A new union-commissioned study from Ernst & Young shows production spending within the US has nearly halved since the late 1990s, adding fuel to a fresh push for a federal tax incentive.
The number that's got Hollywood's unions worried: 72%. That's how much of major studios' production budgets stayed inside the United States at the end of the 1990s. Today, per a new study, it's dropped below half.
The survey, conducted by Ernst & Young and commissioned jointly by the Writers Guild of America, SAG-AFTRA, the Directors Guild of America, LiUNA, IATSE and the International Brotherhood of Teamsters, tracked film and TV spending from major American studios between 1999 and 2024. It only counted movies budgeted at $5 million or more and TV shows spending at least $1 million per episode, so this isn't about indie shorts drifting to Canada for tax breaks. This is the big stuff, leaving home.
The timing isn't an accident. A bipartisan bill introduced in Congress last month would create a federal film tax incentive, something studios, producers and unions have all been lobbying for in near-unison, which doesn't happen often. The pitch is a 20% base rate on cast and crew spending for any US-based production, with room to climb to 30% once you stack uplifts: independent productions get one, studios that bring a meaningful chunk of their slate back to the US get another, and productions shooting in federally designated disaster zones get a third. Los Angeles currently qualifies for that last one, a direct line back to the 2025 wildfires.
Unions putting their weight behind a joint study is itself a signal. WGA, SAG-AFTRA, the DGA, the Teamsters and IATSE don't always agree on much, but runaway production has become the rare issue where every guild in town is pointing at the same chart.
This EY number lands a month after the Motion Picture Association put out its own projection, estimating that if the federal incentive clears Congress by the end of the year, annual US production spending could double by 2035. That's the carrot studios and unions are both holding up, a decade-long bet that the right tax structure brings the work home faster than it left.
Whether Congress actually passes anything before year-end is the open question. The bill is still just a bill, bipartisan backing or not, and federal tax incentives have a way of getting stuck behind bigger legislative traffic. For now, the gap between 72% and just over half is the plainest evidence yet that crews in Georgia, the UK, Australia and beyond have been doing a lot of the work that used to happen on a lot in Burbank. The next marker to watch is whether this bill actually moves before the MPA's 2035 projection becomes the only optimistic number in the room.
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