The production exodus we’re experiencing from California is not a mystery.

It is a rational, predictable response to a policy environment that has consistently underdelivered.

That’s what I can tell you, as someone who manages studio assets across five countries, operating at the intersection of real estate, production infrastructure and global media markets.

Productions don’t leave California because they want to. They leave because the math tells them to.

Simply put: The economics of content have changed. During the peak of the streaming wars, the major platforms were in a race to generate as much content as possible. Volume was the strategy, while return on investment was almost secondary.

But that era is over. The consolidation of the streaming industry has produced a much more disciplined, ROI-focused approach to content spending. Every dollar of a production budget is now under the microscope in ways it simply wasn’t three or four years ago.

In that environment, tax incentive programs become decisive, not because they’re a nice-to-have, but because on a $50 million television production, only a robust tax credit program can return 30%, 40% or even 50% of qualifying production costs. That changes the math entirely. And when the math changes, productions move.

The UK, Ireland and Canada figured this out years ago. Their tax credit programs are generous, well-structured — and perhaps most importantly in the current climate — stable. They haven’t changed structurally in about five years, and that stability is not a minor detail. 

We recently signed a four-year deal with a production group in Ireland filming a live-audience game show. They fly all of their contestants from the US to Ireland for the production, put them up in hotels, cover all the logistics of moving a production across the Atlantic and bring everyone home when it’s done.

The total cost of doing all of that — the flights, the hotels, the Irish crew, the facilities — is still less than what it would cost to produce the same show at home in California. When transporting as many as 100 people, and potentially more, across the world is the more economically rational decision, we must take a hard look at what led us here.

This is not an isolated example. Our studio facility in Vancouver is at 100% occupancy. Our facilities in the UK and Ireland are fielding a strong demand. These are all signals that a robust, stable tax credit program is the determining factor. When a studio or streamer is planning a production two years out, it needs to know what the economics will look like when cameras roll. A tax credit program that might be amended, restructured or defunded by the time production begins is not a program you can build a budget around. Certainty has become more important than ever. And right now, Europe and Canada are selling certainty while California is not.

In 2025, California expanded its film and television tax credit program, and the headline numbers looked promising. A 30% credit sounds competitive. But when you get into the details, the program is extraordinarily difficult to qualify for. There are rolling submission dates, significant exclusions on what costs the credit can be applied to and one of the most consequential exclusions involves above-the-line talent.

In practical terms, this means that if a major star represents 20% to 50% of a production’s total budget — which is not uncommon — that entire portion of the budget is ineligible for the credit. The headline number and the effective number are very different things.

The reluctance to allow above-the-line talent costs to qualify for the credit is, at its core, a political calculation. Subsidizing a movie star’s salary is a bad headline for a California politician.

But the consequence of that political calculation is that the state’s tax credit program is structurally less competitive than it needs to be — and productions are making rational decisions to go elsewhere as a result. The optics of subsidizing a star’s salary are uncomfortable. The optics of an empty soundstage should be, too, because that reality — productions abandoning Hollywood completely — would be even worse.  

The studio business can return to Los Angeles. The talent and production companies are here, the infrastructure is here, the will of the industry to stay, when the economics allow it, is also here.

What’s missing is a policy in California that works: a tax credit program that is generous enough to be competitive, simple enough to be usable and stable enough to be bankable. Productions will come back when California makes it rational to do so. The question is whether the state will act before the window closes.

Alastair Boucaut is executive vice president of Asset Management at Hackman Capital Partners, one of the world’s largest independent owners and operators of film and television studio assets.

The statements in this article represent the opinions of the author and not those of Hackman Capital Partners, LLC.