While Hollywood still holds viewers’ imaginations as both the birthplace and capital of the modern television and film industry, it is no longer the center of our entertainment production business. Despite our enviable collection of studio facilities, diverse physical landscape and resources, highly trained production crews, and proximity to the actual business of television, Hollywood has been losing production jobs for a decade, at least, as our state fails to compete with tax-incentives and the relatively lower cost of production services offered by other territories.
There was a hopeful moment last month when Governor Gavin Newsom proposed doubling the state’s film and television tax incentive program to $750 million annually. To the Governor’s credit, he is marshaling many of the most compelling economic arguments for film and television tax credits centered around jobs, GDP multiplier effects, and tax revenue. All these benefits are compelling and true, but his approach is neither competitive nor comprehensive enough.
According to FilmLA’s most recent Q3 2024 report, unscripted production has been declining in LA – by 56.3 percent in the last quarter alone. In fact, the summer drop in reality production was so steep that it more than accounts for the entire loss seen in aggregate across all filming categories over the past year. This should give all Californians pause, as it has very real consequences for our local economy and the livelihood of local industry workers.
The Governor’s current plan falls short of the bold vision needed to restore California’s position as a global entertainment hub – especially when it comes to unscripted television, which is not only an area where I am especially well-versed but also a genre where the speed and long-term repeatability and expansion of franchises can pay immense dividends to local economies.
Unscripted shows and formats are an important part of our industry, and a core part of every television distributor’s programming mix. Recent Statista data shows that at least one-quarter of all network and streaming productions are unscripted. For many networks and streamers, especially the traditional broadcasters, unscripted content accounts for closer to half of their production slate. Moreover, the overwhelming majority of shows in the burgeoning connected TV market (FAST channels) are unscripted, and only growing.
And yet somehow, the Governor’s plan continues to ignore unscripted television as an allocation center, saving the tax incentives for our scripted television and feature siblings. This exclusion of our genre from the California tax incentive program is not new, but a clear miss. With the tightening of production budgets and growth of the industry, new jurisdictions have lured producers with their cost-saving incentives.
While historically these moves came with real hiccups — initially local production crews did not exist to support the demand for human talent — over years public-private partnerships and on-the-job training addressed that gap between supply and demand. Today, unscripted shows are being shot successfully outside of California, with producers leaning on local talent, production facilities, and tax-incentives season after season.
As a convenient sample, the past few years Banijay Americas’ companies have shot in Georgia, Connecticut, the UK, Australia, Panama, and Canada. We are especially fortunate because Banijay Entertainment’s global footprint allows nearly seamless moves and best-in-class production partners across the world.
And yet, I’d like nothing more than to see California bring back productions with aggressive action. In order to do that, our state must become more competitive in for today’s producers by incorporating a number of key elements to the California Film and Television Tax Credit Program:
— Add Non-Scripted Productions as an Allocation Category
— Remove the Cap on the annual budget for incentives
— Raise Credit Percentage for TV Production to at least 30 percent, or higher
— Allow Tax Credits to be Refundable
In my view, this is not just about stemming production losses, but repositioning California as a premier location for the entertainment industry. For those of us who have made our way in this industry, Hollywood is not just a location – it is dream. Before we tracked profit margins, we dreamed of telling stories that moved audiences. To keep that magic alive and keep our talented crews working, California must create an economic environment that supports our most treasured and lucrative industry.
Ben Samek serves as the CEO of Banijay Americas, one of the largest divisions of the global entertainment powerhouse Banijay. Under Samek’s leadership, the division produces over 1,700 hours of original content annually, including top-rated programs like MasterChef, The Summit, LEGO Masters, Below Deck Franchise, Como Agua Para Chocolate, The Challenge, Love is Blind Brasil, and La Casa de los Famosos.
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