Warner Bros. Discovery has announced plans to expand its production facilities into Las Vegas, Nevada. The company will commit to spending a total of at least $8.5 billion (over 17 years) in Vegas, but under one condition: the state must significantly expand its film tax-credit program.
Nevada earmarks just $10 million in transferable tax credits for all film productions in a single year, and a single film can only receive $6 million of that. California offers $330 million in annual credits — and that’s still considered low. New Jersey and New York offer more than twice California’s number and Georgia puts $1 billion-plus into its tax-credit program. The Peach State doesn’t actually have a cap on what it can dole out in tax credits — both on an overall and individual-film basis.
In other words, Nevada had better start passing a lot of legislation if it wants to be a major player. The fact that it has not yet is not for a lack of trying. A 2023 effort to expand the state’s program back in failed, despite support from stars like Mark Wahlberg and Jeremy Renner. Under the nixed proposal, the tax-credit cap would’ve grown to $190 million. The bill’s sponsor, Roberta Lange, is willing to settle for half that; having Warner Bros. Discovery on board could carry it across the goal line when Nevada’s senate session convenes in February 2025.
By our math, $190 million in annual tax credits to attract $500 million in guaranteed WBD spend is not bad. Should the state senate agree, the Warner Bros. studio will lease, operate, and fully occupy Nevada Studios, a 34-acre studio space that can make this happen in Vegas, and stay in Vegas. WBD will partner with UNLV and Birtcher Development to establish workforce-development programs at UNLV’s Harry Reid Research & Technology Park, including vocational training, internships, research opportunities, and programs for K-12 students and higher learning. As part of the deal, the facility will also be renamed as Warner Bros. Studios Nevada.
WBD spends $20 billion a year on content, so $500 million is something of a drop in the bucket. And the proposed space pales in comparison to the 110-acre Burbank campus or 200-acre campus in Leavesden, UK. But it does represent only the third Warner Bros. fully-operated production space. Though Warner Bros. may be the first to hit the strip as hard as “The Hangover,” which it distributed, it isn’t the only studio coming to town. A different Nevada politician, Assembly Majority Leader Sandra Jauregui, recently announced she would sponsor a plan to bring Sony to Sin City.
“We are fully committed and excited about the potential of a long-term partnership and presence in Nevada and are confident it will be a win/win for the State of Nevada, the Las Vegas community and WBD as we look ahead to our next 100 years of exceptional storytelling,” Simon Robinson, the chief operating officer of Warner Bros. Studios, said in a statement.
“When talking with citizens we hear repeatedly that we need to further diversify our southern Nevada economy and at the same time commit the resources to develop our workforce,” Lange said. “These are top priorities for us all, and I can proudly say my legislation accomplishes both. It’s safe to say that having a lead partner with the depth of Warner Bros. and its ability to keep the studios full starting from day one is a key difference maker and enables us to successfully meet these two priorities.”
So David Zaslav may be heading to the desert, where he may want to bury his head in the sand. WBD stock has fallen 70 percent since the merged company was formed back in April 2022, and the company still holds like $37 billion in debt. And oh yeah, it recently audited its own TV businesses and found them to be worth $9 billion less than what it previously believed.
