Warner Bros. Discovery has announced a partnership with Howard Hughes Holdings and Sony Pictures Entertainment in the effort to vastly expand Nevada’s film tax credit program.

The joint venture announced Wednesday hinges on the passage of AB238, a bill sponsored by Assm. Sandra Jauregui (D-Las Vegas) that seeks to bolster the state's film tax credit allocation from $10 million to $105 million annually. It comes ahead of the bill’s first scheduled hearing Thursday afternoon.

“We are the entertainment capital of the world, and there is no better example of that than this partnership between two of the world's major film and television studios,” Jauregui said in a press release. 

Though similar partnerships have taken place in California, sources familiar with the matter said the announcement is a sign of a new potential trend of companies recognizing states are offering a limited number of incentives and partnering to take advantage of them. 

The announcement marks a consolidation of strength behind Jauregui’s bill as two rival film tax credit proposals undergo the legislative process (read about the differences here). Birtcher Development, which had proposed a similar expansion in 2023, is working with Sen. Roberta Lange (D-Las Vegas) on a similar proposal (SB220) to make $83 million in annual transferable tax credits available for productions at a yet-to-be-built studio in Southern Nevada at the Harry Reid Research and Technology Park. Manhattan Beach Studios Group is also working with Lange.

Warner Bros. previously had a partnership with Birtcher Development, which ended in January. If the bill passes, Nevada would be the third production hub for the company — which currently has one in London and one in Burbank.

As proposed, Jauregui's legislation would earmark up to $80 million in annual transferable tax credits for productions at a studio supported by Warner Bros. and Sony, as well as increase the state’s existing $10 million annual transferable tax credits for film productions to $25 million — a pot of money that would be available to all other productions. The funding would sunset in 15 years.

The announcement comes as California proposes to more than double its film tax credit program to $750 million in annual credits, seeking to retain its dominance in film production even as other states have gained more of a foothold with the industry.

If the Nevada legislation passes, the press release said the partners would develop a 31-acre production facility on a planned 100-acre mixed-use development in Las Vegas’ Summerlin community. As part of that development, proponents said an adjoining mixed-use commercial village would create tens of thousands of new Nevada jobs and an annual economic impact of more than $3 billion — though no study was linked to the promise. Most independent studies of states that have expanded film tax credits have found sparse evidence of their effect on the economy.

The press release noted that Summerlin Studios will initially feature multiple stages and related buildings, capabilities and infrastructure that Warner Bros. Discovery and Sony Picture will use for “hundreds of millions of dollars in combined content spend each year” throughout the program's life. 

Under Jauregui’s bill, the transferable tax credits for the Summerlin Studios would become available July 1, 2028. To receive the tax credits, construction on the studio infrastructure would need to finish by the time tax credits are earned, and the partners have invested at least $400 million into the project. 

Though the legislation does not mention Sony or Warner Bros., the press release noted that an amendment is expected to reflect the details of the newly announced partnership.

Howard Hughes CEO David O’Reilly described the partnership as “game changing” and said the proposal would create new high-paying jobs to diversify the state’s economy.

“We are approaching this legislative session convinced now more than ever that expanding to Nevada provides us with our ideal third production hub,” said Simon Robinson, chief operating officer of Warner Bros.