Paramount-Warner Bros. Merger Will Threaten $2.78B in Economic Value

Key Points:

• A report from the L.A. Department of Economic Opportunity and CVL Economics warns that Paramount's proposed $111 billion merger with Warner Bros. Discovery could jeopardize thousands of jobs across corporate, creative, and production sectors, with 4,500 direct job-years at risk.
• Indirect and induced job losses could add up to 5,865 job-years, impacting small businesses and unrelated local retailers, while the merger might lead to $1.26 billion in lost wages, $2.78 billion in lost economic value, and a $547 million reduction in tax revenue.
• The report highlights that the entertainment industry in L.A. County is already struggling due to the pandemic, strikes, and fewer projects, with a 36% decline in motion picture jobs projected by 2025, and warns that consolidation could further reduce production and job opportunities.
• Paramount Skydance plans to invest $30 billion annually and produce at least 30 films a year post-merger, but the report questions where these would be made, noting the potential for production to shift to Warner Bros.' U.K. campus due to cost advantages.
• The merger faces significant opposition from creatives, labor unions, and some industry groups concerned about job losses and reduced output, while some executives support the deal; an ongoing antitrust lawsuit and costly delays complicate the merger timeline.