Full Breakdown
Independent Studios Face Challenges Amid Production Slowdown
1/27/2026, 8:43:39 PM
Current State of Film Production in Los Angeles
The film and television production landscape in Los Angeles is experiencing significant challenges, marked by a notable decline in activity. The average annual sound stage occupancy rate fell to 63% in 2024, down from 69% in 2023 and well below the 90% average seen between 2016 and 2022, according to FilmLA, a nonprofit tracking filming in the area. This downturn has led to financial distress among major studio landlords, including Hackman Capital Partners, which recently defaulted on a $1.1 billion mortgage for the historic Radford Studio Center. Goldman Sachs is expected to take control of the property as a result.
Historical Context and Industry Dynamics
The surge in production during the streaming era, particularly between 2020 and 2022, led to aggressive expansion among studios, with nearly 200 shows in production at the peak. However, this growth was unsustainable, as the industry faced a downturn due to the COVID-19 pandemic, dual writers' and actors' strikes in 2023, and increased competition from states and countries offering lower production costs and better tax incentives. Chief Executive Michael Hackman noted that California's failure to maintain competitive tax credits has contributed to the exodus of production from Los Angeles, resulting in economic damage and job losses.
Economic Implications and Future Outlook
Real estate broker Carl Muhlstein indicated that the current situation could lead to further foreclosures among studios, as many face similar challenges to those experienced by Radford. The dynamics of streaming, characterized by shorter episode orders, do not support the same occupancy rates as traditional network shows. Despite these challenges, there is cautious optimism regarding California's revamped film and TV tax credit program, which aims to stimulate local production. Philip Sokoloski from FilmLA expressed hope that these incentives could lead to increased soundstage usage, although it may not reach previous peak levels.
Criticism and Opposition
Critics argue that the current state of the industry reflects years of policy neglect. Kevin Klowden from the Milken Institute emphasized that the economic realities of studio ownership are changing, suggesting that future buyers will approach investments with a different perspective. The sentiment among industry insiders is that the large corporate studios, such as Warner Bros., Fox, and NBCUniversal, may gain market share as independent studios struggle to find tenants.
Verbatim Quotes
- “Everyone is doing their best to try to bring productions back to Los Angeles,” — Shep Wainright, Managing Partner, East End Studios
- “The flight of production from Los Angeles has caused extraordinary economic damage, job losses and declines in our tax base,” — Michael Hackman, Chief Executive, Hackman Capital Partners
- “If policymakers level the playing field, Los Angeles can recover and remain at the center of the entertainment industry where it belongs.” — Michael Hackman, Chief Executive, Hackman Capital Partners
- “We’re going to have fewer studios.” — Carl Muhlstein, Real Estate Broker
Conclusion
As the industry navigates these turbulent times, there is a glimmer of hope that the expanded tax credits may foster a resurgence in local production. Wainright expressed optimism that 2024 and 2025 could mark a turning point for the industry, suggesting that the worst may be behind them.
