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Paramount Skydance’s proposed $111-billion takeover of Warner Bros. Discovery could result in 4,500 jobs eliminated in Los Angeles over a three-year period, according to a new report.
Los Angeles County supervisors earlier this year wanted to explore the potential economic impact of David Ellison’s proposed union of two historic Hollywood studios. The report, completed this week by CVL Economics, paints a sobering picture of the potential aftermath of the debt-laden deal, including the prospect of an estimated $1.26 billion in lost wages.
“Los Angeles County’s film and television economy is already undergoing a significant structural contraction,” the report said. “The proposed merger of Warner Bros. Discovery and Paramount Skydance introduces an additional source of risk into that already changing market.”
California Atty. General Rob Bonta is leading a coalition of 12 states attempting to block the merger on antitrust grounds. A trial has been set for March. Paramount and other groups, including cinema chain owners and some Hollywood unions, have agitated for a settlement to curtail months of uncertainty over whether the deal will go through.
The proposed merger has been controversial in Hollywood due to fears of widespread layoffs. The Writers Guild of America has brought its own lawsuit to thwart the deal.
The goal of the county’s report was to provide “a comprehensive assessment of the merger’s production workforce implications,” amid the ongoing decline of L.A. based film and television production work. Los Angeles has witnessed the elimination of more than 50,000 entertainment jobs since 2022.
Winning a restraining order will be a crucial test for California Atty. Gen. Rob Bonta and his group. Some observers see the states’ efforts as an uphill climb because the U.S. Justice Department last month approved the merger.
The 120-page report, from the county’s Department of Economic Opportunity and Film Office and requested by Supervisor Lindsey Horvath, found that more than 15,000 corporate roles would be at risk, including an estimated 2,495 jobs based in Los Angeles County.
The two companies would have an overlapping workforce within its linear cable channel divisions, film and television studios, streaming operations and corporate functions, including marketing, technology and advertising sales.
“Effects on crews, crafts, post-production personnel, vendors, and production-serving small businesses,” could also be substantial, the report said.
Paramount’s board has approved David Ellison’s contingency plan to move headquarters from Hollywood as early as this fall, according to people familiar with the situation.
Paramount, in a statement, said the report highlighted the industry’s troubles and made a case for the merger.
“LA County’s own economic report underscores what we have been saying all along: our industry is in decline, production is down and jobs are being lost — and lost for good if we don’t act,” Paramount said. “Our plan to invest $30 billion annually in production and release at least 30 films a year.”
