behind the politics lies a high-stakes financial drama for studios, vendors, and cpas.
by kendale king
kendale king, cpa, works closely with individuals and businesses, helping them reduce their tax burden and get their accounting audit-ready. he serves as a subject matter expert for the financial accounting standards board on the “accounting for and disclosure of digital assets” project. king is on the board of directors for the california society of cpas and serves as the president of the los angeles chapter of the national association of black accountants. he has also worked at deloitte, pwc, siegfried group, propeller, cfgi, netflix, itv studios, and snapchat. king can be reached at kck-cpa.com.
in a move that has shocked the global entertainment industry, president trump proposed a 100 percent tariff on all foreign-made films entering the u.s. market. the declaration via truth social framed the policy as a patriotic push to “make movies in america again,” citing national security concerns and the erosion of domestic film production.
at first glance, it sounds like a headline engineered for outrage—or applause, depending on your vantage point. but beneath the political theater lies a real-world drama with high stakes for everyone, from studio execs to set designers, and even accountants.
the global backlot is under siege
for decades, hollywood has been outsourcing its magic. productions have flocked to canada, australia, the uk, and beyond, lured by generous tax incentives, favorable exchange rates, and stunning landscapes that double for american cities. according to filmla , los angeles has seen a 40 percent drop in film production over the past decade, even before the pandemic, strikes, and wildfires took their toll.
as one studio executive told cnn, “it’s cheaper for hollywood studios to fly everyone overseas and put them up in hotels than to shoot in la.” that’s not hyperbole—it’s economics.
but now, with a 100 percent tariff looming, the calculus could change overnight.
tariffs: a blessing or a bombshell?
for some, the tariff is a long-overdue lifeline. unions and domestic film workers are hopeful it will bring jobs back to u.s. soil. more work for local crews means more opportunities for makeup artists, costume designers, camera operators, and countless others who make movie magic happen.
for studios, however, the mood is less celebratory. the cost of onshoring production could be staggering. if the tariff applies to streaming content and theatrical releases—a detail still unclear—it could disrupt everything from global rights deals to revenue forecasts.
here’s what’s at stake:
- global rights deals could become legal labyrinths.
- revenue modeling will face new volatility.
- p&ls will need to account for unpredictable tariffs and sourcing strategies.
but amid the chaos, there’s also opportunity.
a new investment thesis for hollywood
studios that pivot quickly could find themselves ahead of the curve. reinvesting local intellectual property could reduce distribution risk and expand margins. with california proposing to boost its film and tv tax credit program to $750 million annually, the incentives to stay stateside are growing.
and let’s not forget: the entertainment industry has a history of thriving in tough times. movies boomed during the great depression. streaming surged during covid. u.s. content could become even more attractive to global buyers if the dollar weakens and interest rates drop.
what this means for finance pros
this is a moment to lead for cfos, controllers, and cpas in the entertainment space, not just react. now is the time to:
- model multiple financial scenarios under different tariff outcomes.
- secure favorable contracts with local vendors and production partners.
- reassess ip valuation and explore new domestic investment strategies.
a gartner survey says 59 percent of cfos expect to pass most tariff-related costs onto customers, while only 11 percent plan to absorb them entirely. that means pricing strategies, audience elasticity, and brand loyalty will all come into play.
a career path with star power
this is more than a numbers game for young accountants eyeing the entertainment industry—it’s a front-row seat to cultural transformation.
arts and entertainment cpas don’t just crunch numbers; they help shape careers, manage tours, and advise on everything from tax strategy to instrument repair. with few formal training programs in this niche, internships, networking, and curiosity are the best ways. the work is dynamic, the clients are creative, and the stories are never boring.
whether the tariff becomes law or fizzles out in committee, one thing is clear: the entertainment business is changing. those who understand both art and accounting will be best positioned to thrive.
so, if you’re a financial professional in the industry—or aspiring to be—now’s the time to sharpen your strategy, expand your network, and prepare for the next act.