A quarter-century of production data makes the offshoring trend impossible to ignore. Major Hollywood studios now spend more than half of their film budgets outside the United States, according to an Ernst & Young study commissioned by the industry’s largest unions.
The 25-year slide
The study tracked spending from 1999 through 2024 on films budgeted at $5 million or more and TV episodes at $1 million or more. For film, the U.S. share of production spending on movies with at least some U.S. filming dropped from 74% to 42%, a 32-point fall. The share of major-studio films with U.S. filming went from 66% to 54%. The U.S. share of cast and crew on those productions fell from 72% to 43%. Among the 25 highest-budget films, the U.S. production spending share declined by 40%.
TV followed the same path but from a higher base. The U.S. share of production spending on episodes fell from 94% to 64%. The share of episodes with U.S. filming dropped from 96% to 70%, and the U.S. share of cast and crew slipped from 86% to 58%.
Why unions are pushing a fix now
The study arrives as a bipartisan bill in Congress would create a federal film tax incentive. The proposal offers a 20% base credit on cast and crew spending for U.S.-based productions, with uplifts that can take the rate to 30% for independent productions, films relocated back to the U.S., and shoots in federally designated disaster areas. That category currently includes Los Angeles because of the 2025 wildfires.
The coalition behind the research is broad: the Writers Guild of America, SAG-AFTRA, Directors Guild of America, LiUNA, IATSE, and the International Brotherhood of Teamsters all commissioned the EY work. The Motion Picture Association has separately estimated that if the federal credit passes this year, annual U.S. production spending could double by 2035.
What the numbers mean for the business
Runaway production is not a new story, but the EY data frames it as a structural shift rather than a cyclical one. A 20-30% federal credit would narrow the gap with rival markets that have spent years using rebates to pull Hollywood budgets abroad.
Key changes from the study:
- U.S. film production spending share: 74% to 42%.
- U.S. spend share on the 25 highest-budget films: down 40%.
- U.S. TV episode production spending share: 94% to 64%.
For media planners and content buyers, the incentive is worth tracking as a location-planning signal. If it passes, production schedules, crew demand, and local ad ecosystems tied to production could shift back toward the U.S. If it stalls, the data suggests international markets will keep winning the marginal production dollar.
Source: TheWrap
