming. In other words, it doesn’t rain in the summertime. You just do your outdoor filming in the summer, and you do your indoor filming in the winter, and then you’re all set. So, is there a reason that that’s no longer as big of an advantage? Are there technology reasons, et cetera?

Mina Kim: George, thanks. Daniel, you want to take that first?

Daniel Miller: Sure. Yeah, the caller is right. The Southern California sunshine, the access to both snowy mountains and the Pacific Ocean, was really alluring a hundred years ago.

George: And, you know, it’s still —

Daniel Miller: And it’s still alluring these days, but the reality is that technology has really leveled the playing field. So much of film and television production is done against a green screen inside a studio, a soundstage, with equipment that, you know, the likes of Charlie Chaplin could never even have imagined.

I think the improvement of all that filmmaking technology is a reason why movies can really be made anywhere. And, you know, I think also the rise of global, easy travel has made it not so difficult, not so bad, to get on a plane and head to Poland to make your next movie instead of — right? The world’s just much smaller.

Mina Kim: Daniel, who gets hurt most when productions move? You know, we’re familiar with the top-billed talent, right? But what about the crews who work on these films?

Daniel Miller: Yeah, I think you could easily make the case that it’s the crews who suffer the most. And it’s not just the crews, but also all the ancillary businesses that support a production. I’m thinking about the dry cleaners, the caterers, the florists, the drivers who are working in and around that production to make it go off seamlessly here in Southern California.

These are companies that have been embedded in this ecosystem for generations. And I think there’s a real existential question that people here are wrestling with as to whether a certain way of life in Los Angeles is even still attainable. It used to be that you’d come out to Los Angeles and get a job on a film set, maybe start renting a home in the San Fernando Valley, and you’d have, you know, I know it’s cliché, a little bit of the American dream.

I do think that that sort of pathway is being closed off to people, and many of the people who are still working in that way seem to be hanging on for dear life.

Mina Kim: Yeah. What have they been telling you about how it’s affected their livelihoods?

Daniel Miller: You know, it’s interesting because, because of the Paramount-Warner Bros. merger, there have been many town halls in Los Angeles to discuss that deal in recent months. I remember attending one where, during a Q&A, a woman who works as a makeup artist in Hollywood tearfully described how this was her livelihood. This was her passion. It was really the only thing she knew how to do, and she did it well. And she no longer had the opportunity to practice her craft.

She spoke about how devastating it was, not just financially, but also emotionally. And I think you can multiply that story literally by the thousands here in Los Angeles. It was heartbreaking to hear.

Mina Kim: Yeah. Is there anything you would add to my question to Erik about how state and local leaders sort of allowed this to happen, to some extent? I know there are a lot of additional pressures that are not under their control, but to some degree, did they miscalculate the threat of these other countries and other states pulling work away from California?

Daniel Miller: Yeah, I mean, look, I don’t think I’m going out on a limb to say it comes down, at least in some cases, to hubris — a sense that this is the epicenter of entertainment and that, of course, these productions would remain here.

And I think that, in a very true sense, executives could, for decades and decades, point to the expertise of their crews, the beauty of our locations, and, of course, that great weather. But the reality is, the system has changed. I think that’s part of why Hollywood has been slow to react, because it had that sense of pride and, like I said, hubris about all that we have to offer here. But things are just different these days.

Mina Kim: You go in depth in your piece, Daniel, about how Illinois is trying to position itself as a major player. What are some of the things they’re doing that jumped out at you?

Daniel Miller: Yeah, I think Illinois is incredibly instructive for this conversation because it not only shows what’s going on in Illinois, but it demonstrates perhaps a lack of imagination in California.

I think the easiest thing to highlight is a new green production incentive that Illinois recently introduced. Basically, projects that can show they’re sustainable and meet certain sustainability goals get an extra five-percent kicker on their production incentive. That makes it quite lucrative in Illinois if you do have a sustainable production. It’s the first of its kind in the country, and it’s being touted by producers and others as the reason why they’re moving their productions to Illinois.

I think you can tell by my tone that California does not have such a program.

Mina Kim: That said, though, these tax incentives essentially subsidize major companies. Why do states want them so badly? What kind of return do they see on these investments? In addition to maybe the intangibles that we don’t see, do you know?

Daniel Miller: Yeah, and I think there are a few different ways to answer that question because, of course, there’s the dollars and cents of it. When I interviewed Governor Pritzker of Illinois, he told me that their production incentive has to pencil out. It cannot end up in the red. It needs to end up in the black, and so far it is, in terms of the economic benefit it’s generating for that state.

