A leaked economic report has sharpened the stakes in the escalating fight over the proposed $110 billion Paramount Skydance–Warner Bros. Discovery merger, warning that California could face as many as 58,000 lost jobs and up to $21 billion in annual economic losses if Paramount follows through on its threat to leave the state.
The report, prepared by the Los Angeles Economic Development Corporation’s Institute for Applied Economics and commissioned by Paramount, was leaked Saturday by Politico. It arrives as Paramount-Skydance leadership negotiates with a coalition of state attorneys general seeking to block the merger on antitrust grounds. The group is led by California Attorney General Rob Bonta.
Paramount’s threat to relocate the studio to Georgia, Tennessee or Texas if the lawsuit succeeds has become a central pressure point in the talks, according to the source material, and has already prompted industry uproar. The newly surfaced report attempts to quantify what such a departure could mean for California’s entertainment economy and beyond.
According to the report, California “would experience the permanent loss of approximately 28,990 to 57,980 full-time job-years statewide across all industries, and losses of between $10.6 billion and $21.2 billion annually in economic output.”
Those figures are not limited to film and television jobs. The report’s estimates include direct, indirect and induced employment, meaning they account for the broader ripple effects through Paramount’s California supply chains and household spending tied to the company’s operations. In practical terms, the potential losses described in the report extend across industries connected to the studio’s presence in the state.
The report also outlines a separate, smaller potential upside tied to Paramount’s post-merger production pledge. Paramount’s commitment to produce 30 features a year for three years would generate an estimated 1,020 to 2,760 job-years in California and between $377.7 million and $1.01 billion in economic output between Oct. 1 and Sept. 30, 2031. On an annual basis, that amounts to between 340 and 920 job-years and between $125.9 million and $337.2 million in statewide output each year for three years.
Another major concern flagged in the report involves Warner Bros.’ physical production footprint. If Warner Bros. soundstages were converted to commercial or residential property, the report says California would be “permanently” stripped of infrastructure built over a century. That infrastructure, according to the report, supports vendors, crews and post-production facilities that have grown around it.
The economic warning lands against the backdrop of California’s broader financial scale. The report notes that California remains the world’s fourth-largest global economy, with a nominal gross domestic product of about $4.1 trillion to $4.4 trillion. Even so, the report frames Paramount’s potential exit as a consequential threat to the state’s economy, particularly in terms of tax revenues.
In the report’s best-case scenario, Paramount would slow-walk any departure while reducing its California spending. In the worst-case scenario, the company would “substantially or entirely” relocate to another state.
The merger fight is also moving on a tight clock. If the deal has not closed by Oct. 1, a “ticking fee” begins, requiring payments to Warner Bros. Discovery shareholders of $7 million per day. That looming deadline has added urgency to negotiations between Paramount-Skydance and the state attorneys general.
What Happens Next?
U.S. District Judge Araceli Martinez-Olguin has set a Sept. 24 hearing to consider Paramount’s request for a $1.88 billion bond from the 12 states challenging the deal and the Writers Guild of America, which is also suing to block the merger. Paramount requested the bond as security for losses it says it would incur if the deal is delayed until after trial.
If the parties do not reach a settlement in the ongoing negotiations, the case is headed toward a March 2027 trial date.