For years, Gordon Ramsay and his success MasterChef franchise called a converted stage in Los Angeles home. From there, contestants trekked across the 30-mile zone where Hollywood holds court to film on location in palatial mansions and Michelin-starred restaurants. Tens of millions of dollars flowed into the economy during the Fox show's 14 seasons.
Enter Australia, which has aggressively urged manufacturing to relocate. It was an attractive proposition. The thriving film hub, unlike California, allows unscripted programming to receive tax credits for filming there. However, the calculations didn't make sense, at least not until problems arose with MasterChefThe Los Angeles stage emerged that would require major renovations. So, starting next year, producers will fly in dozens of home cooks – and the riches that come with a big-budget network production – to film in Australia.
“It's distressing,” says Paul Audley, president of the FilmLA licensing office. “We've worked hard to try to keep them here.”
The production's escape from Los Angeles began as a trickle. A TV show that moves here to Georgia. A film that chooses to shoot there in the UK. Today migration borders on exodus. Since the strikes ended last year, Hollywood has been holding its breath for a return worthy of the Polo Lounge's busier power lunch days. A clearer picture is emerging that the recovery has yet to materialise. New data released by FilmLA on October 16 shows that filming in Los Angeles is approaching historically low levels, with the three-month period from July to September seeing the fewest days of filming this year. The figure is even lower than the number of shootings that occurred in the region in the same period last year, when industry was at a standstill due to the workers' strike.
What began as an expectation that Hollywood would recover after the strikes has turned into a muted hope that things might improve by next year. Production, along with employment, is below projections. Each category of shooting for scripted content follows historical norms.
Part of the decline in filming in the city can be traced to the contraction that occurred in the so-called Peak TV era, when movie studios competed fiercely for subscribers to grow their streaming businesses. But some data indicates that competing international film centers are seeing stable, or in some cases increasing, production levels. Last quarter, the UK and Canada saw more live-action, scripted titles with budgets of $10 million or more actively filmed within their borders. The United States, meanwhile, saw a 35% decline (from 251 to 163), according to industry intelligence platform ProdPro.
“To the extent that production has retreated, the vast majority of that is happening to U.S.-based projects,” says Alex LoVerde, chief executive of ProdPro, who notes that New York has proven more resilient (about 75 % of 2022 production levels compared to about 60% in other states).
Other data suggests that Los Angeles' share of the film and TV economy is shrinking, even as it remains at the top. According to a report from Otis College, the region saw an industry employment share of 27% in 2023 – an indication of its share of national manufacturing – compared to 35% the previous year. According to the U.S. Bureau of Labor Statistics, Californians today represent less than 30% of the company's workers, 10% fewer than a decade ago.
Hollywood luminaries are taking notice, lobbying for more financial support and complaining about sky-high filming costs. Talking to The Hollywood journalist during a fundraiser in September, Judd Apatow said California will continue to cede production to other states and countries if it doesn't implement a “healthy tax break for our industry.”
“It's heartbreaking to see this happen because as people tighten their belts, there are very few situations where people can stay in the city simply because they want to,” said the director, who has shot more than half of his films in the state.
A production executive at a major studio points out that “budget pressure is at its highest level in 10 years.” Amid this financial austerity, he says there has been “a lot more scrutiny” in considering alternative locations to ensure production tax credits are maximized. “We want to get the highest possible yield,” adds the manager. “It's rare that we do a show without asking questions about the incentive aspect, not just in the script, but all the way down to documentaries and documentaries now.”
The result: the green light for production is tied to budgets that increasingly take every penny into account. On this front, California is behind the ball. The state Film Commission offers a 20% base credit for feature films and TV series – lower than most jurisdictions vying for Hollywood dollars, including New York, New Mexico and the United Kingdom – and has a cap of 330 million dollars on the program. It is the only major production hub that prevents any portion of costs above the threshold, such as salaries of actors, directors and producers, from qualifying for incentives. The UK has exploited this idiosyncrasy to attract big-budget titles. It has become a major destination for features in recent times. The same goes for Canada, which has the added benefit of favorable exchange rates.
And while Los Angeles has long maintained a stranglehold on the unscripted, its grip is rapidly loosening. There were a third as many shooting days for reality TV in the latest quarter compared to 2022 highs. And it may not return to the same levels in the region as before the work stoppage. Other states and countries are making increasingly attractive offers for the likes of Selling the sunset, the golden hen party AND 90 Day Fiance. In June, Illinois Gov. J.B. Pritzker signed a bill that expands the state tax credit program to include game, speech and competition-based shows, among other types of reality TV. Georgia already allows the format to qualify.
The studio's production executive notes that margins for unscripted programming are typically much lower, which has pushed productions to look abroad. “This is just a natural part of finding the best deals on the planet,” the executive says.
The decline in production has forced some industry insiders to reconcile with the impact of the most recent WGA and SAG-AFTRA agreements, which structure annual minimum increases to address inflation.
Preston Garrett, CEO of production company Rakish, supports a moratorium on crew raises and temporarily lowering minimums until more work returns. “What matters more, keeping up with what is considered fair inflation or sustainable crew rates that keep people working?” Garrett asks. “If we make the market more competitive, more jobs will come.”
On Monday, Sony Pictures Entertainment CEO Tony Vinciquerra warned that deals with major unions were suppressing domestic production. “The terms of the contract are forcing productions out of the United States now,” he said at MIPCOM in Cannes.
“There is a very significant difference in California, which has been hit the hardest [and] it just didn't respond to what's happening in the world of incentives,” Vinciquerra noted. “The cost of doing business in California is so high that it is very difficult to price a movie.”
In a statement, SAG-AFTRA national executive director Duncan Crabtree-Ireland said Vinciquerra was spreading a “false narrative.” He added: “Threatening the relocation of American jobs is a cynical attempt to manipulate workers by masking the industry's corporate failures.”
Other Hollywood veterans complain that Los Angeles is simply no longer a film-friendly hub. It's not just anything, it's death by a thousand cuts. Another example: the rising cost of shooting permits. Last year, FilmLA rolled out rate hikes on a number of commissions. While some increases were tied to inflation, others represented markups of between 8 and 17 percent. The changes to service prices include additional guidelines-imposed limitations that have added to venue budgets. A permit that previously allowed up to 10 locations in 14 consecutive days now allows only five locations in seven days.
Jason McCauley, location manager of Joker: Folie a Deuxwhich was partially filmed in Los Angeles, says he's seen rates double in some cases. “It's not the deciding factor, but the costs, on top of what it would otherwise cost to shoot here, become expensive,” he adds. “It's not just about the permits; it's labor, fuel, parking.
Actor and producer Luke Barnett (Faith-based, Your lucky day) says he knew Los Angeles was in trouble when he saw the price of being allowed to film for just one day. “The fact that it can cost thousands of dollars to shoot on a property you own, it's hard to justify if you can do it elsewhere,” Barnett says.
There is still reason for optimism ahead of a fall season that Audley says will “make or break the year.” Some data indicates that the slowdown in recovery has bottomed out, with the number of production starts in the United States steadily increasing.
A version of this story first appeared in the Oct. 23 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.