Independent studios scramble to stay afloat as film and TV production lags

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

He recently launched a new $230 million film and TV studio in downtown Los Angeles, near the Arts District and the striking Sixth Street Bridge.

This modern studio boasts five sound stages, along with essential facilities like offices, a workshop, a cafeteria, and on-location support areas.

According to East End Studios managing partner Wainright, representatives from all the major television networks and streaming services recently toured the facility and were very impressed with its quality.

Despite new state and local tax breaks designed to encourage filmmaking, no one has yet committed to a project at East End Studios’ latest location.

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Hackman Capital Partners has failed to repay a $1.1 billion loan for Radford Studio Center, and Goldman Sachs is now leading the effort to acquire the famous studio property.

Wainright said that while people are working hard to revive film and television production in Los Angeles, the situation is currently very serious.

Last week highlighted the difficulties facing owners of local filming studios when Hackman Capital Partners, a major Hollywood property owner, announced it was selling the iconic Radford Studio Center in Studio City to Goldman Sachs.

For years, Southern California saw a boom in new sound stages, driven by increased TV production and low interest rates. However, as filming slowed down to levels not seen in years, it became clear that this growth couldn’t last.

According to FilmLA, a group that monitors filming activity in Los Angeles, sound stages were only about 63% occupied on average in 2024, the latest year for which data is available.

According to FilmLA, the occupancy rate in 2024 dropped to 61%, a significant decrease from 69% the year before. This is also considerably lower than the average rate of 90% between 2016 and 2022.

According to spokesperson Philip Sokoloski, a new report for 2025 isn’t expected to show much change in how full locations are. The group recently announced that film and TV production days decreased by 16% last year compared to 2024.

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Even though California increased funding for its film and TV incentive program last year, it will probably take a while for the projects receiving that funding to noticeably change the numbers.

I remember those incredibly active times in the industry, but Carl Muhlstein, a broker who specializes in selling and leasing studios and big entertainment spaces, pointed out they couldn’t really sustain themselves. It was a bit of a bubble, honestly.

When streaming services first became popular, companies like Netflix, Paramount, and Disney rushed to attract viewers by producing a huge number of original TV shows. By 2022, at the peak of this trend, almost 200 shows were being made at the same time across the industry.

According to Muhlstein, the main goal was to quickly release new content and attract viewers by investing heavily – billions of dollars – in shows and movies. Essentially, everyone was focused on building their streaming services.

Landlords quickly built or purchased studios to handle the surge in filming, but they might have built more than needed.

In 2021, Hackman Capital Partners and Square Mile Capital Management—two major players in the independent studio business—bought Radford Studio Center for $1.85 billion. This historic studio lot, dating back to the early days of filmmaking, is where the city of Studio City got its name.

After problems slowing down production made it impossible to keep up with loan payments, the property owners have defaulted on their $1.1 billion mortgage. Goldman Sachs, the lender, is now likely to take ownership of the land.

As a movie critic, I’ve been following the shifts in the industry closely, and it’s been a rough patch for Hackman, a Culver City company. They’d just acquired Radford Studio Center when everything started to change. First, the pandemic hit and people stopped going to theaters. Then, in 2023, the writers’ and actors’ strikes brought production to a standstill, and studios began tightening their belts. Honestly, the timing couldn’t have been much worse for them.

California saw its market share decline as businesses moved to states and countries with lower expenses and more attractive tax incentives.

Los Angeles boasts world-class film production resources, including top-notch infrastructure, skilled crews, and a wealth of creative talent. However, California hasn’t offered enough tax incentives to compete with other locations, according to Michael Hackman. This lack of support, combined with the challenges of COVID-19, recent strikes, and evolving industry practices, is now causing a significant impact on the industry.

‘We’re going to have fewer studios’

— Real estate broker Carl Muhlstein

According to Hackman, the loss of film and television production to other locations has significantly harmed Los Angeles’ economy, leading to job losses and reduced tax revenue. He believes that with fair policies, Los Angeles can regain its position as the leading hub for the entertainment industry.

