When California Gov. Gavin Newsom declared last October that he aimed to more than double the annual funding for the state’s Film & TV Tax Credit Program, that lofty goal became a beacon of hope for an industry upended by years of strife as it tried to recalibrate after the streaming boom changed everything.
But while production workers breathed a tentative sigh of relief that help might finally be on its way, union leaders were already putting their heads together to figure out how to actually make it happen.
It was a whirlwind eight months as union leaders, legislators, top filmmakers and rank-and-file workers raced to get this across the July finish line. In addition to $750M annually, the new and improved Program 4.0 also expands eligibility and includes other new provisions aimed at preserving the ultimate goal of the legislation: to create more jobs.
Nearly two months later, we are finally seeing the fruits of that labor. The California Film Commission on Wednesday released the lucky TV projects that are among the first to be approved for the state’s tax incentive since the new program amendments were officially adopted. More than $250M in incentives were doled out across 22 series that are returning, relocating or launching production in the state, including Dan Fogelman’s upcoming NFL drama, which received a whopping $42M — even more than the show had originally been approved for.
Fogelman’s series and Ryan Murphy’s adaptation of Bret Easton Ellis’ The Shards were among the last projects to receive funding from the bottom of last fiscal year’s $330M funding barrel, though Deadline understands that Fogelman decided to reapply so that his series could benefit from the Program 4.0 provisions.
In its Wednesday announcement, the California Film Commission said applications were up as much as 400% from prior rounds.
“The increase in applications sends a clear signal that the enhancements we made to the program are resonating across the industry,” the commission’s executive director Colleen Bell told Deadline, adding that the organization expects the momentum to carry over into the current feature film application window. “Productions that might have automatically gone out of state are now giving California a serious second look, and will, in many cases, make the decision to shoot their projects here in California.”
While Newsom’s funding infusion was certainly a lifeline, Hollywood union leaders knew that they’d need more than just money in the bank to solve California’s production problem. In February, the Entertainment Union Coalition launched its Keep California Rolling one day after state lawmakers introduced a pair of bills meant to “amend, update, and modernize” the incentive program.
Though the EUC had existed in some form for over a decade, this marked a fairly unprecedented collaboration between all of the major unions representing production workers including the American Federation of Musicians, California IATSE Council, Directors Guild of America, LiUNA! Local 724, SAG-AFTRA, Teamsters Local 399, and the Writers Guild of America West.
“I think we really leaned in to the power of speaking to the industry, and all of the individual unions speaking to their members, and then all of us speaking with one voice, in the press, in the legislature, in the public debate about this,” EUC President and Directors Guild of America Western Executive Director Rebecca Rhine told Deadline. “I think that the results speak for themselves.”
Program 4.0 expands the definition of a qualified motion picture to include series with episodes averaging 20 minutes or more, animation films, series, and shorts, and large-scale competition shows.
In addition to the new qualification parameters, Program 4.0 increases the available credit amount for an individual project from 20% to 35% for amounts paid or incurred in Los Angeles, also giving the California Film Commission leeway to allow for additional credit percentages by 5% in other areas of economic opportunity.
The EUC’s seven organizations collectively represent more than 165,000 people who live and work in California’s entertainment industry, from set laborers to costume designers to A-list talent. Despite the size and scope of the coalition, its leaders were determined to set aside the unions’ competing interests to work toward this common goal.
“There’s no doubt about it that we all had to work together to get this done, because it wasn’t ever going to be one union that got it done,” Lindsay Dougherty, Teamsters Motion Picture Division director, acknowledged, adding that this closer knit collaboration between the unions has been developing over the last several years. “It started in 2020 with the COVID return-to-work protocols. Moving forward, we had obviously the writers strike and the actors strike. During those times, we definitely all came together in a more meaningful way than we’ve ever seen, I think, in our history.”
In a perfect world, everyone could have gotten everything they wanted. But, that rarely ever happens even in the best of times. It definitely wasn’t going to happen in a year when California was facing a budget shortfall, forcing legislators to make some tough spending decisions. From the very first committee hearings on AB1138 and SB630, the sister bills that suggested the program reforms, lawmakers questioned why film and television production should be a priority amid concerns about homelessness, healthcare costs, infrastructure needs and more.
But by the time that the coalitions leaders and members stood before lawmakers in Sacramento, they had answers, thanks to some “tough conversations” internally. At the end of the day, everyone agreed that the No. 1 priority would be getting as many people back to work as possible.
“Our guiding principle here is to retain, return, [and] sustain as many jobs as possible. So we looked at every potential change in that context,” Rhine said, explaining that the coalition was fielding proposed changes from the Motion Picture Association, independent producers, legislators, and each member union during this process. “There were a lot of ideas that people had, and it was helpful for us to have a guiding principle to analyze each of them. What did it really mean to make a particular change? What kinds of jobs were we trying to attract and retain? What’s the right balance in the indie versus studio buckets, and what’s the right balance in terms of focusing on Los Angeles, but also acknowledging the rest of the state and the importance of production in the rest of the state?”
Rhine touches on an important point here, which is that the EUC was determined not to position this as a salve only for L.A. but for the entire state. In an impact report released earlier this year, the Entertainment Union Coalition said that from 2015 to 2020, about 50% of the 312 productions that did not qualify for California’s tax credit incentive relocated to another area, resulting in an approximate loss of 28,000 jobs and $7.7 billion in economic activity.