It really depends on the makeup and structure of each state’s incentive to say whether it’s a boon. There are some states that really, really emphasize local labor — that productions receiving these incentives have to use local labor, because that, of course, contributes to the economy more than flying in a crew from California. That’s something I know Illinois has done.

I know Georgia has had to strengthen its rules around the use of local labor because, when major productions have fled that state — and we know that many Marvel movies used to film there but no longer do — you’re losing not just the revenue from the production, but you’re losing expertise, too.

Mina Kim: And I think you also noted, Erik, that for states, it can also mean a tourism boost, as it did in New Mexico.

Erik Hayden: Yeah. I was talking to the New Mexico film director, and clearly this is also a state that boomed through 2022 but has seen a decline in filming over the past several years.

Even if the dollars and cents are challenged by a congressional or legislative budget analyst, a report, or a study, there are the intangibles — say, the tourists who come to the state because of Breaking Bad or Better Call Saul. That tourism spurs a halo effect for the state.

So, it’s sometimes hard, when these conversations come up, to ask, “Do the economics justify it?” It’s not just about the cast and crew being employed, even though those are the jobs for the industry. As far as the benefit to the state, you’re also producing things that can make the state globally known and spur things in ways that a report on dollars and cents can’t really pick up.

Mina Kim: Hmm. Let me go to Thaddeus in Sacramento. Thaddeus, go ahead. You’re on.

Thaddeus: Hi. One point that is maybe harder to accept, especially when it comes to foreign competition and foreign markets over the years, is that the reason production went there is because labor primarily was — and is — so much cheaper. We’re talking fractions of what it costs to crew up here in California or the rest of the country, for that matter, as well as all the other expenses.

I’m arguing that we should pay our crews as well as we do because of sustaining the middle class that we’ve built there. Tax incentives can’t help us out of that existing reality that made the economics of these other markets attractive.

But I would argue that if we keep on going long enough, those other markets will start losing their competitive edge as their industry grows and their bench deepens and people get paid more. Then they’ll come back to California, if we still have an industry to come back to.

Mina Kim: Hmm. Thanks, Thaddeus. What do you think, Erik, about what Thaddeus is saying? Is that partly why some productions have gone out of the country — the labor costs?

Erik Hayden: To the caller’s point, some of these other markets have matured to the point that they’re losing film and TV projects as well. In the latest quarter, according to ProdPro, which tracks all these numbers, the only country among the major Western ones that saw an increased filming count was Australia. Canada saw a decline, the UK saw a decline, and the U.S. overall saw a decline.

So, it’s an arms race for these incentives everywhere. But as the rivals scale up, you can see that it’s a little bit of a zero-sum game if everybody is geared up to take these film and TV projects.

Mina Kim: Yeah. A listener writes, “Are tax incentives just a race to the bottom? Do we risk spending so much in subsidies that anything the production spends here in California winds up being moot?”

I don’t know if that’s the case, Daniel, but I do hear, in both you and Erik, a cautionary note about states going too far as well, right? States like Georgia and so on.

Daniel Miller: Yeah, that’s fair to say. I think in some cases states have gone too far, right? The allure of Hollywood, the glamour of maybe hosting the movie premiere for a film that was shot in your state, can get states to perhaps get out over their skis on how generous their incentives may be.

I think, in general, what many states are looking for, both red and blue states, is a federal production incentive. This sort of tax credit layered on top of a state incentive is seen as a way to turbocharge the production economy in the United States and win back some of that overseas business.

Mina Kim: So, that’s what it would do in terms of working with individual state film industries. And you see it being a big boon for California — a federal tax credit?

Daniel Miller: I think it could be quite a boon for California. And I think states with strong programs, including California but also states like Georgia, Illinois, Louisiana, and New Jersey, could see an uptick in business if the federal production incentive is passed by Congress.

It would be layered on top of the state incentive, like I said, so you’re stacking these credits. That would make the states I just mentioned more friendly to film than perhaps even some of our biggest rivals, like the United Kingdom.

Mina Kim: What’s the status of it, Daniel?

Daniel Miller: The legislation was introduced in Congress this fall, and the backers of it, including Representative Laura Friedman here in Burbank, who herself is a former film producer, say they want a vote on this by year’s end during the lame-duck session. So, this is coming down the pike.

Mina Kim: We’re talking with Daniel Miller, a reporter at Politico who covers the intersection of entertainment and politics, as well as media, sports, and technology. Erik Hayden is also with us, executive editor of business at The Hollywood Reporter.

