President Donald Trump has called on Congress to create a federal tax incentive for film and television productions. This could provide a significant boost for Hollywood and other beleaguered studio and soundstage markets across the USA. Trump announced that he would arrange meetings with bipartisan leaders to advance the legislation. Although he did not elaborate on the precise size or structure, a proposal supported by industry leaders suggests a 20 percent credit on the labour costs of US production.
Although 39 states offer production incentives, the USA has no nationwide programme comparable to the incentives in competing countries. President Trump argued that film production has migrated to Canada and other countries, writing: “Congress should immediately approve a federal production incentive to create entertainment jobs in America.”
This push comes amidst a deepening crisis for production space and the entertainment industry that defines Los Angeles and drives its economy. Filming days in L.A. County dropped by 42 percent between their peak in 2022 and 2024. For Southern California, production last year was estimated to be 50 to 70 percent below its peak. At that time, approximately half of L.A.'s film and television studios were reportedly vacant.
The deteriorating conditions quickly led to significant problems for studio landlords. Hackman Capital Partners defaulted on EUR 1.1 billion in financing for the 1.2 million square foot Radford Studio Center, after which Goldman Sachs took control. Hackman and Affinius Capital had acquired the property in 2021 for EUR 1.85 billion and planned a EUR 1 billion expansion. The well-known Television City studio complex, where Hackman planned a redevelopment worth around EUR 1 billion, has also run into trouble. Lenders claim the landlord owes more than EUR 357 million for the 25-acre estate. Hudson Pacific Properties is also struggling with the decline in production and faces a EUR 1.1 billion Hollywood studio loan maturity, while its key tenant Netflix pursues Hackman's Radford Studio Center.
Local production continues to struggle into 2026. FilmLA reported 4,711 on-location filming days in the second quarter, a 12.7 percent decrease year-on-year, while television production fell by 27.7 percent. California has already dramatically stepped up its response by doubling its annual film and television tax credit programme to EUR 750 million and offering credits of up to 35 percent of qualified expenditures. The expanded programme generated EUR 6.6 billion in direct production spending in its first full year, according to the California Film Commission, supporting nearly 35,000 jobs for performers and crew.
State lawmakers also passed a resolution this week after a new annual cap of EUR 5 million on corporate tax credits threatened to undermine the programme. The legislation would allow studios to cash out credits within two years instead of five, exempt independent films from the cap, and extend older credits. Nevertheless, industry representatives argue that state incentives alone cannot compete with foreign programmes. Last year, 45 percent of US films and scripts were shot internationally, up from about a third in 2022.
