This is becoming a trend that we are seeing.
Within the United States, due to the policies of certain areas, we are seeing migration. It is starting a trend of "2".
We already have Wall Street 2 forming in South Florida as many hedge funds and other financial firms have either left New York or at least set up offices there.
Some are calling the Austin area of Texas "Silicon Valley 2" as a number of companies already located their headquarters to that area. Oracle and Tesla are two such companies.
Are we embarking upon a third?
Hollywood 2: The Flight To Vegas
Hollywood has dominated the movie and television industry from the earliest days. This industry was founded out West as film makers sought to get out from under the thumb of Thomas Edison. Since he was located on the east coast, his technology could be used on the other side of the continent without much hassle.
The result was the epicenter for entertainment for more than 100 years. That, however, might be coming to an end.
We covered the downsizing that is occurring. There appears to be another move afoot which could further decimate the Los Angeles area.
A couple of companies, Sony Pictures and Warner Bros, are vying for tax incentives to set up studios in Las Vegas.
Unfortunately for the area, the money is not on par with other states:
Nevada currently offers $10 million a year in film incentives — not much compared to other states. Just in the Southwest, New Mexico awards up to $120 million a year, plus an unlimited credit for its “film partners” — Netflix and NBCUniversal. Arizona approved a $125 million-a-year incentive in 2022.
Nevertheless, both Sony and Warner Bros are making pitches to get the money and set up shop in Vegas. While they assert they simply want to expand their operations outside of California, why would you do that when the industry is contracting.
In other words, this is likely a ruse until things are settled. Whichever studio ends up there, do not be surprised if they end up closing shop in Hollywood.
This is especially true for Warner Bros, which is in a lot of financial trouble.
Decentralization Of The Industry
As we can see, New Mexico and Arizona are vying for the business. This has pushed Nevada to consider its place.
In 2023, Lange proposed increasing the Nevada credit to $190 million a year over 20 years. Mark Wahlberg, a Las Vegas resident, was a prominent supporter, along with Jeremy Renner, who pushed to include funding for film projects in northern Nevada, where he lives. The local construction trades and the Las Vegas branches of IATSE and the Teamsters also pushed for the incentive.
The additional money has not come through up to this point. That said, it is something to keep an eye on going forward.
Basically, California is facing the possible exodus of the entire film industry. There, naturally, are a multitude of reasons for this. One of the biggest simply is the state is no longer friendly to business.
Of course, the carnage spreading throughout the industry is not helping matters either.
At this point, everyone is well aware that Sony Pictures and Warner Bros are in play. Whichever one does not get the tax benefits will probably be approached by other areas. Perhaps it is one of the aforementioned states or one not being discussed.
Technology has changed things completely. No longer is a studio with its line of sets required. Much of the moving making business went technical. now we see as much computing in the movie business as anything else.
This is only going to increase as time passes.
Ultimately, I think these entities are dead in the water. Sony Pictures could be okay since it is help by a parent company. Warner Bros, if I had to guess, will end up swallowed by some tech company that is looking to expand its library.