Sunita Somvanshi
A leaked report from the Los Angeles County Economic Development Corporation is drawing sharp attention to what could happen if Paramount Pictures moves out of California—a possibility that looms as state attorneys general pursue an antitrust lawsuit to block David Ellison’s $111 billion merger with Warner Bros Discovery.
The document, made public on September 10, lays out the economic toll in stark numbers. If Paramount relocates its headquarters and operations out of California, the state would lose between 2,750 and 5,550 job-years across all industries. That translates to roughly $1.01 billion to $2.03 billion in lost economic output between October 2026 and September 2031.
To understand the stakes: a “job-year” means one full-time job for one year. So 5,550 job-years could mean 1,100 people working for five years, or another combination. The numbers reflect not just direct Paramount employees but the ripple effects through the local economy—suppliers, vendors, restaurants, and other businesses that depend on film industry spending.
The merger has triggered legal action from a coalition of state attorneys general who argue that combining the two studios creates problematic market concentration. Paramount executives, facing regulatory pressure, have publicly discussed the possibility of leaving California if the merger clears.
But there is a countervailing argument. Director Joseph Kahn wrote a column in The Hollywood Reporter suggesting that Paramount’s real assets are not tied to California at all. The soundstages and facilities matter less than the intellectual property. Kahn pointed out that the combined Paramount-Warner property holdings are worth $1.67 billion, while their top 10 franchises have grossed $150 billion. With IP that valuable, a merged studio could operate anywhere and remain highly profitable. Moving physical operations out of L.A. would be administratively possible and, in Kahn’s view, survivable for the company.
This debate reflects a deeper shift in Hollywood. The industry’s anchor has always been its infrastructure—the studios, backlots, and skilled workforce concentrated in Los Angeles for over a century. But as digital production, virtual effects, and global talent networks have become central to filmmaking, the geographic imperative has weakened. Other states and countries have recruited productions with tax incentives, and California’s high costs have pushed some work elsewhere.
What remains unclear is whether Ellison, who acquired Paramount in 2023, would actually pursue relocation or merely use it as leverage in regulatory negotiations. The company has not formally announced any such plans. The antitrust case is ongoing, and merger approval is not assured.
For California policymakers, the report serves as a warning. For workers and vendors in the LA entertainment ecosystem, it is a reminder of how concentrated their economic fortunes are in a single industry and a handful of companies.
