Disney has made $2.2 billion from filming productions like ‘Avengers: Endgame’ in the U.K.
©Marvel Studios 2018
Disney has been handed $2.2 billion by the government of the United Kingdom over the past 15 years in return for filming movies and streaming shows in the country according to analysis of more than 400 company filings
Disney is believed to be the biggest single beneficiary of the Audio-Visual Expenditure Credit (AVEC) in the U.K. which gives studios a cash reimbursement of up to 25.5% of the money they spend there. The generous fiscal incentives have attracted all of the major Hollywood studios to the U.K. and the country has reeled in the returns from it.
Data from the British Film Institute (BFI) shows that foreign studios contributed around 87% of the $2.2 billion (£1.6 billion) spent on making films in the U.K. last year. It is a 7.6% increase on the sum spent in 2019 and is in stark contrast to the picture in the United States.
According to permit issuing office FilmLA, the number of on-location shooting days in Los Angeles fell 35.7% from 2019 to 2024 making it the second-least productive year since 1995 aside from 2020 when it was the height of the pandemic.
The outlook hasn’t improved since then with FilmLA’s latest data showing that between April and June this year there was a 6.2% drop in shooting days on the same period a year ago. It followed a 22.4% decline in the first quarter with FilmLA noting that “each drop reflected the impact of global production cutbacks and California’s ongoing loss of work to rival territories.”
The one-two punch of the pandemic followed by the 2023 SAG-AFTRA strikes put Hollywood on the ropes just as the U.K. began drafting a plan to improve its fiscal incentives to film-makers. It was implemented this year and increased the reimbursement by 0.5 percentage points to its current level of 25.5%.
It forced U.S. states to follow suit so in May New York passed a state budget that includes expanded film incentives. Then in June both houses of California’s legislature passed a budget bill that increases the cap on its film and television tax incentives from $330 million to $750 million a year, making them the most generous outside of New York and Georgia. However, it may be too little, too late.
Too little, too late?
In February, Sharon Waxman, author and founder of the entertainment website The Wrap, told Britain’s ITV News that “the U.K. has put a ton of effort and time and money and thought in incentive systems in place that is drawing major, major productions from people like Disney, Netflix. Marvel movies are being shot there. This is a big problem for LA because California has been very slow to get its act together.” It is no exaggeration.
When streaming started to explode in popularity, studios descended on the U.K. in order to take advantage of its fiscal incentives and keep filming costs down. To ensure that Disney didn’t get squeezed out, it signed a deal in 2019 which reportedly gave it use of almost all of the U.K.’s historic Pinewood Studios for a decade.
Arch-rivals Amazon and Netflix have taken up long-term residence in nearby Shepperton Studios contributing to the emergence of the U.K. as Hollywood’s key competitor. So much so indeed that multiple new studio facilities are under development in the U.K. due to a shortage of filming space.
A third of Disney’s Marvel productions have been made in the U.K. – even when it appeared they were taking place elsewhere ©Marvel Studios 2022. All Rights Reserved.
Photo courtesy of Marvel Studios
Almost a third of Disney’s 54 Marvel superhero movies and streaming shows have been shot in the U.K. and in a recent interview with Variety, Marvel’s president Kevin Feige explained that this trend is set to continue.
“Five or six years ago, where everybody was fighting for stage space in the great expansion…we had the opportunity to lock up Pinewood, which is why many of our movies will be there for the foreseeable future.”
London calling
“Disney, in particular, seems to have made a sizable long term commitment to the U.K.,” notes industry expert Valliant Renegade. “While California may desperately want the business back, the fact is that the cost of production there is just too high by comparison, and every studio knows it. Even costs in places like Georgia are creeping up because of the labor unions that dominate the U.S. production industry.”
He adds that “when you look at the slate of films from studios like Warner and Universal, they maybe make one or two larger budget films a year (Superman and Jurassic World) with a slew of mid-range and smaller films like horror and drama. Disney, however, will have dropped half a dozen films by year’s end that each cost an average of $200 million or more, not even including James Cameron’s Avatar.
