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A newly leaked report estimates that California could lose as many as 58,000 jobs and up to $21 billion annually in economic output if Paramount Skydance follows through on threats to relocate its studio operations out of the state.
Paramount commissioned the report, and the Los Angeles Economic Development Corporation's Institute for Applied Economics prepared it. Politico leaked it Saturday, according to the outlet.
The findings come as Paramount Skydance's $110 billion merger with Warner Bros. Discovery faces a legal challenge from a coalition of state attorneys general, led by California's Rob Bonta, on antitrust grounds.
Paramount has said it may relocate the studio to Georgia, Tennessee or Texas if the lawsuit succeeds in blocking or delaying the deal. This threat has drawn criticism across the entertainment industry.
Negotiations between Paramount Skydance and the attorneys general are ongoing, with an October 1 deadline looming.
If the merger has not closed by that date, a "ticking fee" provision takes effect, requiring Paramount to pay Warner Bros. Discovery shareholders $7 million a day.
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" if Paramount exits.
These figures account for direct, indirect, and induced job losses, reflecting ripple effects across the state's broader economy and not solely the film and television sector.
The report also credits Paramount's post-merger commitment to produce 30 features a year for 3 years, generating an estimated 1,020 to 2,760 job-years in California and between $377.7 million and $1.01 billion in economic output between October 1, 2026, and Sept. 30, 2031.
That works out to between 340 and 920 job-years and between $125.9 million and $337.2 million in annual statewide output over the 3 years.
The report warns that converting Warner Bros.' soundstages to commercial or residential property would permanently remove infrastructure built over a century, along with the vendors, crews and post-production facilities that support it.
California remains the world's fourth-largest economy, with a nominal gross domestic product of approximately $4.1 trillion to $4.4 trillion.
The report outlines two scenarios: a best case in which Paramount gradually reduces its California operations and a worst case in which the company relocates substantially or entirely, resulting in a larger hit to state tax revenues.
U.S. District Judge Araceli Martinez-Olguin has scheduled a Sept. 24 hearing on Paramount's request for a $1.88 billion bond from the 12 states and the Writers Guild of America, which is also suing to block the merger.
Paramount is seeking the bond as security against losses it says it would incur if the deal is not completed before trial.
If the parties do not settle, both sides are expected to proceed toward a trial date in March 2027.
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