Warner Bros. wants to open a film studio in Las Vegas

Warner Bros. Discovery has announced plans to expand its production facilities to Las Vegas, Nevada. The company will commit to investing a total of at least $8.5 billion (over 17 years) in Las Vegas, but under one condition: the state must significantly expand its film tax credit program.

Nevada allocates only $10 million in transferable tax credits for all film productions in a 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 as much as California, and Georgia puts over $1 billion into its tax credit program. The Peach State actually has no cap on the amount of tax credits it can pay out—either in total or for individual films.

In other words, Nevada had better start passing lots of laws if it wants to be a major player. That it hasn't done so so far isn't because it hasn't tried hard enough. An attempt to expand the state program in 2023 failed despite the support of stars like Mark Wahlberg and Jeremy Renner. Under the rejected proposal, the cap on tax credits would have risen to $190 million. The bill's initiator, Roberta Lange, is willing to settle for half that amount; with the involvement of Warner Bros. Discovery, the bill could cross the finish line when Nevada's Senate convenes in February 2025.

By our calculations, $190 million in annual tax credits to attract $500 million in guaranteed WBD spending isn't bad. Should the state Senate approve, Warner Bros. Studio will lease, operate and fully occupy Nevada Studios, a 34-acre studio site that makes this possible in Vegas, and will remain in Vegas. WBD will partner with UNLV and Birtcher Development to establish workforce development programs at UNLV's Harry Reid Research & Technology Park, including career training, internships, research opportunities and programs for students from preschool through high school and higher education. As part of the deal, the facility will also be renamed Warner Bros. Studios Nevada.

WBD spends $20 billion a year on content, so $500 million is a drop in the bucket. And the proposed space pales in comparison to the 110-acre campus in Burbank or the 200-acre campus in Leavesden, U.K. But it's only Warner Bros.' third fully operational production facility. While Warner Bros. may be the first studio to make as much of an impact on the Strip as “The Hangover,” which it distributes, it's not the only studio coming to town. Another Nevada politician, California Assembly Majority Leader Sandra Jauregui, recently announced she would support 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 community of Las Vegas and WBD as we look ahead to our next 100 years of extraordinary storytelling,” Simon Robinson, chief operating officer of Warner Bros. Studios, said in a statement.

“When we speak to citizens, we hear time and time again that we need to continue to diversify our economy in Southern Nevada while also providing the necessary funding for workforce development,” Lange said. “Those are top priorities for all of us, and I'm proud to say my bill accomplishes both. It's safe to say that having a leading partner with the strength of Warner Bros. and its ability to keep the studios full from day one is a critical difference-maker and allows us to successfully meet both of those priorities.”

So David Zaslav might be heading for the desert and burying his head in the sand. WBD stock has fallen 70 percent since the merged company was formed in April 2022, and the company still has $37 billion in debt. And oh yeah, the company recently audited its own TV businesses and found they're worth $9 billion less than previously thought.