Hollywood Exodus Shifts Global Film Power

When Pam Elyea opened History for Hire, her North Hollywood prop house, rent consumed about 20% of her income. Today it takes 60%. The difference isn't inflation—it's that her phone stopped ringing. Film productions that once rented Civil War uniforms and vintage typewriters from her warehouse now shoot in Atlanta, London, or Budapest, where their budgets stretch further and tax credits flow more freely.

The Great Production Exodus

Los Angeles lost 17,000 entertainment jobs between 2022 and 2025. Soundstage occupancy dropped from 90% to 63%. The city that invented the modern film industry recorded just 5,048 shoot days in the third quarter of 2024—the weakest quarter on record outside the pandemic. California's share of national film and television employment fell from 35% to 27% in three years.

These numbers tell a story of industrial migration that rivals the Rust Belt's decline. Michael F. Miller Jr., vice president of the International Alliance of Theatrical Stage Employees, put it bluntly: "We are allowing California to become to the entertainment industry what Detroit has become to the auto industry."

The comparison isn't hyperbole. Both industries defined their cities. Both employed hundreds of thousands of workers in specialized, well-paying jobs. Both faced competition from regions offering cheaper labor and better incentives. The difference is that cars can't be emailed across borders, but digital files can. A Marvel movie shot in Georgia looks identical to one shot in Burbank.

The Tax Credit Arms Race

Georgia started this war in earnest, and it's winning. The state offers an uncapped 30% transferable tax credit—meaning productions can sell the credits to other companies if they don't owe enough Georgia taxes to use them. Since 2015, Georgia has spent over $5 billion attracting productions. "Stranger Things," multiple Marvel films, and countless other projects now call Atlanta home.

California responded in July 2025 by more than doubling its Film and Television Tax Credit Program from $330 million to $750 million annually. Governor Gavin Newsom signed the expansion with promises it would stem the bleeding. But the structure reveals the problem: California's program is capped, excludes above-the-line costs like star salaries, and offers a 20-25% credit. Georgia's is uncapped, covers more expenses, and offers 30%. New York just raised its allocation to $800 million, exceeding California's new ceiling.

Vince Gervasi, who runs a Santa Clarita production services company, called California's expanded incentives "a drop in the hat" compared to what Georgia offers. The math supports his pessimism. International hubs like the U.K., Canada, and Australia provide subsidies covering up to 40% of production costs. Lucasfilm relocated "Star Wars" projects including "The Mandalorian" and "Ahsoka" to the U.K. Even "Barbie," directed by California-based Greta Gerwig, filmed in Britain.

The Budapest Problem

Tax credits tell only part of the story. A seven-person set operations team in Budapest costs $59,000 for a 30-day shoot. A single senior-level grip in Los Angeles costs $53,000 for the same period. Camera operators earn significantly more per hour in California than anywhere else in the country.

These wage differentials reflect decades of union organizing that built middle-class careers in film production. But they also create an economic reality where productions can cut costs by 40-60% by shooting elsewhere—even before tax credits enter the calculation. The industry faced what analysts called a "quadruple-whammy": COVID-19, the 2023 writers' and actors' strikes, Southern California wildfires, and this intensifying regional competition.

Scripted series production dropped from 633 in 2022 to 481 in 2023, ending the "Peak TV" era that had masked the migration for years. High-budget scripted projects in the U.S. declined by 35%, with Los Angeles absorbing most of the loss. When the pie shrinks while competitors grow more aggressive, the legacy hub suffers disproportionately.

The Subsidy Skeptics

Not everyone believes tax credits deliver what they promise. Some economists argue film incentives return as little as 15 cents per dollar spent in some states. The productions arrive, spend money, claim credits, and leave. The jobs are temporary. The infrastructure investments often sit empty between projects.

Yet this critique misses something important: the competition isn't between subsidies and no subsidies. It's between your subsidies and everyone else's. California could eliminate its program tomorrow on principled economic grounds, but productions wouldn't return—they'd just have one less reason to consider staying.

The workers bearing the cost of this debate don't have the luxury of theoretical economics. IATSE estimates 18,000 full-time jobs have disappeared in three years. Workers turn to food banks, sell homes, or relocate to Georgia for work. The industry that once defined middle-class creative employment in Southern California now offers feast-or-famine uncertainty.

When Incentives Aren't Enough

California's expanded tax credit might slow the exodus, but it won't reverse it. The infrastructure has already shifted. Atlanta has soundstages, experienced crews, and production services. London has centuries of theatrical tradition and modern studio facilities. Budapest has cost advantages no subsidy can overcome.

Texas increased its biennial tax credits to $300 million and landed "Yellowstone." The show could have filmed in California—it's set in Montana, so location doesn't matter much. But the economics pointed elsewhere, and the economics won.