Hollywood production budgets were already strained. Fires could make matters worse
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- Entertainment executives said the fires could result in ancillary costs going up, although not enough to fundamentally change the calculus for filming in Los Angeles.
- Executives and experts said studios and producers may face rising costs for supplies, permitting and, potentially, insurance at a difficult time when producers already were struggling to manage costs.
As film and television production in Los Angeles lurches back to life, entertainment executives are grappling with a new concern: How the devastating wildfires could add to the already high cost of filming in Southern California.
An estimated 30 film and television productions were briefly shut down due to the Palisades and Eaton fires, according to industry estimates.
While none of the major studio complexes were threatened, poor air quality from the smoke forced executives to halt production for a few days to spare workers, including thousands who had been evacuated from their homes, from exposure.
Entertainment executives said the fires could result in ancillary costs going up, although not enough to fundamentally change the calculus for filming in Los Angeles. Still, the executives and experts said studios and producers may face rising costs for supplies, permitting and, potentially, insurance at a difficult time when producers already were struggling to manage costs to keep production in Los Angeles.
“奥别’re talking about rebuilding the Palisades and Altadena, and that takes building supplies — lumber, drywall and all the things we use in the film industry to build sets,” former Teamsters union leader Steve Dayan told The Times. “It’s going to be very expensive to procure those materials.”
As Hollywood goes through vast technological, financial and global change, the state’s cornerstone entertainment industry and its workers face a hard reality: Lost jobs may never come back.
The wildfires are just the latest disruption to an already wobbly film industry. Communities near entertainment hubs were leveled just as the industry was trying to recover from nearly five years of setbacks and corporate downsizing. Many had hoped the red-carpet awards season, which creates hundreds of industry-related jobs, would mark a return to normalcy after the pandemic, the writers’ and actors’ strikes and threats of additional work stoppages last year. But even those festivities have been scaled back.
“奥别 had COVID, then a major work disruption with the strikes, and now this catastrophic fire,” Dayan said. “This all comes on top of a contraction in the industry. All of these factors together have just been devastating.”
Executives interviewed said it’s too soon to gauge the full impact the wildfires have had on film production.
Radio reports reveal the scramble to contain the Eaton fire as it exploded from a 10-acre brush fire to a devastating 14,000-acre blaze that destroyed thousands of homes.
Hundreds of entertainment workers lost their homes, contributing to a housing shortage in a region already notorious for its sky-high costs. The fires, experts said, could prompt some entertainment workers to move to less expensive states.
“The biggest single structural advantage of filming in L.A. has always been the people who live here,” said Kevin Klowden, executive director of Milken Institute Finance. “But the ancillary costs of the fire are going to add up, and that’s a huge issue.
“Insurance costs are going up, housing costs are going up,” Klowden said. “Will people be able to stay in L.A.?”
The migration of film production was already underway.
Studio chiefs have been steering productions to regions where labor is cheaper, including New Mexico and Central Europe. Many states offer generous tax benefits that lure filmmakers.
L.A.’s film production community was coming off an unsettling year. 2024 marked the second lowest level of production in Los Angeles ever, according to nonprofit agency FilmLA, only doing better than 2020, the year of pandemic-related shutdowns.
“Los Angeles already was having problems keeping production in Southern California. This [disaster] certainly doesn’t help at all,” said Brian M. Kingman, managing director for the entertainment practice at Gallagher, an insurance broker and risk management firm.
The Palisades and Eaton fires destroyed or damaged several locations that have been used to make movies and TV shows.
The crisis caused by the Palisades and Eaton fires may increase the urgency for state officials to expand California’s film tax incentive program, which Gov. Gavin Newsom has proposed boosting to $750 million from the current $330 million.
“It’s now more imperative than ever that we ramp up production in the state where the majority of our members live,” the Television Academy said in a statement Friday.
As firefighters continue to battle multiple major wildfires, The Times has compiled a list of resources to help.
In addition to higher housing costs for film workers, the fires could make it more challenging to provide the basics of film production prep, such as securing lumber and even film permits, executives said.
“Whether it’s the city of Los Angeles, Pasadena, Santa Monica or Malibu, they all have their own permitting guidelines,” Dayan said. “So what kind of additional restrictions might be added?”
Some worry that premiums for insurance plans, designed to cover film producers for losses and unexpected interruptions, could increase, particularly for productions located in neighborhoods near the wilderness, such as Acton and Santa Clarita.
Insurance executives, though, downplayed the likelihood of rate hikes.
“These fires, although they have an impact, it is not so serious as to create a shift in the marketplace,” Gallagher’s Kingman said.
As Hollywood goes through vast technological, financial and global change, the state’s cornerstone entertainment industry and its workers face a hard reality: Lost jobs may never come back.
“Rates were escalating post-pandemic,” Kingman said, “because of the big losses the [insurance] marketplace suffered in the entertainment industry,” such as paying claims for extended shutdowns for Hollywood and Broadway productions as well as canceled live events.
Recent efforts by film producers to expand their insurance coverage could stall in the short term, he said. That is at least until insurance carriers figure out the losses from all the claims made to the various arms of their businesses.
“The big question is what does this do to the entire insurance industry?,” Kingman said. “And that’s very complex.”
The deadly blazes could affect home insurance policies across the state.
At least 27 people have died as a result of the blazes that broke out Jan. 7. The Palisades fire has burned more than 23,000 acres and destroyed at least 6,300 structures. The Eaton fire in Altadena scorched 14,000 acres and destroyed more than 9,400 structures, according to California Fire.
There are a lot of unknowns for the entertainment industry, Kingman and other experts said.
One thing is certain, though, Dayan said: People on the lower rungs of the economic ladder likely will suffer the most.
“It’s very sad because the crews are the ones that get hit the hardest,” Dayan said. “It’s the working crew people — the catering assistants, [production assistants] and all the different crafts. And these are the people who [were sidelined] because of the work stoppages and the industry contraction.”
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