Report warns Paramount-Warner merger could erase 4,500 jobs in L.A.

A new report says that a planned merger between two of Hollywood's biggest studios — Paramount Skydance and Warner Bros. Discovery — could wipe out around 4,500 jobs in Los Angeles over three years. The deal, worth about $111 billion, was studied by a group called CVL Economics after Los Angeles County officials asked for a closer look. Researchers found that the merger could also mean more than $1.26 billion in lost wages for workers in the entertainment industry.

The report paints a worrying picture for Hollywood workers at a time when L.A.'s film and TV business is already struggling. Since 2022, more than 50,000 entertainment jobs have disappeared in the Los Angeles area. The study warns that the merger would add even more pressure to a job market that is already shrinking fast.

The report was requested by L.A. County Supervisor Lindsey Horvath. It found that more than 15,000 corporate jobs at both companies could be at risk if the deal goes through. About 2,495 of those jobs are based right here in Los Angeles County.

When two big companies merge, they often do the same kinds of work in duplicate. Paramount and Warner Bros. both run cable channels, movie and TV studios, streaming services, and departments like marketing and advertising. Combining those overlapping teams usually means laying off workers who are doing the same job twice.

The deal could hurt more than just office workers. Behind-the-scenes crew members, post-production editors, vendors, and small businesses that serve film and TV productions could all feel the impact. The report said those effects could also be substantial.

California's top lawyer, Attorney General Rob Bonta, is leading a group of 12 states that want to block the merger. They argue it would break antitrust laws — rules meant to stop any one company from gaining too much power. A court trial is set to begin on March 2.

The states say the merged company would control 86% of movies released widely in theaters, which would give it enormous power over the film industry. If only four studios — a combined Paramount-Warner, Disney, NBCUniversal, and Sony Pictures — control that much of the market, there would be less competition. Less competition can mean fewer choices and higher prices for audiences.

Paramount disagrees strongly with this view. The company says the report actually proves why the merger is needed, pointing to the industry's troubles as a reason to act. Paramount promises to invest $30 billion every year in new productions and release at least 30 movies annually, which it says will create more jobs over time.

However, the report raises a red flag about debt. To complete the deal, Paramount would take on nearly $82 billion in debt. In just one recent quarter, the two companies together spent more on interest payments than they earned in operating income, meaning they were paying more to support their debt than they were making in profit.

The study also found that the two studios' films employ a lot of people compared to the average movie. Warner Bros. and Paramount theatrical releases carry 2.74 times as many screen credits as the average film. That means when these studios cut back, the ripple effect on jobs is much bigger than it would be for smaller studios.

Beyond job losses, the report estimated that the merger could eliminate $547 million in tax revenue, including $78.6 million in local taxes. Those funds help pay for schools, roads, and other public services in Los Angeles. The deal could therefore affect everyday residents, not just Hollywood insiders.

David Ellison, the businessman leading the Paramount Skydance side of the deal, wants to wrap things up as quickly as possible. His plan is to bring CNN, HBO, TBS, Food Network, and the Warner Bros. studios under the Paramount umbrella. If the merger succeeds, the new combined company would own more than 50 cable channels, including MTV, BET, HGTV, Comedy Central, and Animal Planet.