And so are you, listeners, at 866-733-6786 or the email address [email protected]. Stay with us for more after the break.

I’m Mina Kim. This is Forum. I’m Mina Kim. We’re talking this hour about Hollywood, the exodus from Hollywood, and efforts by California and the federal government to keep productions in the state and in the country, as film and TV productions increasingly migrate to international cities.

We’re with Daniel Miller, a reporter at Politico, and Erik Hayden, executive editor of business at The Hollywood Reporter, and with you, our listeners.

Do you work in the entertainment industry? Have you been affected by productions moving out of state? What questions do you have about those effects? What questions do you have about the role the entertainment industry plays in the state, our economy, our culture, and our tourism? Do you think state lawmakers should be doing more to keep productions here?

The number is 866-733-6786. You can find us on Discord, Bluesky, Facebook, or Instagram at KQED Forum, and you can email [email protected].

Discord user Jeff writes, “High living costs and external tax credits reduced local animation and VFX studios that started in the SF Bay Area. Displaced workers did not move to Los Angeles. Production there also decreased. Many personnel moved out of the state or out of the country to be subsidized — to subsidize locations such as Canada and the United Kingdom. Remaining personnel moved into regional technology companies, video games, and software development.”

On Bluesky, Kevin in Oakland writes, “I’m a filmmaker. Recently, an executive from Disney cited not having to make union health care contributions when shooting in the UK as a cost saving that adds to the incentive to film there. Passing universal health care either in the U.S. or California seems like an under-discussed way to lower costs for films and keep production here, and it would have broad-based support in a way industry-specific tax credits do not.”

Another listener on Bluesky, MJ, writes, “Michigan offered a 40% production tax credit in 2008, luring such productions as Gran Torino, but it was discontinued in 2015, with the governor estimating the tax credit lost the state 89 cents for every dollar spent.”

Again, that cautionary tale, Erik, that I was mentioning, that you and Daniel are also noting with regard to places going too far.

But tell me just generally how you’re feeling, Erik, in terms of hope. I’m curious, as somebody who has been covering this for some time, what you think about where all of this is heading and whether you’re actually feeling hopeful about Hollywood’s long-term future.

Erik Hayden: I think there’s a lot of excitement right now when talking to producers about that federal film and TV tax credit, not only for the major hubs, but there’s a reason why this is a bipartisan effort.

You see Senator Tim Scott pitching South Carolina, which is not known as a production hub. I think it points to the fact that The Notebook and Forrest Gump shot there. Insiders have told me, “Watch out for Florida” as a surprise film location if this federal tax credit gets passed.

So, I think there are locations that GOP representatives, Democrats, and Hollywood can all get excited about. I think that could shake up the production landscape beyond these five or six major production hubs in the United States. And I think that’s kind of an exciting thing to watch. Is it a state like Florida or South Carolina, which clearly aren’t big right now? Could we start to see some movement if this legislation is indeed passed?

Mina Kim: You know, the bipartisan nature of this does make it feel more likely to pass. But, Daniel, what do you think are the ways Hollywood will need to readjust? I don’t know, just the way it thinks about itself, right? I imagine it still has a very strong pull, and there is something very powerful about Hollywood as a center of gravity. But do you think there needs to be an adjustment in the way that it works with all these emerging players in the country, especially with the tax credit?

Daniel Miller: Yeah, I think one reason to be optimistic is that Hollywood is adjusting and understanding that the ways of doing things in decades past won’t cut it any longer.

I think it’s fair to compare Hollywood unfavorably to the tech industry in California in terms of tech’s ability to advocate for itself in both Sacramento and Washington. You need only look at the R&D tax credit in California to get a sense of that. Tech companies avail themselves of this R&D credit, and it’s worth more than $3 billion a year. So, it dwarfs the film and television production incentive in California, which is something like $750 million a year.

That right there shows you how one industry has really advocated for itself in a way that has paid dividends. I think we’re starting to see that with efforts like this new post-production incentive in California and the push for the federal production incentive. That kind of interfacing with government may be something Hollywood needs to be focused on.

Mina Kim: Well, David in Napa writes, “Streaming platforms are deemed a threat, yet Netflix just announced big layoffs. What is up with that? How worried should Hollywood be about Netflix?”

Yes, the company just announced that it’s cutting a thousand jobs. Will that have a big effect here in Hollywood? Daniel, I’ll start with you.

Daniel Miller: Well, I think anytime a company cuts a thousand jobs — something like 6% of its workforce — it’s a cause for concern. People getting layoff notices this week, their worlds are upside down, and we shouldn’t minimize that.