According to Kevin Klowden, a Milken Institute fellow specializing in entertainment and technology, Hackman’s mistake was purchasing Radford when demand – and therefore prices – were at their highest. He believes the next owner will carefully reassess the financial viability of the acquisition.

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

He warned that this might be just the beginning of a wave of foreclosures, and that we can expect to see fewer studios available.

He didn’t mention any specific studios struggling, but noted that some are experiencing a slowdown in filming and are now dealing with significantly higher costs when they renew their short-term loans for the properties they own.

According to Muhlstein, content creation is expanding rapidly, happening in more locations around the world with more teams, and at a lower cost. He points out that production is no longer limited to a few key cities, with options now including places like London, Hungary, and Vancouver.

As a film buff, I’m really hopeful that California’s updated tax credit program will finally give local film and TV production the boost it needs. It was revamped last year, and everyone’s crossing their fingers that it means more movies and shows being made here – and, of course, more studios actually using those soundstages!

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Lawmakers not only increased funding for the program that encourages film and television production in the state, but also broadened the types of shows that can qualify. This now includes big competition shows and series with episodes lasting around 20 minutes.

FilmLA anticipates soundstages will be used more often thanks to this improvement, though not quite as much as during the busiest times for television production.

Sokoloski expressed hope that they can create a long-term, supportive environment that offers resources for those who need them and jobs for the team.

Klowden explained that streaming series, with their shorter seasons, don’t allow for the same cost savings and steady production schedules that traditional network TV shows used to have.

Klowden wondered if the recent incentives and the city’s efforts to attract more filming would actually bring productions back. He said that was the key question.

A spokesperson for L.A. Center Studios—the downtown Los Angeles location used for filming shows like “Mad Men” and “The Rookie,” as well as the movie “Top Gun: Maverick”—did not offer a statement.

The owner of Occidental Studios, a small but historically significant film studio in Los Angeles, is hoping to sell. Craig Darian listed the studio – once frequented by silent film legends Mary Pickford and Douglas Fairbanks – for $45 million last year and is looking for a buyer.

Although business is currently slower, the studio isn’t facing immediate financial pressure. They have very little debt, and what they do have is at a favorable interest rate and isn’t due for a while. They are open to finding the right opportunity for the future, but aren’t actively trying to sell the studio.

Occidental is a historic Hollywood studio, one of the oldest still in use today. Early filmmaking pioneers like Cecil B. DeMille, D.W. Griffith, and Mary Pickford all worked there, with Pickford also acting and directing during the studio’s beginnings.

Recently, the three-acre property has served as a filming location for television series like “Tales of the City,” “New Girl,” and the HBO thriller “Sharp Objects.”

Darian expressed sympathy for everyone struggling right now, saying that people are understandably confused and trying to make sense of things. It’s a difficult time for everyone, and no one has all the answers.

Smaller, independent film studios are struggling to find companies to rent their studio space and equipment. This could benefit the larger, more established studios like Warner Bros., Fox, and NBCUniversal, according to industry experts.

According to Muhlstein, major studios will likely increase their dominance in the market as the industry returns to a traditional model: studios will fund projects—films or TV shows—and then handle their distribution.

Even with significant cuts to production, Fox Corporation is still moving ahead with its planned $1.5 billion expansion of its studio lot near Century City, according to sources who aren’t permitted to speak publicly. This large-scale project was announced just two months before the Hollywood production industry slowed down due to the Writers Guild of America strike.

Filming and other work at Rupert Murdoch’s studio is gradually picking up now that Walt Disney has given up its space and moved everything to one location in Burbank.

To capture the feel of the original series, the new “Baywatch” will be filmed primarily on the Fox studio lot and at Venice Beach, according to Fox. The studio lot already hosts many Fox Sports programs, like “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 really believe that 2024 and 2025 will be the toughest years, and after that, things will start getting better for us. I’m hopeful we’ll be able to turn things around and improve our situation.

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2026-01-27 19:02