Post by Randall Heer

California’s film and television production environment remains turbulent. Shifting production levels and contraction in the production support ecosystem —labor, real estate, and technical services — are spurring a political push to expand—or uncap—state tax incentives. It’s overdue. Hackman Capital Partners, one of Hollywood’s most powerful independent studio landlords, is facing significant distress. The company defaulted on $1.1 billion in financing tied to the historic Radford Studio Center, with revenue covering only about 21% of debt service as production volumes declined. Hackman has forfeited the property, marking a dramatic reversal for a firm that once planned a $1 billion expansion of the lot. Hudson Pacific Properties, another major studio real estate player, is recalibrating as well. After years of aggressive expansion into soundstages, the company is cutting costs, considering asset sales, and repositioning its studio division amid what Hudson CEO Victor Coleman calls a “reset year” for production. The slowdown in filming has caused debt pressures, pushing Hudson to shed its inventory of production stages acquired in the Quixote purchase. These real estate struggles reflect production declines. California has experienced a sharp downturn in film and TV output since 2022, leading to underused studio space and massive job losses. Postproduction has been hit particularly hard, with more than 4,400 jobs lost over the past 15 years and significant work migrating to states and countries offering more competitive incentives. In response, lawmakers are advancing a newly appropriated standalone postproduction tax credit. Assembly Bill 2319 would allow credits of up to $6 million for qualified postproduction expenditures — including editing, scoring, VFX, and sound mixing — even for projects shot outside California. The bill, currently advancing through the state senate, would make the state more competitive in retaining the second half of the production pipeline, offering credits between 35% and 50% for qualifying work. This policy momentum is mirrored on the campaign trail. Across party lines, California’s gubernatorial candidates are calling for expanded or uncapped film and television tax incentives. Republican Steve Hilton supports eliminating the $750 million cap and raising credit percentages to as high as 60%. Democratic contenders Xavier Becerra and Tom Steyer stop short of endorsing full uncapping, but support expanding the program’s scale and reach. California must confront declining production levels and mounting competition from other jurisdictions head-on. Stabilizing the entertainment economy hinges on how swiftly — and boldly — the state adapts its incentive framework to the new realities of global production. I’ll continue to follow the story. Share your insights and help amplify this story—comment, react, and repost to drive discussion. Thank you.