There’s no denying that Los Angeles is the epicenter of California production — and that it has been hit particularly hard by the globalization of the film and television industry. About a month before the EUC launched Keep California Rolling, a local initiative titled Stay in LA began ringing the alarm bells on the massive decline in the city’s active physical production, led by some of the industry’s biggest stars as well as top film and TV writers and producers.
These same organizations are putting pressure on L.A. officials to remedy some of the problems plaguing the city’s production landscape, but they all recognized that they’d need to widen their scope if they planned to appeal to lawmakers who represent a vast array of districts across the state and whose primary interests vary greatly.
That’s why, for example, California’s Program 4.0 still does not include above-the-line costs as qualified expenditures. While there are certainly arguments for the inclusion of above-the-line — the biggest of which is that huge studios like Marvel and Lucasfilm are unlikely to ever return to California if they can’t write off the pay of their talent, writers, directors and producers, among others — they didn’t outweigh the risk of “weakening” the chances at approval by fighting for it, stakeholders said. In other words: Nobody wanted struggling, working class taxpayers to feel like they funded Tom Cruise’s Mission Impossible salary.
After all, above-the-line costs often make up a significant portion of a production’s budget. Even though California now has the second-highest tax incentive in the country after Georgia (which has no cap on its program’s annual spending), there is still a finite amount of money to be handed out each year.
Another category on the chopping block? Commercials. For a program that is primarily focused on job creation, commercials don’t employ enough people for it to make sense to carve out allocations for them, Rhine said, adding, “our feelings about commercials is that needed a different conversation and a different program.”
Both were “simply a matter of having a limited amount of money and a clear goal and trying to align the two,” Rhine said.
Another provision meant to keep money flowing toward as many jobs as possible stipulates a TV series must to return to production with 18 months to guarantee continued funding after which the money will be reallocated. Since, previously, series were approved for funding not only for the current season but for the entirety of a show’s run, it was becoming increasingly difficult for new projects to make the cut as more of the pie was earmarked for returning productions.
Even with a laser focus on jobs creation, Hollywood still faced an uphill battle with getting this ambitious legislation passed in full by July. The reality is that most legislators, even in California, don’t know much about the film and television industry.
Says Brigitta Romanov, a costume designer who is executive director of IATSE Local 892 (the Costume Designers Guild) and secretary of the California IATSE Council: “Our historic industry is really the linchpin of our economy, and people don’t see it that way.”
So, entertainment workers did what they do best: they got creative.
In addition to the dozens (if not hundreds) of production laborers who traveled to Sacramento over the first half of the year to plead their case, others wrote scripts detailing their mission, redesigned beloved movie posters to call attention to how much those films have contributed economically to the state, and even opened the doors to some active sets across California.
“So that the legislators could see what this really does, what this brings to our economy,” Romanov continued. “Even though, every single day something’s closing, we still have a 10 to one [ratio of] businesses that support this industry compared to anywhere in the world.”
Perhaps one of the biggest eye openers for lawmakers was a trip to the set of Fallout, which relocated to California for Season 2. A tour of the Santa Clarita set of the Prime Video series, led by executive producer Jonathan Nolan, gave legislators an intimate idea of just how many jobs a high-powered production like that one can create.
In addition to enticing new productions to consider California, relocation has been another major priority for stakeholders. Prime Video’s Mr. & Mrs. Smith and Ballard are also among the high-profile productions bringing work back to the state thanks to Program 4.0.
At the time of the Fallout set visit, Nolan told Deadline he felt “it gave all those legislators a real sense that this isn’t hype — that there is this incredibly robust, incredibly vital industry that has supported generations of Californians, and we’re the best at it in the world. Letting that slip away would be an incalculably bad decision.”
It seems he was right, given that the ultimate outcome was, in fact, the best case scenario. Not only was Newsom about to get his entire proposed $750M in annual funding approved, but all of the program amendments that the Entertainment Union Coalition fought for were also signed into law not long after via a trailer bill.
The overwhelming response to the first round of Program 4.0 TV applications is a positive sign that things are moving in the right direction. Sources across the industry also tell Deadline that, anecdotally, they’ve noticed an increase in the amount of available gigs as of late, too.
The fight isn’t over, though, as union leaders turn their sights toward the possibility of federal intervention to protect the U.S. film and television industry, which per a 2023 report from the MPA, supports more than 2 million jobs and contributes over $180B in total wages annually, encompassing 122,000 businesses nationwide.
Shortly before his inauguration, President Donald Trump anointed Jon Voight, Sylvester Stallone and Mel Gisbon his ambassadors to Hollywood, tasked with presenting solutions to dwindling production. So far, Voight has been the only one of the three to really engage with this appointment. Deadline understands that union leaders have repeatedly met with the Midnight Cowboy actor to formulate ideas and, in May, Voight presented Trump with plan to “Make Hollywood Great Again.”
Other than briefly floating the idea of tariffs on films and series shot abroad (which went over like a lead balloon in Hollywood), POTUS has not engaged further on the topic thus far. However, the unions seem committed to pushing for change regardless of the political whims of the current administration.
“There’s a lot the states can do, but at the end of the day, we’re competing against countries with significant federal incentive programs,” Rhine said. “This is one of the core — maybe the only — remaining American product that is exported around the world that is highly profitable and successful, and that’s something that this administration has expressed support for…I am hopeful that if we can have a substantive conversation, if we can get people to put aside a partisan lens and just talk about jobs for many, many, many Americans of both parties, that we can agree that this is something worth doing. This is about a quintessential American industry and keeping it in America.”