California could suffer a devastating economic blow if Paramount carries out its threat to leave the state amid California Attorney General Rob Bonta’s challenge to its planned Warner Bros. Discovery acquisition. New projections warn that the fallout could include nearly 58,000 lost jobs and more than $21 billion in lost annual economic output. The same analysis predicts that California would receive substantial economic benefits if the merger proceeds and Paramount fulfills its promised production commitments.
The situation hinges on Paramount chief David Ellison’s threat to relocate the entertainment giant if the multistate antitrust lawsuit led by Bonta succeeds in blocking the Warner Bros. Discovery deal. Tennessee was identified as one possible destination for the company’s operations. Such a move would pull studio activity, production spending, vendor contracts, and employee spending out of California as the state struggles to keep film and television projects from moving to cheaper locations.
Bonta’s opposition to the acquisition has placed California’s government in a high-stakes confrontation with one of Hollywood’s largest companies. Industry groups, particularly the Writers Guild of America, have also opposed the merger. Ellison, however, has promised that the combined company would release 30 theatrical movies annually for three years, potentially increasing film production and creating additional work throughout Hollywood.
The Paramount-commissioned study was conducted by the Los Angeles County Economic Development Corporation’s Institute for Applied Economics and examined how the company’s departure could affect California industries beyond film and television production. As Breitbart News reported, the study projected that the state could lose between 28,990 and 57,980 full-time jobs if Paramount relocates to a state such as Tennessee. Estimated annual economic-output losses ranged from $10.6 billion to $21.2 billion, depending on how much of the company’s activity leaves California.
Those job losses would extend far beyond actors, directors, writers, and studio employees. The study accounted for “direct, indirect and induced jobs,” including employment connected to Paramount’s supply chains and businesses supported by household spending. Restaurants, transportation companies, construction contractors, equipment providers, hotels, and other businesses could all feel the effects of a departure even if they have no direct connection to producing movies.
Researchers also examined what could happen if Paramount completes the acquisition and follows through on Ellison’s pledge to release 30 movies in theaters each year for three years. That scenario could create between 1,020 and 2,760 job-years across California industries. It could also generate between $377.7 million and $1.01 billion in total economic output through September 30, 2031, providing the state with new jobs and economic activity instead of the enormous annual losses projected under a relocation.
The report included several caveats, particularly the possibility that Paramount could reach a settlement with Bonta and the other state attorneys general seeking to block the merger. Production guarantees or other commitments resulting from a settlement could change the final estimates. Under the current circumstances, however, the analysis found that Paramount’s promised production schedule could produce major economic benefits while even the most limited relocation scenario would inflict an absolutely devastating cost.
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Several prominent Hollywood figures have publicly supported the merger despite the resistance from Bonta and the WGA. Those supporters include filmmaker James Cameron and actor Tom Cruise, whose blockbuster “Top Gun: Maverick” was released by Paramount. Cruise called Hollywood “a community” and described the people working at its studios as “my family,” arguing that Paramount’s 30 promised releases would create opportunities across the business. He added that the 30 movies could eventually become 40, empowering directors and other artists to make the “films that they want.”
Watch Hercules star Kevin Sorbo describe why he’s leaving California for good here: