Movies

Hollywood production budgets were already strained. Fires could make matters worse

BBG News

From a passionate movie enthusiast’s perspective, as the cinematic landscape of Los Angeles springs back to vibrancy, I find myself pondering over an intriguing conundrum facing our industry titans: The potential escalation of production costs due to the destructive wildfires in Southern California.

Approximately thirty movie and TV projects temporarily halted operations following the Palisades and Eaton fires, as per industry calculations.

As a film enthusiast, I found myself temporarily detached from the magic of Tinseltown due to an unexpected intrusion: smoky air. This uninvited guest forced studio executives to pause production for a brief respite, safeguarding both on-set personnel and off-site staff, many of whom had been displaced from their homes. The health and safety of our creative community was the priority here, even if it meant putting the reel world on hold for a while.

Entertainment leaders mentioned that the fires might increase additional expenses, but not enough to significantly alter the decision-making process regarding filming in Los Angeles. However, they warned that studios and producers could encounter escalating costs for materials, permits, and possibly insurance at a challenging period when they’re already grappling with controlling costs to keep production within Los Angeles.

As a movie enthusiast, I’m sharing some insights I picked up recently. We’re discussing the restoration of the Palisades and Altadena, and that involves gathering construction materials – think lumber, drywall, and other essentials we frequently use in set creation within our film industry. Let me tell you, sourcing these materials is going to be quite pricey!

Hollywood Inc.

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Even before the L.A. fires, Hollywood jobs were hard to find. Will the work ever come back?

In the midst of sweeping technological, fiscal, and worldwide transformations shaking up Tinseltown, I find myself grappling with an unsettling truth as a dedicated film enthusiast: The jobs we once cherished in this legendary entertainment hub might not return.

The wildfires are just another blow to an unsteady movie business that’s already faced numerous challenges. The communities surrounding entertainment centers were devastated, coming at a time when the industry was struggling to bounce back from nearly five years of setbacks and layoffs. Many had hoped that the upcoming awards season, with its numerous job opportunities in the industry, would signal a return to normalcy following the pandemic, writers’ strikes, and potential further work stoppages last year. However, even these celebrations have been toned down.

Dayan stated, ‘We’ve had COVID, significant labor disputes due to strikes, and now a disastrous fire. On top of an industry downturn, these events one after another have been extremely challenging.’

According to those who were interviewed, it’s premature to determine the complete effect that the wildfires might have on movie-making activities at this point.

California

News broadcasts detail efforts to control the rapid spread of the Eaton fire, which escalated from a small brush fire covering ten acres into a destructive wildfire encompassing over 14,000 acres and leaving countless homes in ruins.

Over 300 entertainment industry employees faced homelessness, further exacerbating the existing housing crisis in a locale known for its astronomical housing prices. Experts suggested that these fires might encourage some entertainment workers to relocate to more affordably priced states.

According to Kevin Klowden, executive director of Milken Institute Finance, one major benefit of filming in L.A. has always been its population. However, the extra expenses caused by fires pose a significant problem, making it a big concern.

Klowden stated that insurance and housing expenses are both increasing. He wonders if people will still be able to reside in Los Angeles.

The migration of film production was already underway.

Executives have been directing movie and TV show productions towards areas with lower labor costs such as New Mexico and Central Europe. Various states provide attractive tax incentives which attract film producers.

2024 saw a relatively low level of film production activity in Los Angeles compared to previous years, with numbers barely surpassing those recorded during the pandemic-induced shutdowns of 2020. This observation was made by FilmLA, a nonprofit organization tracking the industry’s trends.

As a film enthusiast, I’ve always been concerned about the stability of movie production in Southern California. And let me tell you, this recent event certainly isn’t making things easier for us.

Hollywood Inc.

Multiple filming locations for movies and television series were either completely ruined or severely affected by the Palisades and Eaton fires.

Due to the escalation of the Palisades and Eaton wildfires, there could be a heightened need for state authorities to broaden California’s film tax incentive program. Governor Gavin Newsom has advocated for an enhancement of this program from its current $330 million budget to a proposed $750 million.

The Television Academy emphasized on Friday that it’s crucial to significantly increase our production in the state where most of our members reside, as this is now more important than ever.

California

In their ongoing effort to combat several large wildfires, The Times provides a collection of useful resources for assistance.

Besides increased expenses related to housing for film crew members, the risk of fires may also complicate the process of preparing for film production, including difficulties in procuring necessary materials like wood and even obtaining film permits, according to executives.

As a film enthusiast, I’ve noticed that each corner of LA – from the bustling streets of Los Angeles to the tranquil beaches of Malibu – has its unique set of permitting rules. I’m curious, what extra regulations could potentially come into play?

Concerns have been raised about potential increases in insurance plan premiums, especially for productions situated close to natural areas like Acton and Santa Clarita, as these locations may face higher risks of unpredictable events or losses.

Insurance executives, though, downplayed the likelihood of rate hikes.

According to Gallagher’s Kingman, while these fires do make an impact, it’s not severe enough to cause a significant change within the marketplace.

Hollywood Inc.

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Even before the L.A. fires, Hollywood jobs were hard to find. Will the work ever come back?

In the midst of sweeping technological, fiscal, and global transformations in Hollywood, it’s becoming increasingly clear for both the core entertainment sector and its workforce that positions lost to these changes might not be restored.

As a fan, I’d rephrase it like this: “Post-pandemic, I noticed a significant increase in rates due to the heavy financial losses the entertainment industry-related insurance marketplace endured. This was primarily because of payouts for prolonged shutdowns in Hollywood and Broadway productions, as well as canceled live events.

In a recent development, movie producers have been trying to broaden their insurance policies. However, these expansions might face temporary delays, as it takes time for insurers to assess and account for the losses resulting from all the claims submitted to their different business sectors.

Kingman wondered, “What impact will this have on the whole insurance sector?” He added, “It’s quite intricate.

California

The deadly blazes could affect home insurance policies across the state.

27 individuals have lost their lives due to the fires that ignited on January 7th. The Palisades fire has consumed over 23,000 acres and annihilated at least 6,300 buildings. Similarly, the Eaton fire in Altadena blackened approximately 14,000 acres and demolished more than 9,400 structures, as reported by California Fire.

There are a lot of unknowns for the entertainment industry, Kingman and other experts said.

Without a doubt, Dayan pointed out, it’s those on the lowest steps of the financial ladder who are most at risk for feeling the brunt of the situation.

Dayan expressed that it’s particularly unfortunate since those directly involved in the work – such as catering assistants, production assistants, and various other crafts – bear the brunt of the impact. These individuals have been affected due to the work disruptions and the industry shrinkage.

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2025-01-22 00:01

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