“Short of California and other states not only tremendously increasing their annual tax credit pools, but also significantly raising the amount of credit per dollar spent (to offset higher domestic costs), production lines like Disney’s will remain largely out of reach. Most of these studios have well-established business operations in the U.K. and long term relationships with British lenders like Barclays, Lloyds, HSBC, etc. They’re not likely coming back anytime soon.”
Testimony to this, Disney announced last year that it plans to invest $5 billion over the next five years in films, television and streaming shows made in the U.K. and Europe. Disney added that since 2019 it has spent $4.8 billion (£3.5 billion) on production in the U.K. across 41 shows and 29 feature films supporting more than 32,000 jobs.
In comparison, Netflix reportedly spent $6 billion on U.K. content between 2019 and 2023, while Amazon claimed in 2022 that it had spent around $1 billion over four years on U.K. television, movies and live sports. It wasn’t out of the goodness of the studios’ hearts.
Analysis of 410 filings reveals that over the past 15 years Disney banked $2.2 billion (£1.6 billion) from the U.K. government even though it made $127.8 billion of pre-tax profit during that time as this author reported in The Times of London.
The chart below is based on the reimbursements shown in filings for the Disney subsidiaries behind the 54 movies and streaming shows made in the U.K. which have been released since 2010.
How Disney secured $2.2 billion from the U.K. government
MSM
It reveals that the biggest handout was the $138.1 million (£101.2 million) given to the Disney company which made both seasons of Star Wars spinoff Andor. It was followed by the $105.1 million (£77 million) paid to the production company behind 2019’s Star Wars: The Rise Of Skywalker whilst The Force Awakens, the first of Disney’s Star Wars movies is third on the list with $100.3 million (£73.5 million). Next up is superhero movie The Marvels with its $76.8 million (£56.3 million) reimbursement representing a staggering 37.3% of its box office haul.
The 16 Marvel movies made in the U.K. banked a total of $698.1 million (£511.4 million) which is more than any other Disney franchise. However, on average, Star Wars holds the record with $84 million (£61.5 million) reimbursed per production.
Disney declined the opportunity to comment on the data and it doesn’t need to as it comes directly from its filings. A condition of getting the reimbursement is that at least 10% of a production’s core costs need to relate to activities in the U.K. and in order to demonstrate this to the government, studios set up a separate company there for each picture. This lifts the curtain on precisely how much it costs to make movies as each company has to file financial statements which reveal everything from the headcount and salaries to the total costs and the amount of reimbursement.
‘Andor’ received a higher tax credits than any other production ©2022 Lucasfilm Ltd. & TM. All Rights Reserved.
Des Willie / Lucasfilm Ltd.
The reimbursement is calculated on up to 80% of core expenditure so in order to get back the maximum 25.5% of the money they spend in the U.K., production companies need to ensure that at least 20% of their core costs are spent outside the country. It has helped to drive studios to even more countries outside the U.S. which offer more generous incentives than it does.
A dream ticket
Although the reimbursement in the U.K. is capped on 80% of core expenditure, there is no limit to the amount that can be paid out.
Critics claim that highly profitable Hollywood studios shouldn’t need subsidies and have requested a review of the incentives. “No wonder so many taxpayers feel shortchanged when they see big businesses pocketing huge savings,” says John O’Connell, chief executive of the TaxPayers’ Alliance. “We urgently need to overhaul the tax system, cutting through the complexity and scrapping loopholes and exemptions to ensure fairness and transparency for everyone.”
The argument is strengthened by the fact that the film industry is still a niche sector in the U.K. as the government itself admits. When it increased the level of reimbursement around a decade ago it noted that “this measure is expected to have a positive impact on the film industry, but is not expected to have significant wider macroeconomic impacts.”
