New York’s Big Bet: Expanding TV & Film Studios Amid Industry Uncertainty (2024)

Sunset Pier 94 will open six sound stages in Hell’s Kitchen, but concerns about industry instability raise questions about the project’s long-term commercial viability. In the aftermath of strikes that shut down filming, fewer and shorter productions may mean jobs never regain pre-pandemic levels.

The cavernous Brooklyn Navy Yard building, once a machine foundry, is the length of a football field and has 58-foot-high ceilings. Today, it is filled with scaffolding, as real estate developer Doug Steiner spends $95 million to add two more sound stages to the Steiner Studios complex there.

He had planned on beginning the renovation a couple of years ago, but the success of The Marvelous Mrs Maisel delayed the project since it was using the unrenovated space and he didn’t want to force such an important client to relocate the intricate sets its crew had built.

In that time, interest rates rose, raising the cost of the project. More importantly, the film and TV industry was shut down last year by actors and writers strikes that dented Hollywood profits.

And worrisome signs for the tattered industry continue to abound, including attendance declines, belt-tightening on budgets and turmoil among media companies.

Ticket sales for theatrical releases during Memorial Day weekend, a bellwether for the start of the crucial summer season, were the worst in 30 years, the pandemic’s 2020 aside. In The Bronx, the Concourse Plaza Multiplex Theater shut for good last week, the most recent of several recent multiplex closings in the city, leaving only one cinema for the entire borough.

Still Steiner is forging ahead.

“They will be stages 31 and 32,” he said matter of factly.

It’s a big bet. Six months after the end of strikes that crippled film and TV production, jobs in the industry remain well below pre-pandemic levels. Some studios are only a little more than half full, and some union leaders are predicting employment will never return to pre-pandemic levels.

Nonetheless, the administration of Mayor Eric Adams is continuing to push ahead with a plan to double the studio space in the city.

“There are fewer productions being made, and all the productions are under orders to produce for less money,” said Steiner. “So work is still coming here, but the volume is way down.”

The rebound in jobs has been particularly slow. Direct production employment had reached only 41,800 in April, about 25% below the pre-strike number, according to jobs data from the New York State Department of Labor.

Since many of the people working in the industry, such as caterers, are counted elsewhere in job statistics, the total number of people employed in the industry today is probably about 85,000. Before the strike, about 100,000 people worked in some way on film and TV projects, according to an analysis by James Parrott, an economist at the Center for New York City Affairs at the New School.

Permits filed with the city’s Office of Media and Entertainment have increased every month so far this year but remain 24% below the level for the first four months of 2019.

In April, Broadway Stages in Brooklyn’s Greenpoint was at only 50% of capacity, the lowest level in memory, although business has picked up since and is now up to 60% capacity, said spokesperson Barbara Leatherwood. The studio is looking to replace its longest running tenant, the police procedural Blue Bloods, which wasn’t renewed by CBS after 14 years.

Kaufman-Astoria Studios in Queens is “busy but not full,” a spokesperson for the company said.

Steiner Studios, the largest complex in the New York area by far, is filled. “We got lucky after the strike with a couple of feature films,” said Steiner.

Disaster Films

It is also possible the industry will face another labor shutdown. Six craft unions are in negotiations for new contracts, with the crucial International Alliance of Theatrical Stage Employees saying it will not extend talks beyond the July 31 expiration of the current one.

“Nobody wants to get caught in the middle of production,” said Hal Rosenbluth, president of Kaufman-Astoria.

The number of productions worldwide that started filming in the first quarter fell by 7% compared with the same period as year ago, according to a report from the tracking service ProdPro, instead of increasing dramatically as studios tried to make up for the projects halted by the strike.

Costs are clearly on the minds of studios as well with the actors and writers deals raising costs by $450 million to $600 million a year, resulting in a period of tight spending controls.

But the most important issue is the uncertain future of studios like Paramount and Warner Brothers Discovery, with Paramount up for sale and Warner Brothers desperately trying to cut costs to reduce its debt while also exploring mergers.

Disney is under enormous pressure from shareholders to improve the financial performance of its Disney+ streaming unit, which has never made a profit.

Even Amazon Studios laid off several hundred workers early this year, leaving Netflix as the only studio doing well financially and able to afford as many productions as it wants to green light.

Mergers are likely to reduce the number of studios, the volume of films and shows in production each year and the length of TV seasons, which now can be as few as four episodes where the standard for a network show was once 22.

The outlook is so worrisome that Tommy O’Donnell, president of the Theatrical Teamsters Local 817, warned prospective job-seekers at a recent conference that employment may never return to its pre-pandemic levels.

“I think you are going to see more limited series of episodic television shows with less episodes,” he said. Their best hope? Some people are leaving the industry.

Big Apple Doubles Down

The Adams administration seems determined to ignore the changes in the industry as it continues to support the building of more stages, aiming to double the 2 million square feet of existing sound studio stages.

Sunset Pier 94 will open six sound stages on Manhattan’s West Side next year, developed by Vornado under a long-term lease with the city Economic Development Corporation, which has committed to maintain the publicly owned pier.

A new facility involving Robert De Niro is adding 91,000 square feet of space in Astoria and another by East End Studios is expected to open in Sunnyside as well.

Pat Swinney Kaufman, commissioner of the Mayor’s Office of Media and Entertainment, declined to be interviewed by THE CITY but provided a statement that said in part, “We are excited to be hearing from industry stakeholders about new, major projects already in production and in the pipeline.”

Andrew Kimball, head of the city’s Economic Development Corporation, told the Los Angeles Times last month, “even with the changes we remain bullish.”

New York does have many strengths. Well known directors and actors who live here can sometimes dictate that productions are based in New York, as Dick Wolf did with the Law & Order franchise. The deep talent pool goes well beyond the people seen on camera and is regarded as good as that in Los Angeles.

Most of all, the controversial state tax credit, whose cap last year increased to $700 million a year from $420 million and raised to 30% of most costs, allows the state to compete with rivals like California and Georgia, both of which have similar benefits.

The existing studios say they have the connections and track record to continue to attract shows even if a glut of studio space occurs, although they admit they will need to reduce their prices.

No one has more on the line in terms of his investment than Doug Steiner, who in the last 25 years has built out a complex of 29 stages that occupy 50 of the 300 acres at the Navy Yard and can be crowded with as many as 3,500 workers on a day when it is stages are at full capacity.

Its biggest advantage is that it seems to be an oasis apart from the city both in Brooklyn and at the Navy Yard.

“I think it makes compelling sense to have an LA-style studio lot in New York,” he says. “The talent is here and the crew base is fantastic. I may get dinged a bit on rates but I’ll still be busier than others if the market turns down.”

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