A Hollywood Exit: What California Must Do to Remain Competitive in Entertainment - and Keep Jobs
Feb 26, 2014
Publisher: Milken Institute

California's stronghold on the entertainment industry is loosening as production jobs are lured to other locations due to production credits and other tax breaks. Between 2004 and 2012, the state lost more than 16,000 jobs in filmed production employment -- a more than 10 percent drop. Meanwhile, New York, California's main rival, added more than 10,000 such jobs. These jobs contribute to state revenues and provide sustainable incomes that result in significant local spending. In California, they are high-paying middle-class positions that pay more than $95,000 on average.

This report determines what can be done to make California more competitive. It examines the incentives of New York and other states as well as Canada and other countries. One conclusion: the areas not covered under California's current incentive program, namely, big-budget movies, hour-long network dramas and visual effects, have been the fastest to flee the state.

The report's authors make recommendations for improving California's incentive program, based on what's working elsewhere. Suggestions include raising the total amount of funds available to a level that allows for eliminating the current lottery system. The state should also award credits on a rolling basis throughout the year, instead of only at one point tied to the state's fiscal calendar.

The report suggests ways for California to leverage its strategic advantages, namely serving as the headquarters of most studios, distributors and producers, its role as home to the largest concentration of entertainment talent in North America, and its strong existing infrastructure.

Download a copy to see several additional suggested improvements to the incentive program, including ways to ensuring a smooth evaluation process and capture more hour-long TV dramas, which create the most jobs.