As film and television production picks up steam again in Los Angeles, entertainment executives are grappling with new concerns. It’s about how devastating wildfires are increasing already high filming costs in Southern California.
An estimated 30 film and television productions were temporarily halted due to the Palisades and Eaton fires, according to industry estimates.
None of the major studio complexes were under threat, but poor air quality from the smoke led executives to spend several days trying to protect employees from infection, including the thousands who had been evacuated from their homes. We had no choice but to stop production.
Entertainment executives said the fire could increase incidental costs, but not enough to fundamentally change the calculations for filming in Los Angeles. Still, studios and producers could face higher costs for supplies, permits and possibly insurance at a difficult time when production companies are already struggling to control costs to keep production in Los Angeles. said executives and experts.
“We’re talking about rebuilding the Palisades and Altadena, and that requires building materials: wood, drywall, everything that the movie industry uses to build sets,” said former Teamsters union leader. Steve Dayan told the Times. “It’s very expensive to procure that material.”
The wildfires are just the latest disruption to an already volatile film industry. Just as the industry was trying to recover from nearly five years of setbacks and downsizing, communities near entertainment hubs were hit with a plateau. Many are hopeful that the red carpet awards season, which creates hundreds of industry-related jobs, will be a return to normalcy from last year’s pandemic, writers’ and actors’ strikes, and threats of additional work stoppages. Ta. However, the scale of such festivals has been reduced.
“The COVID-19 outbreak occurred, then there was a large-scale work stoppage due to strikes, and then we had this devastating fire,” Dayan said. “This is all happening on top of a shrinking industry. All of these factors combine to create a devastating situation.”
Executives interviewed said it was too early to know the full impact of the wildfires on film production.
Hundreds of entertainment workers were left homeless, contributing to a housing shortage in an area already notorious for soaring prices. Experts said the fires could prompt some entertainment workers to move to cheaper states.
“The biggest structural benefit of filming in Los Angeles has always been the people who live here,” said Kevin Crowden, executive director of Milken Institute Finance. “But the ancillary costs associated with fires add up, and that’s a big problem.
“Insurance costs are going up, housing costs are going up,” Crowden said. “Will people be able to stay in L.A.?”
The studio has been plagued by trouble, including protests by video game actors who walked a picket line outside Warner Bros. Studios in Burbank last August.
(Myung Jae-chun/Los Angeles Times)
A transition in filmmaking was already underway.
Studio leaders have steered production to areas where labor costs are lower, such as New Mexico and central Europe. Many states offer generous tax incentives that attract filmmakers.
LA’s filmmaking community was coming to the end of an uncertain year. According to the nonprofit FilmLA, 2024 will be Los Angeles’ second-lowest production level on record, only doing better than 2020, which had pandemic-related closures.
“Los Angeles was already having problems keeping production in Southern California. [disaster] It certainly doesn’t help,” said Brian M. Kingman, managing director of the entertainment practice at Gallagher, an insurance broker and risk management firm.
The crisis caused by the Palisades and Eaton fires could prompt state officials to increase the urgency of expanding California’s film tax incentive program, but Gov. Gavin Newsom plans to expand the program to its current $330 million budget. It is proposed to increase the amount from $750 million to $750 million.
“It is now more urgent than ever to increase production in the states where the majority of our members live,” the Television Academy said in a statement Friday.
A firefighting helicopter drops water on the Palisades Fire in Pacific Palisades, January 7, 2025.
(Brian van der Brug/Los Angeles Times)
In addition to rising housing costs for film workers, the fire could make basic preparations for film production, such as securing lumber and film permits, even more difficult, executives said.
“Whether it’s the city of Los Angeles, the city of Pasadena, the city of Santa Monica, the city of Malibu, they all have their own permitting guidelines,” Dayan said. “So what further restrictions might be added?”
Some fear that premiums for insurance plans that cover filmmakers’ losses and unforeseen interruptions could rise, especially for filmmakers located in areas close to nature, such as Acton or Santa Clarita.
But insurance executives downplayed the possibility of a rate hike.
“While these fires have an impact, they are not severe enough to change the market,” said Gallagher’s Kingman.
“Interest rates were going up after the pandemic,” Kingman said. [insurance] The entertainment industry took a hit, with insurance payouts for long-term closures of Hollywood and Broadway productions and cancellations of live events.
Recent efforts by filmmakers to expand insurance coverage could stall in the short term, he said. At least that is until the insurance company knows the losses from all the claims made against the various parts of the business.
“The big question is, what does this mean for the insurance industry as a whole?” Kingman said. “And it’s very complicated.”
At least 27 people were killed in the fire that broke out on January 7th. The Palisades Fire has burned more than 23,000 acres and destroyed at least 6,300 buildings. The Eaton Fire in Altadena has burned 14,000 acres and destroyed more than 9,400 buildings, according to Cal Fire.
Kingman and other experts say there are many unknowns in the entertainment industry.
But one thing is certain, Dayan said: Those at the bottom of the economic ladder are likely to suffer the most.
“It’s very sad because the crew members are the ones who will suffer the most,” Dayan said. “It’s the working staff, the catering assistants. [production assistants] and various crafts. And these people [were sidelined] This is because of work stoppages and industry downsizing. ”
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