Key Takeaways

  • Production days in Los Angeles collapsed by more than half since 2016 as networks chased state and international subsidies.
  • Tax credits dictate geography overnight: the crew of Eastbound & Down packed up and fled North Carolina for South Carolina the moment the local governor ended the state tax break.
  • Major networks now fly hosts like Rob Lowe and American contestants across the Atlantic to tape game shows and studio comedies in Dublin, Ireland.
  • Soundstages financed during the 2019 streaming boom, like the massive development at Santa Monica Boulevard and the 101 freeway, opened just as studio demand cratered.

Subsidies Create Migrant Industries

For a century, Southern California held an unbeatable geographic advantage in entertainment. The infrastructure was fixed, the crews lived down the street, and the talent was local. That geographic lock is gone. As TV writer Hayes Davenport explained to Joe Weisenthal and Tracy Alloway, entertainment production has turned into a pure regulatory arbitrage game.

“It's been a bit of a race to the bottom across the country,” Davenport said. When local governments offer double-digit percentage rebates on production costs, studios move instantly. Loyalty to local crews or historic lots does not factor into the spreadsheet.

Davenport experienced this shift directly while working on television sets in the American South. “You mentioned Eastbound & Down, we were in North Carolina until they got rid of their tax break there. The governor sort of single-handedly ended it, and then we just ran across the border to South Carolina for their next show.” When capital follows transient tax policy, entire workforces become migratory overnight.

Dublin Game Shows and Empty Los Angeles Stages

The geographic flight no longer stops at regional border crossings. It now crosses oceans for productions that historically required nothing more than an empty room and a studio audience.

“And what is kind of most surprising to me, game shows,” Davenport noted. “If you see a Fox game show, or a Fox studio comedy, a single-cam or a multicam comedy, you're in Dublin. You are watching a show that is filmed in Dublin. So they're flying out Rob Lowe and an American game show contestant cast to that. You used to go to Universal Studios and get to just be part of the game show.”

When asked what makes an Irish soundstage cheaper than a California lot, even after paying for transatlantic flights and hotel rooms for an entire cast, Davenport kept the answer simple: “It's a tax and labor thing.”

This dynamic leaves local physical assets stranded. During the peak of the streaming expansion, developers poured hundreds of millions of dollars into commercial real estate to house soundstages that entertainment companies promised they would need for decades.

“Right down the street from here, there's a giant complex right on Santa Monica and the 101 that you saw starting to get built around 2019 or so,” Davenport said. “That's when it got financed. There was a gigantic hole in the ground for a really long time. And now it is done, and the demand is not exactly what it was.”

What to Do With This

Audit your company's physical overhead against jurisdiction risk. If your primary cost center relies on remaining in a single high-cost metro, identify the specific state, national, or regional subsidies that competitors use to undercut your operating margins. Calculate the exact unit economics required to shift your operations or contract work to a subsidized region before forced margin pressure decides the timeline for you.