The Economic Impact of Filming Yellowstone in Montana

Film industry activity has grown significantly in Montana in recent years. Since the enactment of the Montana Economic Development Industry Advancement (MEDIA) Act on July 1, 2019, there has been a 70% increase in content production from 10 years ago. Despite that increase, the footprint of the industry remains modest, and knowledge of the scope and nature of its activities is limited. Certainly, we are all consumers of the output of the film and entertainment industries, but awareness of what takes place to produce that content is not common in our state.

A recently conducted Bureau of Business and Economic Research (BBER) study attempted to address that situation. By examining the actual activities of a major television production carried out in the Bitterroot Valley, we not only can learn how those activities combine to make the Montana economy larger and more prosperous. We also achieve a better understanding of what a major production like the television show Yellowstone entails and why its presence within the state makes such significant economic contributions.

The television show Yellowstone is a dramatic series set on a fictional ranch in Montana that premiered in 2018 on the Paramount Network. Starring Oscar winner Kevin Costner, the concluding episode of Season 4 of the series drew an estimated 9.3 million viewers, becoming the number one rated series of 2021 across broadcast, cable and premium outlets. Originally filmed in Utah, the production relocated to Montana in 2019.

As part of a contracted research study, the BBER was provided the full financial information associated with the filming and production activities that took place in Montana over five months between October 2020 and February 2021. Using the BBER’s policy analysis model, we were able to address the research question: What changes in the state economy – in terms of jobs, income, sales and government revenues – have occurred because of the presence of this specific production?

State Incentives and the Film Industry
While today’s film and entertainment industry remains highly concentrated in southern California, the growth in movie, television and other entertainment production in states with little previous connection with the industry has grown over the last two decades. States distant from Hollywood, such as Georgia, Louisiana and Illinois, have developed significant footprints in the industry. Some of those states have continued to provide funding for tax credits at a considerably higher level than Montana.

Montana has also experienced growth in television and film in the last 10 years, with 122 productions in 2019 (Econsult Solutions, Inc., 2020). Many of those were smaller scale productions, such as one-time commercials, documentaries, single television episodes and independent features.

The spinoff of production activity to other states has been unquestionably affected by the implementation of tax credits and other incentives that are aimed at attracting film production with measures that reduce production costs. More than 30 states, including Montana, currently offer some form of tax credit, often transferrable, to studios in return for locating activities within their states (Nguyen, 2021). The public debate over the effectiveness and desirability of these policies has brought greater attention to the connection between film production and state-level economic activity. That was the motivation for the BBER study of Yellowstone.

When a film production takes place in Montana or any other state, there are at least three mechanisms at work that ultimately affect the size of the economy.

The first and most basic is the propagation of the spending, wages and production activities that occur as part of the activity itself. Like any business, the film industry pays wages to workers, remits payments to vendors, suppliers and consultants and pays taxes to governments in Montana. Those people, businesses and governments receive this spending as income and, in turn, pay out a portion of it to other Montana workers, businesses and governments, and through this process the economy, as a whole, rises to a new level of activity.

Over time, the rest of the economy can be expected to respond to the new opportunities offered by the presence of new demands for products and services from the film industry. As Montana sources for specialized goods and services the industry uses are developed, a higher proportion of film industry spending is captured within the state. This indirect, new investment represents a different source of growth resulting from film production, both through the investment itself and the larger slice of production activity spending that is directed to Montana businesses.

A third mechanism is the product itself – the visual depiction of our state that increases exposure and awareness of our physical landscape, culture and history to audiences that are potentially global. While it is difficult to quantify, the image of Montana that is projected to mass audiences through film production is arguably important in selling the state as a place to visit or even relocate. It is also likely that the production activities themselves attract visitors and thus generate additional spending.

Findings of the Study of Yellowstone Season 4
Our basic finding is that the filming of the fourth season of the television show Yellowstone in the Bitterroot Valley of Montana has resulted in significant gains for the state economy that extend beyond those receiving the wages and other spending of the production itself. Specifically, we find that because of the Yellowstone production in our state that:

  • There are 527 permanent jobs in the state that would not have existed otherwise, not including the 624 Montana residents who were employed during the filming as extras.
  • Montana households received an additional $25.3 million in annual income, of which $24.6 million was after-tax.
  • Montana businesses and non-business organizations realized $85.8 million in additional gross receipts.
  • Annual revenues of state government were higher by $10.6 million.
  • The population of our state grew by 233 people, an increase that is almost totally composed of working-aged people and their families.

These economic impacts pertain to the year 2021 and can be expected to persist (and even grow, as we detail in the report) as those activities are continued in future years. These gains to the economy include the jobs and income of the production itself, but also include the effects of that direct spending on the broad spectrum of economic activity in the state.

Inside the Numbers
This was not a study of the economic contribution of the entire film industry in the state, nor is it a study of the net benefits of the film industry tax credit that the state of Montana makes available as a means of incentivizing activities that take place here. But these findings can inform both of those questions.

By examining a single season of a single production in full detail, we are able to accurately and definitively trace all of the spending associated with the overall project, and thus fully account for how those who receive that spending benefit – and, in turn, re-spend a portion of what they receive in the state economy. While acknowledging that not all productions have the same spending profile, this level of detail removes the need to make assumptions about all productions that might be necessitated by an industry-wide approach.

From an economic perspective, the filming of Yellowstone Season 4 over the five-month period October 2020 – February 2021 employed 116 Montana residents, each of whom worked an average of 11 40-hour weeks. These jobs varied, but many involved highly skilled occupations, as is reflected in the average wage of $66.65 per hour those jobs paid. Those figures do not reflect the 624 Montana-based workers who were employed as extras, typically for a few days.

The total amount of spending that occurred in Montana that qualified for the Montana Film Tax Credit was $72 million. The detail on that spending, particularly on the $15.3 million spent on Montana-based products and services such as hotels, rental cars, lumber, catering, and animal services, underscores the magnitude of economic activity associated with the filming. This is particularly so for Ravalli, Missoula, and Lewis and Clark County area where most activity took place.

This study was a unique opportunity to apply an economic lens to a highly visible, highly popular entertainment production activity that continues to take place in Montana. Using the detailed financial data on the spending that took place within the state during the five months of filming, and an economic model that helps us understand how that spending interacts with other pieces of the state economy, the finding that more than 500 jobs and more than $25 million of annual personal income are added to the state economy because of the production gives some quantification of what these activities mean for the overall economy.

This spring, Yellowstone began filming Season 5 in Montana.

Econsult Solutions, Inc., 2020. The Economic Impact of Montana Film Production. Philadelphia: ESI.

Nguyen, 2021. Film, TV Studios Are Offered Incentives From States After Pandemic Shutdowns. Wall Street Journal.

Photo provided courtesy of Paramount Network.