A new economic study warns that Los Angeles and California stand to lose tens of thousands of jobs and billions of dollars in annual revenue if Paramount follows through on threats to relocate out of state, a move tied to Paramount head David Ellison’s response to California Attorney General Rob Bonta’s lawsuit seeking to block the studio’s acquisition of Warner Bros.
The study, conducted by the Los Angeles County Economic Development Corporation, found that if Paramount moved to a state such as Tennessee, California could lose between 28,990 and 57,980 full-time jobs statewide across multiple industries. Annual revenue losses were estimated at between $10.6 billion and $21.2 billion.
“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 said. “Consequently, the job losses pertain to all California industries rather than solely to motion picture and television production.”
The report also modeled a very different scenario: what happens if the Warner Bros. merger goes forward and Paramount keeps its pledge to release 30 films in theaters each year. In that case, the study found the company could generate between 1,020 and 2,760 jobs across California industries, along with between $377.7 million and $1.01 billion in economic activity.
Researchers cautioned that any settlement reached between Paramount and the state attorneys general suing to stop the merger could change the underlying numbers. Even so, the study concluded that “Paramount’s post-merger production commitments could produce large economic benefits to California’s economy,” while “the best case scenario for relocation poses economic costs of a similar magnitude.”
Industry reaction divided
Bonta’s lawsuit against the merger has drawn support from industry groups, including the Writers Guild of America. But several prominent Hollywood figures have backed the deal, among them director James Cameron and actor Tom Cruise.
“I think it’s awesome,” Cruise said. “You know, here’s the thing. They’re going to deliver 30 movies. It’s a community to me. It’s not an industry. The people in these studios are not just people in the studios. They’re my family. I know we’re going to get those 30 movies. I want us all to come together as a community to help make those 30 movies. It’s not just going to be, you know, Paramount doing it. Everyone’s going to need all the help of every artist to be able to do it.”
Cruise, who starred in Paramount’s Top Gun: Maverick, said the promised 30 movies could grow to 40, which he argued would give artists and directors more freedom to make “films that they want.”
