For years, Gordon Ramsay and his hit MasterChef series called a renovated soundstage in Los Angeles home. From there, the contestants crisscrossed the 30-mile zone where Hollywood holds court, filming on location at luxury mansions and Michelin-starred restaurants. Tens of millions of dollars poured into the economy over the Fox show’s 14 seasons.
The company is also actively expanding into Australia, and Australia is actively appealing for the relocation of its production base. It was an attractive proposition. Unlike California, the burgeoning film hub allows unscripted shows to receive tax credits if they film there. Still, the math didn’t make sense, at least until problems arose that required major renovations to MasterChef’s LA soundstage. So starting next year, producers will fly to Australia with dozens of home cooks to film the big-budget network production.
“It’s unfortunate,” says Paul Audley, president of the licensing agency FilmLA. “We put a lot of effort into keeping them here.”
Production shipments from LA began little by little. A TV show set here in Georgia. The film chose to be shot in the UK. Immigrants are currently on the brink of an exodus. Since the strike ended last year, Hollywood has been hell-bent on making a comeback worthy of power lunch-filled days at the Polo Lounge. It is becoming clearer that the rebound is not yet here. Filming in Los Angeles is nearing historic lows, with the three months from July to September having the fewest shooting days this year, according to new data released by FilmLA on October 16th. This number is also lower than the number of shoots in the region during the same period last year, when work stoppages brought the industry to a standstill.
What started as hope that Hollywood would bounce back after the strike has turned into a dim hope that things might get better within the next year. Along with employment, production is also lower than expected. All categories of filming scripted content follow historical norms.
Part of the slump in filming in the city can be traced back to the decline from the so-called Peak TV era, when studios competed fiercely for subscribers to expand their streaming businesses. However, some data suggests that production levels in competing international film hubs are flat or, in some cases, rising. In the last quarter, the UK and Canada each had live-action scripted productions with budgets of $10 million or more actively filming within their borders. Meanwhile, sales in the U.S. fell 35% (251 to 163), according to industry intelligence platform ProdPro.
“As much as we’re seeing production setbacks, the majority of that is happening in U.S.-based projects,” said ProdPro CEO Alex Roberde, adding that New York has proven more resilient. (compared to 2022 production level of about 75%). 60 percent in other states).
Other data suggests that Los Angeles’ share of the film and television economy is shrinking, even though it remains in the lead. According to the Otis College report, the region accounted for 27% of employment in this sector in 2023, compared to 35% in the same period last year. It was. Californians now make up less than 30% of the company’s workforce, down 10% from a decade ago, according to the U.S. Bureau of Labor Statistics.
Hollywood celebrities have also taken notice, lamenting the exorbitant cost of filming and lobbying for more financial support. Speaking to The Hollywood Reporter at a September fundraiser, Judd Apatow said California will continue to move production to other states and countries unless California provides “a healthy tax rebate for the industry.” said.
The director, who has shot more than half of the film in the state, said: “It’s heartbreaking to see something like this happening because as people tighten up, there are very few situations where people just want to stay in the city.” It’s heartbreaking,” he said.
“Budget pressure is at the highest level in a decade,” a production executive at a major studio said. In the midst of fiscal austerity, he says, consideration of alternative locations has become “much more demanding” in order to maximize production tax credits. “We want to get as much profit as possible,” the executive added. “It’s rare now to do a show, not just scripted shows, but even unscripted documentaries, without any questions about the incentive aspect.”
Bottom line: Greenlighting a production is increasingly tied to an all-in-one budget. California leads the ball in this regard. The state’s film commission offers a 20 percent base credit for feature films and television series, which is more than most jurisdictions competing for Hollywood dollars, including New York, New Mexico and the United Kingdom. The program is capped at $330 million. It is the only major production base that prohibits some of the higher costs, such as salaries for actors, directors and producers, from being eligible for incentives. Britain has used its idiosyncrasies to win big-budget titles. These days, it has become a major destination for functions. So is Canada, which has the added advantage of a favorable exchange rate.
And while LA has long held sway without a script, that grip is rapidly loosening. The number of filming days for reality shows last quarter was one-third of the peak in 2022. Also, the region may not return to the same levels as before the work stoppage. Other states and countries are also making increasingly attractive bids for shows such as “Selling Sunset,” “The Golden Bachelorette” and “90 Day Fiancé.” In June, Illinois Gov. J.B. Pritzker signed a bill expanding the state’s tax credit program to include reality television, such as gaming, talk, and competition-based shows. Georgia has already authorized participation in this format.
The studio’s head of production points out that unscripted shows typically have much lower profit margins, which is why production companies are looking overseas. “It makes sense when you’re looking for the best deals on the planet,” the executive says.
The production slump is forcing some industry players to accept the fallout from the recent WGA and SAG-AFTRA agreement, which sets annual minimum raises to match inflation.
Preston Garrett, managing director of production company Rakish, has advocated for a moratorium on staff additions and a temporary reduction in the minimum wage until more work returns. “Is it more important to maintain what is considered fair inflation or to maintain sustainable crew rates that keep people working?” Garrett asks. “If we make the market more competitive, more jobs will be created.”
On Monday, Sony Pictures Entertainment CEO Tony Vinciquerra warned that agreements with major labor unions were holding back domestic production. “The terms of the contract are currently forcing production companies out of the United States,” he said at MIPCOM in Cannes.
“There’s a huge difference in California. California has been hit the hardest (and) has not responded at all to what’s going on in the incentive world,” Vinciquerra said. “The cost of doing business in California is very high, so it’s very difficult to price a movie.”
SAG-AFTRA national executive director Duncan Crabtree-Ireland said in a statement that Vinciquerra is spreading a “false narrative.” He added: “Threatening to move American jobs offshore is a cynical attempt to manipulate workers while concealing the industry’s own business failures.”
Other Hollywood veterans lament that Los Angeles is no longer a good hub for movies. It’s death not from one thing, but from thousands of cuts. Another example: the rising cost of filming permits. FilmLA implemented a number of fee increases last year. Some of the increases were related to inflation, while others were up around 8-17%. Among the service price changes were additional restrictions imposed by guidelines that worsened location budgets. Previously, a maximum of 10 permits were allowed in 14 consecutive days, but now only five permits are allowed in a seven-day period.
Jason McCauley, location manager for “Joker: Folie à Deux,” which was partially filmed in Los Angeles, said permit fees have doubled in some cases. “It’s not the deciding factor, but the cost is on top of what it normally costs to film here,” he added. “It’s not just permits. It’s labor, it’s fuel, it’s parking.”
Actor and producer Luke Burnett (Faith Based, Your Lucky Day) says he realized Los Angeles was in trouble when he saw the price tag for a one-day filming permit. “It’s hard to justify the fact that it costs thousands of dollars to film on your property versus being able to film somewhere else,” Barnett said.
Still, there is reason to be optimistic heading into the fall season, as Audrey said it will “make or break this year.” Some data shows that the number of production starts in the U.S. is steadily increasing, indicating that the slump in film production has bottomed out.
A version of this story first appeared in the Oct. 23 issue of The Hollywood Reporter. Click here to subscribe to receive the magazine.
