Warner Brothers and Sony have started conceptualizing their long-awaited move to Las Vegas positioning the Silver State as a potential movie powerhouse. As the 83rd legislative session embarked, both companies have joined their efforts to make the anticipated move to Las Vegas.
Warner Bros. AndSony haare jointly requesting up to $105 million in annual state tax credits and promise in return to make Nevada the booming hub of film production. The subsidy package these entities asked for during the waning days of the 2023 legislature totaled to $4.025 billion over 25 years, with studios becoming eligible to receive transferable tax credits worth 30 percent of their production costs. In other words, Nevada taxpayers would be asked to underwrite nearly one-third the production cost of production films.
In exchange, the film companies have announced plans to build a media campus at the Harry Reid Research & Technology Park in the Southwest Valley with 12-14 soundstages. Warner Bros. claims their investment will turn UNLV into a top-tier film school.
With Las Vegas standing at a prospect of becoming the “next Hollywood,” it is essential to understand both the short term benefits and the potential long-term drawbacks of these projects.
The Short-term Benefits
The most immediate benefits of these large-scale projects would be the creation of temporary construction jobs. The Warner Bros. And Sony facilities are expected to provide more than 19,000 construction jobs. Once in operation, the studios plan to sustain over 17,000 jobs annually.
Beyond job creation, the film industry offers the promise of raising the area’s profile and generating increased economic activity—promises that have proved ephemeral in other locations.
In the best of cases, however, the migration of Warner Bros. and Sony would mean establishing and developing a creative workforce pipeline that will feed the industry jobs. Warner Brothers has previously announced the launch of CREW HQ Production Training in 2025 to promote a community engagement and talent development program.
The Long-term Drawbacks
Despite their excitement, there are some serious long-term effects that lawmakers should keep in mind when voting on tax credits.
First and foremost, film tax credits have almost uniformly failed to deliver on their promises everywhere they have been offered. States performing evaluations of their film tax incentives commonly found that, despite the positive anecdotal evidence that accompanies big film projects, the programs do not provide a substantial return on investment and, if economic development is the goal, other policy avenues might be more productive. Policy analysts from left- and right-leaning think tanks have also questioned whether the programs are the best use of a state’s money.
Thirteen states have eliminated their film production subsidies from 2010-2020, as they dealt with budget pressures and officials view less-than-stellar reviews on the programs’ effectiveness. Even in California—the undisputed home of film production and the state offering the greatest amount of film tax credits—legislative analysts recently concluded that those credits are a net loss to the state. In 2023, the Legislative Analyst’s Office reviewed economic literature on the subject and pointed toward the two highest quality studies available, which suggested “that each $1 of film credit results in $0.20 to $0.50 of state revenues,” meaning film tax credits are a net loser for that state. Ultimately, these credits could defund essential operations such as healthcare and education.
The Chief Operating Officer of Warner Bros., Simon Robinson, has stated plans also include a tourism revenue stream via studio tours similar to attractions at their other studio properties in Burbank, the United Kingdom and Tokyo. It’s unknown whether any proclaimed tourism demand at these studios would constitute new demand in gross or whether it would simply divert demand from existing tourism venues in Southern Nevada, like casinos and live events.
Lastly, the vehicle used to subsidize the film companies—transferrable tax credits—impose serious problems with fiscal management of the state. A transferrable tax credit is basically a voucher that can be sold to a third-party and applied against any state tax liability at a future date. Nevada has used this vehicle to get around the Gift Clause in the state constitution which forbids the state from directly giving taxpayer dollars to a private corporation. But Nevada has struggled in the past to forecast the timing of cash flows when it is what period transferrable tax credits will be redeemed. As the amount of outstanding transferrable tax credits increases, it will become increasingly difficult for Nevada to ensure that it will have sufficient cash assets on hand to settle its debts timely.
Take Action – Tell Your Legislators NO on Film Tax Credits
This article was updated on March 11th, 2025, in accordance with the legislative amendments proposed during and after the Assembly Committee on Revenue on 2/27/2025.
