DGA's 32% U.S. production drop forces Hollywood unions demand tax credit

# Hollywood Unions Sound the Alarm as U.S. Production Slips 32% Over 25 Years The first hint of trouble came in the form of a stark data set: the share of spending by the biggest U.S. studios on films shot domestically has dropped from 74% in 1999 to just 42% in 2024.

Television, too, has seen a comparable slide, falling from 94% to 64%. Those numbers are not idle statistics; they trace a 25‑year trend that has left American crews and communities feeling the tremor of a once‑steady industry.

Behind the figures lies a pattern of migration. Marvel and Lucasfilm, once the titans of on‑screen storytelling, have moved their blockbusters to overseas facilities, a decision echoed by Paramount, Warner Bros., and NBCUniversal.

Their recent tentpoles—Barbie, Wicked, and Sonic the Hedgehog—were shot almost entirely abroad, leaving domestic talent pools with fewer high‑budget gigs. The shift has not been limited to marquee titles.

The decline in the number of films and episodes shot in the U.S.—from 66% to 54% for movies, and from 96% to 70% for television—underscores a broader retreat of major studio projects from American soil. The consequences ripple through every rung of the production ladder.

Cast and crew numbers who work on domestic projects have fallen from 72% to 43% in film and from 86% to 58% in television.

This contraction signals a shrinking pipeline for mid‑level workers, freelancers, and union members who rely on steady projects to sustain their livelihoods. ## Background & Context The 2024 report, commissioned by a coalition of unions—including the Directors Guild of America, the International Alliance of Theatrical Stage Employees, the Screen Actors Guild‑American Federation of Television and Radio Artists, and the Writers Guilds—examined scripted, live‑action productions from studios with budgets of at least $5 million for features and $1 million for standard TV episodes.

By isolating these high‑investment projects, the analysis captured the heart of the industry’s economic engine. The historical decline in domestic spending is intertwined with global production dynamics.

In the early 2000s, the of tax incentives abroad—particularly in Canada, New Zealand, and various European nations—grew steadily. Coupled with a tightening of U.S. labor costs and a competitive push for lower production expenses, studios began to re‑evaluate where to shoot.

The migration accelerated during the COVID‑19 pandemic, when international travel restrictions and domestic lockdowns forced many productions to relocate entirely. Simultaneously, technological advances have enabled remote collaboration, reducing the necessity for on‑site crews.

Virtual set design, cloud‑based post‑production, and even remote filming of certain sequences have become more commonplace.

While these innovations promise efficiency, they also diminish the number of local jobs and the economic multiplier effects that on‑screen production brings to regional economies. ## What People Are Saying Union leaders responded to the findings with a mixture of caution and urgency.

In a statement released on Monday, representatives from the DGA, IATSE, SAG‑AFTRA, and the WGA emphasized that “unless action is taken, America will continue to lose ground in retaining this industry and the middle‑class jobs it provides.” The tone was not merely observational; it carried the weight of collective bargaining power and a call to legislative intervention.

The report’s findings dovetail with a separate analysis by the Motion Picture Association, which warned of significant job and spending losses if the federal government did not enact a comprehensive tax incentive.

That study projected that a 20% federal tax credit—stackable with state benefits—could generate $250 billion in gross economic value and sustain an average of 143,500 new jobs nationwide.

The potential for a “tax credit stacking” mechanism offers a path to re‑balance the cost equation, yet it hinges on policy decisions that remain uncertain. Industry voices outside the unions have offered varied perspectives.

Some studio executives acknowledge the financial logic of overseas production but point to logistical challenges, talent shortages, and the creative control benefits of shooting on location.

Others note that domestic production costs have spiked due to labor shortages, increased insurance premiums, and the rising price of building temporary sets. Still, the broader consensus remains that a sustainable, U.S.-centric production ecosystem requires a recalibration of incentives and infrastructure.

Public reaction has been mixed. Communities that host large productions—particularly in states like New York, California, and Texas—have reported a noticeable drop in revenue from hospitality, catering, and transportation sectors.

Meanwhile, advocates for the film and television industry argue that the sector’s global reach can still serve American jobs if the policy framework aligns incentives with domestic growth.

The debate underscores the delicate balance between maintaining the creative freedom that attracts blockbuster productions and protecting the economic health of local communities. ## What Happens Next The immediate next step involves a legislative push to revive the federal tax credit.

Lawmakers across the political spectrum have expressed interest, but bipartisan support remains fragile. The debate centers on the size of the credit, the conditions attached, and the overall budget impact.

If the credit reaches the 20% threshold projected by the MPA, it could unlock a new wave of projects willing to return to U.S. soil. However, opponents caution that a generous credit may be a short‑term fix that does not address underlying cost pressures, such as labor scarcity and the need for upgraded infrastructure.

Union representatives are also advocating for state‑level reforms. Some states have already rolled out competitive incentives, yet the federal framework is essential to ensure a consistent playing field and to prevent a “race to the bottom” where only a few states can offer the most attractive deals.

The DGA, IATSE, and other unions have begun negotiations with federal agencies to secure policy language that protects workers and preserves the integrity of U.S. production. Beyond policy, the industry is looking at new ways to make domestic production more viable.

This includes investing in regional film studios, expanding training programs to address skill gaps, and fostering partnerships between public entities and private enterprises.

For example, some cities are exploring “production hubs” that bundle tax incentives, infrastructure upgrades, and streamlined permitting processes. These initiatives aim to reduce the overhead that currently pushes studios overseas.

In parallel, technology is being leveraged to mitigate the financial burden of on‑site shoots. Remote collaboration tools and virtual production environments can reduce the need for large physical crews, thereby cutting costs while maintaining creative quality.

While these solutions cannot fully replace the economic benefits of in‑person work, they represent a hybrid model that could keep more projects anchored in the U.S. without sacrificing profitability. The coming months will likely see intense negotiations, policy drafts, and perhaps a landmark bill.

The outcome will shape not only the trajectory of Hollywood but also the livelihoods of tens of thousands of workers, the economic health of cities that depend on film spending, and the cultural narrative that America continues to produce and share with the world.

The story of U.S. film and television production is at a crossroads. The numbers are clear, the stakes high, and the path forward will require coordinated action from unions, studios, lawmakers, and local governments.

The next chapter will determine whether the industry can reclaim its domestic foothold or continue to drift toward distant shores.