At the same time, whether this affects your ability to watch your favorite program on Netflix — that’s not going to happen. I think Netflix is a company that for years developed groundbreaking and award-winning content and has had a bit of a lull, not in terms of volume, but in terms of having that water-cooler hit it has had in years past with something like Squid Game.

So, I think that, to some extent, the content business is cyclical, right? But these layoffs and the dismissal of some senior executives indicate that the company feels it needs to make some serious changes in terms of what it’s greenlighting and what it’s making.

Mina Kim: Yeah. Erik, would you agree with Daniel’s assessment? What was your reaction when Netflix announced that?

Erik Hayden: I think with Netflix, the important figure to look at is the $20 billion that it’s still earmarked to spend on content for 2026. Obviously, yesterday Netflix unveiled its earnings and made some adjustments, but if anything, what the CEOs said was that they needed to execute better versus changing their overall strategy.

That means coming up with what they would view as bigger and better films and TV series that move the needle in terms of engagement.

A wild card is if they start spending more of that $20 billion on sports rights, which could impact Hollywood content in the sense that a greater share of money is going to sports rights than movies and TV shows. But that’s more speculative in terms of strategy. For now, they’re looking to execute better, and that means more great film and TV shows.

Mina Kim: Well, Collette in the East Bay asks, “Is there any type of production that’s most likely to stay here in California? Is there anything we do better and cheaper than anywhere else?”

Erik, you noted — or maybe it was Daniel — that California productions have an incentive to stay, meaning if the show is about California, and so on. But I’m just wondering how you would answer Collette’s question. Are there any types of productions that are more likely to stay?

Erik Hayden: I think right now — I’m not sure about cheaper — but there is a large infrastructure for broadcast series, and I believe California still has the largest number of broadcast shows going into production. These are the shows with 20-something-episode counts a season, for instance.

Skydance is indicating that they’re eventually going to make one of their lots TV- and streaming-focused and another lot film-focused. That could be the Warner Bros. lot, since it’s much bigger than the Paramount lot, for TV seasons.

So, in addition to shows like Baywatch, I think one of the shows that’s been held up as representative of Southern California is The Pitt. It’s critically acclaimed, brings jobs, and recurs for multiple seasons. Producers might point to those types of big-swing shows and recurring shows as the ones they’d like to get into their soundstages for multiple years at a time.

Mina Kim: Yeah, we actually have a listener referencing The Pitt. The listener writes, “The Pitt is filmed in L.A. on a pretty old-fashioned schedule, a large number of episodes with a new season every year. How likely is it that other shows will follow suit?”

I guess that is the question, Daniel.

Daniel Miller: That is the question. And look, I also think it’s worth noting that there are certain pedigreed projects with A-list actors or filmmakers that are going to continue to shoot in Los Angeles and in California because that’s what the story dictates, right?

If you’re Steven Spielberg and you’re making a movie like The Fabelmans, and that story takes place in California, you’re going to get to shoot it in California. Indeed, that’s what he did back in the early 2020s.

So, look, there’s always going to be production here, and we still have in California a depth of workforce when it comes to crews and others that’s really unmatched, despite the gains elsewhere.

Mina Kim: But, Daniel, Erik noted Skydance. Aren’t there concerns that its need to cut costs will mean it makes those 30 or so films — or many of them — elsewhere, out of Los Angeles?

Daniel Miller: Yeah, I think that’s kind of the conundrum and the question mark with Skydance. The company has said it’s going to spend aggressively on content. David Ellison, at a press event in early October — I was in the room for it — told reporters they were going to spend more than any company, including Netflix and Disney, on content.

I think financial experts looking at the balance sheet, looking at tens of billions of dollars in debt, wonder how that’s possible. It’s the sort of thing we’ll have to see — whether Ellison is true to his word.

Mina Kim: Let me remind listeners you’re listening to Forum. I’m Mina Kim.

So, Erik, should we then not take comfort in the fact that Ellison didn’t move his headquarters to, I don’t know, Tennessee or New Jersey or somewhere else?

Erik Hayden: Tennessee and Texas were the ones that had been floated and that Paramount executives had engaged with. I think putting that in the rearview mirror focuses attention on what both state and local officials can do for Skydance and what Skydance can show it’s producing in the state.

As Daniel noted, they don’t have to shoot these 30 movies in California, and the vast majority probably won’t be shot in California, depending on what tax incentives they get.

