If Paramount makes good on its threat to relocate out of California, the results would be devastating for the state and the entertainment industry, a leaked economic impact study finds.
According to a study conducted by the Los Angeles County Economic Development Corporation dated Sept. 10 (and leaked by Politico), once Paramount completed the entire relocation out of state, California would experience the permanent loss of approximately 28,990 to 57,980 full-time jobs statewide across all industries, and losses of between $10.6 billion and $21.2 billion annually in economic output.
At minimum, the relocation would result in losses of 2,750 and 5,550 job-years in California across all industries and losses of between $1.01 billion and $2.03 billion in economic output between October 1, 2026, and September 30, 2031, according to the study.
“It should be emphasized that these estimated job losses include direct, indirect, and induced jobs, capturing the ripple effects through Paramount’s supply chains in California as well as the economic activity of household spending,” the study says. “Consequently, the job losses pertain to all California industries rather than solely to motion picture and television production.”
Additionally, the study finds that if Paramount holds to its promise to release 30 films a year after its Warner Bros. Discovery acquisition, it would generate a total of between 1,020 and 2,760 jobs in California across all industries and between $377.7 million and $1.01 billion in economic output between October 1, 2026, and September 30, 2031.
A representative for Paramount did not immediately respond to TheWrap’s request for comment.
The study comes with several caveats, including that any commitments that could come out of a potential settlement with the state AGs suing to block the merger might change the data.
However, as-is the study says its analysis “indicates that Paramount’s post-merger production commitments could produce large economic benefits to California’s economy. It also shows that the best case scenario for relocation poses economic costs of a similar magnitude.”
In August, word leaked that Paramount Skydance CEO David Ellison held an hourlong lunch meeting on the Paramount lot with his 12-member executive leadership team, in which he insisted his goal was to keep the company’s 30,000 jobs in Southern California but cautioned that if Bonta won’t negotiate a settlement by the time the company’s $7 million per day ticking fee kicks in, he will be moving standalone Paramount or the combined Paramount-WBD out of state regardless of the outcome.
The ticking fee begins on Oct. 1, but Paramount has requested that the states and WGA post a $1.9 billion bond to cover the ticking fee and other financing costs during the delay. A judge will make a decision on whether to impose the bond during a hearing on Sept. 24.
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