The latest data from the BFI shows that in 2019, every $1.37 (£1) of reimbursement handed to studios generated $11.33 (£8.30) of additional Gross Value Added (GVA) benefit for the U.K. economy. It led to a total of $10.5 billion (£7.7 billion) in GVA being generated by the fiscal incentives for film in 2019.
Released in December 2021, the BFI’s triennial Screen Business report showed that between 2017 and 2019, the fiscal incentives to studios generated a record $18.4 billion (£13.5 billion) of return on investment to the UK economy and created more jobs than ever before.
In 2019, film making generated 37,685 jobs in London and 7,775 throughout the rest of the U.K. The BFI’s report added that when the wider impacts of the film content value chain are taken into consideration, 49,845 jobs were created in London in 2019 and 19,085 throughout the rest of the U.K. It is economic impact that the U.S. is missing out on.
“The California Production Coalition estimates that the average location shoot adds $670,000 and 1,500 jobs a day to a local economy,” says Philip Sokoloski, FilmLA’s vice president of integrated communications. “Numbers like these make it plain: California can’t afford to surrender any more work to its competitors.”
Filming in Los Angeles fell by 35.7% from 2019 to 2024 (Photo by DAVID SWANSON/AFP via Getty Images)
AFP via Getty Images
The same goes for Georgia. In August the Wall Street Journal reported that production spending there has nearly halved over the past three years, with the number of projects dropping from 412 in fiscal 2022 to just 245 in the latest year. The city was once a major production hub for Disney but London has taken its crown and it hasn’t been lost on the leading industry pundits.
“The irony? Disney brands itself as America’s storyteller, the entertainment empire founded in California and expanded across the United States. Yet when it comes to the bottom line, the company is exporting what was once its crown jewel to foreign soil,” said the movie experts at That Park Place.
Tariffs: The Sequel
In May President Trump announced that he will take drastic action in an attempt to stop American studios from making movies abroad. Trump rocked Hollywood with the announcement that a 100% tariff would be applied to movies entering the U.S. that are produced in “foreign lands”. Although it has yet to be implemented, it is understood to still be on the agenda. Trump’s special adviser, the actor Jon Voight, recently revealed that a 120% tariff on film and television as well as strengthened federal and state tax incentives are being discussed at the White House. So far, it hasn’t deterred Hollywood studios.
“The U.K. is still a very significant destination for us,” said Tom Rothman, chairman and CEO of Sony Pictures’ Motion Picture Group in June. “The U.K., in addition to being a favourable economic environment, has some of the best crews in the world.”
U.K. studios are so busy that ‘Wednesday’ was unable to film there © 2025
HELEN SLOAN/NETFLIX
Executives have expressed scepticism about whether the tariffs could be implemented as movies are intangible assets so there is no border for them to pass when they are imported. Indeed, a director located in Hollywood can remotely edit a movie which is stored on a server in London and it could even be streamed from there to the U.S. so the studio would never actually import it and need to pay a tariff.
However, once a theater in the U.S. screens a movie there is no doubt that the media is in the country so this could make the exhibitors liable to pay the tariffs which would ultimately serve the same purpose as the studios doing this.
Ironically, if U.S. studios reduced their reliance on the U.K. it could actually benefit British movie-makers. In 2013 Edgar Wright, the director of classic U.K. action comedies Shaun of the Dead, Hot Fuzz and The World’s End, said that “while the tax break is good for Hollywood films shooting here, it’s probably not that great for British films shooting in the U.K. Some middle-to-low budget films are going to find themselves without crew because all the American films are shooting here.”
This is still a problem to this day. When hit Netflix series Wednesday Season 2, Part 1 premiered in London last month, executive producer Tim Burton told ITV News that it was shot in Ireland because of a lack of studio space in London. When a giant like Netflix gets squeezed out because its rivals are taking up all the studio space in London it says a great deal about how attractive its fiscal incentives really are.
Additional reporting by Christian Sylt
Source: https://www.forbes.com/sites/carolinereid/2025/09/17/disney-pockets-22-billion-for-filming-outside-america/
