Less than a month before the start of Nevada’s legislative session where lawmakers are expected to consider a massive expansion of Nevada’s film tax credit program, a partnership between key proponents Warner Bros. Discovery and Birtcher Development has dissolved.

It’s not yet clear what the dissolution of the partnership, which was confirmed to The Nevada Independent by sources close to the deal, means for the prospects of a major expansion of Southern Nevada’s film industry or how it ties into other ongoing efforts to expand Nevada’s film tax credit program, which is currently capped at $10 million a year. 

Birtcher had announced the partnership with Warner Bros. in August, with the studio pledging to invest $8.5 billion in the state over 17 years contingent on lawmakers expanding the film tax credit program.

Sources close to the deal said Warner Bros. is assessing potential new partners but is still pursuing a deal in Nevada.

Reached for comment, a Warner Bros. spokesperson did not offer any details but said the studio is “committed to creating Warner Bros. Studios Nevada, and excited about the opportunity to bring great jobs, workforce and economic development, and educational opportunities to the state.”

A representative from Birtcher Development did not immediately respond to a request for comment.

The pitch for more film tax credits stems from a proposal brought by Sen. Roberta Lange (D-Las Vegas) in 2023 that would have vastly expanded the state’s film tax credit program. The measure did not pass out of either legislative chamber. 

Proponents of that bill included Sony Pictures, Birtcher, an unnamed studio partner and Howard Hughes Corp. — the developer behind the Summerlin community in the Las Vegas Valley. Howard Hughes Corp. and Sony pushed for a studio project in Summerlin, while Birtcher and UNLV advocated for a film industry training center through the university and a broader studio campus.

After the bill failed to move forward, the entities split, with Sony and Hughes working on a proposal with Assemblywoman Sandra Jauregui (D-Las Vegas) and Birtcher staying with Lange. 

Jauregui and Lange each announced intentions during the summer to bring film tax credit expansion bills. Both efforts also seek to establish a Las Vegas-based production studio and workforce training program. 

Jauregui said her proposed bill would create about 20,000 construction jobs and 15,000 annual jobs and have an annual economic impact of $2.85 billion.

Warner Bros. released an economic impact report on the proposed film tax credit expansion in October, projecting the potential for 16,000 high-wage jobs and a $13.5 billion return to Nevada’s economy over 15 years. 

Most economists downplay the economic benefits of film tax credits.

Under Nevada’s current film tax credit program, credits are capped at $10 million per year and a maximum of $6 million per production, and the amount of credits issued for production is primarily based on a percentage of wages and qualified production costs that companies pay out for Nevada-based projects.

The tax credits can offset a company’s tax liability, reducing taxes owed by the amount of the credits. In 2023, the proposed credits could be applied to the Modified Business Tax (a payroll tax), insurance premium tax or gaming license fees. The credits are transferable, meaning a company can sell them for cash.

This is a developing story and will be updated as more information becomes available.