Although Paramount, just to use one example, did just get close to $30 million to shoot an untitled crime thriller in California by pledging to spend about $83 million. So, that’s one example of a movie they’ll be shooting in-state.

Mina Kim: Hmm. Let me go next to caller Henry in Santa Rosa. Henry, go ahead. You’re on.

Henry: Yeah, something that doesn’t get discussed much — I worked in the business most of my professional career, and my wife still works in it — is health care. They’re taking films to nations, not other states, with socialized health care. Will the tax credits compete with that? Who knows?

On another aspect, AI: My wife is doing a film in San Francisco, a hundred-million-dollar-budget film. She got a significant amount of money. She works in wardrobe. And then every week, they said, “No, we’re going to cut this. Well, how do I get the background? How do I dress background?” “Oh, we’re going to do that with AI. We can make it look real.”

When you put those two together, I don’t see how these tax credits will save the business. They’ll keep it to some degree in California. But another thing Scott mentioned is that across the gamut of the trades of the crew, it’s a devastation out there. It is bad. It’s Great Depression time, and no one ever talks about that. Yeah.

Mina Kim: Henry, thanks. Yeah, Daniel, we were noting that, and just the very poignant things you witnessed when you were hearing people talk about their concerns around the Paramount-Warner Bros. merger and so on.

But I think Henry is bringing up the broader pressures Hollywood is facing: AI, of course, and it’s also recovering from the actors’ and writers’ strikes, with people worried about AI’s effects on that. Do you have a reaction to the things Henry brought up, Daniel?

Daniel Miller: Yeah, I think we’ve now heard health care costs mentioned twice on this show. I think that really does show you where people’s anxiety is resting.

I want us to note that the rising cost of health care was a major issue during labor negotiations for some of the Hollywood guilds that were negotiating new contracts earlier this year. We did not have strikes from the Writers Guild and others, and I think we need to point out that’s in part because the guilds and the producers came to agreements that would infuse their health plans with tens of millions of dollars, giving them, you know, a bit of stability and a path forward.

So, again, this is not the glamorous side of Hollywood, but this is what people working in the industry are worried about — whether they’re going to still have health care.

And I have to say, when I spent some time in Illinois, I met with a producer working on a commercial that I saw being filmed. He told me that in years past, he wouldn’t have taken the gig. It wasn’t worth all the effort to go from California to Illinois to make this commercial. But he was worried about logging enough hours to qualify for his guild’s health plan. That’s really why he took that assignment. And I think that shows you just how upside down things are right now in this business.

Mina Kim: Yeah. Listener Matthew writes, “Have any A-list actors and directors used their clout to insist on filming in California? Has anybody well-known in the industry done anything to save the industry, or even just a particular production? Do either of you know of any examples here?”

Daniel Miller: Yeah, I can speak to that a little bit. Noah Wyle, the star of The Pitt, has spoken forcefully about the benefits of shooting that show in California.

During the spring, Adam Schiff and Laura Friedman held a spot hearing on this production crisis out in Burbank. I attended it, and Wyle came and testified in front of Friedman and Schiff. He explained the economic benefit that The Pitt was bringing to California and why he felt he had to make it here.

It was a pretty forceful declaration of the importance of local production. But, you know, there are not a lot of Noah Wyles out there.

Mina Kim: No, there are not.

This listener, MC, writes, “Productions leaving California cost us economically, but do we also lose out in cultural capital? How does the industry change beyond just the financial bottom line as films and TV leave the state?”

Erik, your thoughts on that question?

Erik Hayden: I mean, I do think Hollywood is all about aspiration, and that’s what L.A. is selling. I think there’s, again, an intangible aspect to keeping Hollywood in Hollywood, even if it’s just psychological.

I think people who work in the industry don’t want the studio lots to become, you know, just studio tours. They want them to be real-life working lots with soundstages that have shows being filmed in them.

And while some of the studio lots are occupied and busy, there’s been a bunch of speculative, independently owned studios or soundstages in Los Angeles that have been struggling with occupancy rates over the past few years. I think that’s where it gets into that psychic question.

Mina Kim: Yeah. Well, Erik Hayden, executive editor of business at The Hollywood Reporter, thank you so much for talking with us.

Erik Hayden: Thank you.

Mina Kim: And Daniel Miller, reporter for Politico, covering the intersection of entertainment, media, sports, technology, and politics. Always glad to have you on with us as well.

Daniel Miller: Thanks for having me again.

Mina Kim: And listeners, thank you for sharing your experiences and questions. My thanks to Jared Sport for producing this segment. You’ve been listening to Forum. I’m Mina Kim.