Hollywood is staring down a financial gun barrel it hasn’t seen for at least 93 years—not since the Great Depression. No longer seen as economically bulletproof, the movie industry is teetering on the brink.

Battered by subsidized competition from other states and countries, COVID shutdowns, and the crippling effects of back-to-back labor strikes in 2023, Tinseltown’s situation is dire. In just four years, annual shoot days in Los Angeles have collapsed from a post-COVID high of nearly 38,000 to near-COVID lows of 19,000 (annual “shoot days” are the cumulative number of productions taking place each day over the course of a year). Over the past three years, soundstage occupancy has plummeted from 90 percent to 62 percent. More than 51,000 jobs have been shed during the same period, 42,000 of them in the past 24 months. Where have the jobs gone? Everywhere but California. 

Seventeen years after the first California production incentive was signed into law by Republican Governor Arnold Schwarzenegger, California Democrats have failed to keep pace with the competition. In a desperate effort to do something—anything—governor Gavin Newsom last year successfully pushed the legislature to boost the annual incentive cap from $100 million to a whopping $750 million—which would have been competitive … 10 years ago.  

All this makes November’s gubernatorial election perhaps the most existential choice in Hollywood’s history. The differences between Democrat Xavier Becerra and Republican Steve Hilton could not be starker. As the Hollywood Reporter aptly framed it, the entertainment industry must decide “between the candidate they can live with who won’t help them and the candidate who can help them and who they can’t live with.”

Hilton’s rescue package is nothing if not aggressive—proposing to raise the state’s incentive from 45 percent to 60 percent while eliminating the cap entirely. In layman’s terms, that means the incentive would take all comers, all of whom would be able to give their investors a discount unparalleled anywhere else in the world. If that sounds uncharacteristically generous for a Republican, it is—it’s a stimulatory approach more often associated with the ideas of Cass Sunstein than Milton Friedman. But film financing has never existed in a true free market environment: subsidies, tax credits and offsets have been a part of the global financing structure for decades, and the proliferation of incentives among competing jurisdictions over the past 20 years has created a race to the bottom from which California cannot recover unless it fights back with every tool at its disposal. Hilton’s plan deploys the full toolset and then some. 

Becerra, by contrast, has sidestepped any talk of changing, much less of uncapping, the incentive—instead offering a set of largely ineffectual policy proposals which sound like they were cooked up by an AI and jotted on the back of a napkin: a “California Entertainment Summit” to “produce a public action plan,” and the promise of a “California Content Performance Disclosure requirement” to give unions and guilds more transparency in collective bargaining.

In short, Beccera’s plan sounds like Sacramento-speak for “Let them eat cake.” The longstanding problem with California’s incentive has been that it fails the basic test of film financing. Effective incentives give producers a tool with which to raise money, keeping productions in-state. California’s incentives reward producers who’ve already raised money—creating an immediate disincentive to even consider shooting in the state. Hilton’s plan understands those structural deficiencies and seeks to remedy them. Becerra’s plan is just a proposal to wallpaper over an unsustainable status quo. 

Given the widespread perception of Hollywood as a doggedly left-leaning town, there’s no small amount of irony in the seeming choice between a Republican fighting for a Democrat-style stimulus versus a Democrat advocating for Republican-style austerity. The on-the-ground reality, however, is quite different—spend any amount of time on a set or a studio lot and you rapidly realize that Hollywood breaks down into three roughly equal political herds: outspoken liberals, quiet conservatives, and political agnostics who will align with whichever side butters their bread.

Consider the makeup of the group behind the Academy Awards, the Board of Governors of the Academy of Motion Picture Arts and Sciences—the elite of the elite. Of the organization’s current class of 55 governors—several of whom are personal friends—43 are American citizens. Of that group, 30 (70 percent) have publicly donated to Democratic Party candidates or causes. The remaining 13 (30 percent) are not Republican donors, but have no apparent political affiliation.

If Becerra’s “plan” seems to hover somewhere between apathy and antipathy, that’s because it’s in keeping with the past 16 years of one-party rule in Sacramento—a regime which has done little to nothing for the industry that quite literally built the state—an industry it has long taken for granted as a rich source of donor cash. Now that the industry is itself in need of rescue, weak-kneed proposals like Becerra’s reveal how one-sided the relationship has always been. Money was only ever supposed to flow from Hollywood to Sacramento—never the other direction.

This time, however, lives and livelihoods are at stake. Many haven’t worked for years. Homes are facing foreclosure. Film industry workers no longer have the luxury of partisan purity. The survival of the industry hangs in the balance—and only the Republican candidate has stepped up to the plate. 

The political winds may be changing in Hollywood, as they have changed many times before. As precedent, look no further than Jack Warner—famed namesake of Warner Bros. Despite his fierce loyalty to the Republican Party, Warner was savvy enough to see where the winds were blowing following the November 1932 election of Franklin Delano Roosevelt. Party or no party, business came first. In the weeks preceding the inauguration, Warner chartered a train, filled it with contract stars like Ginger Rogers, James Cagney, and Bette Davis, and set out on a cross-country, whistle-stop promotional tour from Hollywood to New York City. He timed the tour to coincide with FDR’s March 4 inauguration in Washington D.C. as well as the Manhattan premiere just five days later of Warner’s splashy new backstage musical, 42nd Street.

The so-called “42nd Street Special” was an unprecedented stroke of promotional and politicalgenius. With the country still in the throes of the Great Depression and his own studio’s back to the wall, Warner seized on the opportunity to court an incoming president who promised to relieve voters’ long-term suffering while also promoting a movie designed to relieve their short-term suffering, if only for a couple of hours.  

Did Warner change his stripes? Absolutely not. A staunch anti-communist, he supported the Hollywood blacklist in the 1950s and took out full-page New York Times ads in support of Richard Nixon during the 1960 presidential campaign. When the health of the movie business was at stake, however, it wasn’t a close call—Hollywood’s interests came first. 

Warner made the right call in 1933. It’s up to his successors to make the right call in 2026.