Tag: studio city

Shep Wainright sure would like to rent you a fancy new soundstage.

Last week, he opened a $230-million movie and television studio on the edge of the Arts District in downtown Los Angeles nestled alongside the dramatic new Sixth Street Bridge.

The state-of-the-art complex has five sound stages, offices and other proper movie studio features such as a mill, commissary and base camp.

“We just had all the major networks, all the major streaming platforms walk through this facility and they can’t believe how nice it is,” said Wainright, managing partner of East End Studios.

But so far, no one has signed up to make a project at East End Studios’ newest property, even as state and local leaders tout new tax incentives to boost the film industry.

“Everyone is doing their best to try to bring productions back to Los Angeles,” said Wainright, “but it’s pretty dire.”

The challenges facing owners of local sound stages came into sharp relief last week when one of the largest landlords in Hollywood — Hackman Capital Partners — said it was turning over the historic Radford Studio Center in Studio City to Goldman Sachs.

After years of aggressive sound stage development across Southern California — fueled by a surge in TV production and low interest rates — the writing was on the wall as filming activity dropped to historic lows.

The average annual sound stage occupancy rate dropped to 63% in 2024, the most recent year data are available, according to FilmLA, a nonprofit that tracks filming in the L.A. area.

The 2024 rate is down from 69% the prior year and is well below the average occupancy rate of 90% seen between 2016 and 2022, according to FilmLA data.

An upcoming report for 2025 is expected to reveal little change in occupancy levels, said spokesman Philip Sokoloski. The group recently reported a16% drop in film and TV shoot days last year compared with 2024.

Those busy days were heady, but they weren’t built to last, said real estate broker Carl Muhlstein, who helps arrange sales and leases of studios and other large entertainment facilities.

The dawn of the streaming era set off a scramble to grab market share among newcomers like Netflix and old-timers like Paramount and Disney, who created hundreds of original scripted televisions shows. By 2022, during the height of so-called peak TV, nearly 200 shows were in production industry-wide.

“It was all about speeding to market and capturing eyeballs by throwing billions of dollars” at creating new shows and movies, Muhlstein said. “They were all building platforms.”

Landlords raced to build or buy sound stages to accommodate all the production, and they may have overshot the mark.

In 2021, independent studio giant Hackman Capital Partners and Square Mile Capital Management paid $1.85 billion for Radford Studio Center, a popular lot dating to silent film days that gave Studio City its name.

Now the owners have defaulted on their $1.1-billion mortgage after production slowdowns made servicing its debt unsustainable and lender Goldman Sachs is expected to take control of the lot.

For Culver City-based Hackman, the timing couldn’t have been worse. Shortly after it bought Radford Studio Center, the industry began to see theatrical slowdowns from the pandemic, the 2023 dual writers’ and actors’ strikes and the cutback in spending at the studios.

California also lost market share to rivals as producers continued to migrate to other states and countries offering lower costs — and bigger tax breaks.

“Los Angeles has the best infrastructure, the best crews, and the deepest creative talent in the world for film production, but California has failed to keep the industry competitive with tax credits offered by other states and countries,” Chief Executive Michael Hackman said in a statement. “We are now witnessing the cumulative impact of years of policy neglect compounded by the effects of COVID, strikes, and changes in industry trends.

“The flight of production from Los Angeles has caused extraordinary economic damage, job losses and declines in our tax base,” Hackman said. “If policymakers level the playing field, Los Angeles can recover and remain at the center of the entertainment industry where it belongs.”

The problem for Hackman was that it bought Radford during “peak demand,” said Kevin Klowden, a Milken Institute fellow, focused on entertainment and technology. “Expect that whoever buys it is clearly going to look at the economics of it differently.”

Other studios face similar challenges to Radford’s, Muhlstein said.

“Unfortunately, this could be the first of several foreclosures,” he said. “We’re going to have fewer studios.”

He didn’t identify other studios in distress, but said some have less filming business than Radford does and are facing more painful cost increases when refinancing short-term loans they took out to buy the properties.

“More content is being produced in more places at lower costs by increasingly widespread teams,” Muhlstein said. “You can go to London, you can go to Hungary, you can go to Vancouver. “

There is hope in the industry that local production — and with it, soundstage usage — will get a boost from California’s revamped film and TV tax credit program, which was overhauled last year.

In addition to boosting the annual amount allocated to the production incentive program, state lawmakers expanded eligibility criteria to include new kinds of shows, including large-scale competition shows and 20-minute-per-episode shows.

With that boost, FilmLA expects to see an increase to the current soundstage usage, but below the 90% occupancy of the peak TV period.

“Our hope is that we can reach that sustainable place with a space for anyone who needs it as well as work opportunities for the crew here,” Sokoloski said.

But the dynamics of streaming series, with shorter episode orders, doesn’t create the same economies of scale and consistent occupancy rates that network shows once did, Klowden said.

“Under the new incentives and with the city actively trying to court productions back and make things easier, will things move back?” Klowden said. “That’s the real issue.”

A representative of L.A. Center Studios in downtown L.A., where “Mad Men,” “The Rookie,” “Top Gun: Maverick” and many other movies and TV shows were filmed, declined to comment.

The head of tiny but historic Occidental Studios is looking to bail out — for the right price. Craig Darian put the Los Angeles studio that was once used by silent film stars Mary Pickford and Douglas Fairbanks on the market for $45 million last year.

“Business has slowed but what little debt the studio has is at a low rate and not coming due any time soon, he said. “We’re looking for the correct exit. We’re not eager to sell.”

Occidental is among the oldest continually operating studios in Hollywood, used by pioneering filmmakers Cecil B. DeMille, D.W. Griffith and Pickford, who worked there as an actor and filmmaker in its early years.

More recently the three-acre lot has been used for television production for shows including “Tales of the City,” “New Girl” and HBO’s thriller “Sharp Objects.”

“We mourn what everybody’s going through,” Darian said. “We’re in the land of ‘I don’t know.’ I think that’s a truism for everyone trying to figure things out.”

With independent studios facing challenges finding tenants to rent their sound stages and services, old-line studio titans such as Warner Bros., Fox and NBCUniversal may gain an edge, analysts said.

“The large corporate studios are going to gain market share because we’re going to go back to the old system,” Muhlstein said, “where they finance your film or television show and then distribute it.”

Despite the dramatic pullback in production, Fox Corp. continues to inch forward with its massive $1.5-billion expansion on the Fox lot, which is adjacent to Century City, according to people familiar with the matter but not authorized to comment. The long-term project was unveiled two months before the L.A. production economy collapsed when the Writers Guild of America went on strike.

Production on Rupert Murdoch’s lot has slowly been increasing after Walt Disney Co. relinquished its space to consolidate operations in Burbank.

The reboot of the iconic television show “Baywatch” will largely film on the lot as well as Venice Beach, to stay true to the original, Fox said. The lot is home to a major chunk of Fox Sports productions, including “Fox NFL Sunday,” and “Fox NFL Kickoff.”

The lot also hosts in-studio production across all of Fox Sports for linear and digital channels.

Some are optimistic the state’s expanded film tax credits will stimulate more local film activity.

Wainright says the incentives are starting to produce some “green shoots” for the industry.

“I would like to think that 2024 and 2025 are kind of the bottom and that we’re going to be pulling ourselves up.”

Times staff writer Meg James contributed to this report.