The proposed $111 billion merger between Paramount Skydance and Warner Bros. Discovery could put thousands of jobs and billions of dollars at risk in Los Angeles, according to a new economic report.
A study by CVL Economics for the Los Angeles County Department of Economic Opportunity calculates that the deal could threaten 4,495 years of direct film and television employment between 2027 and 2030. When indirect roles and service providers are included, the figure rises to 10,360 years of employment.
The economic impact would include a $1.26 billion drop in labor income, $2.79 billion in added value and $4.06 billion less in economic production. The report also estimates that $547 million in tax revenue is at risk, including $78.6 million in local taxes.
Paramount and Warner currently hold deals with about 895 creators. The report warns that combining the two production and distribution groups would reduce the number of buyers capable of approving new projects and limit opportunities for film crews.
California film industry
The warning comes as the California audiovisual sector faces existing challenges. Los Angeles ended 2025 with an average of 93,263 film jobs, which is 35.7 percent lower than in 2022. Establishments linked to the sector have also fallen 12.3 percent from their peak in 2021.
Globally, the merged company would face high debt and plans to save more than $6 billion a year. The CVL Economics report estimates this could put between 9,000 and 14,900 years of corporate employment at risk worldwide.
The study notes that following the purchase of Fox by Disney, production at the acquired studios fell by 64.9 percent. The report says this precedent does not guarantee what will happen with Paramount and Warner, but shows the potential effect of consolidating large studios.
Antitrust trial scheduled
In the United States, Judge Araceli Martinez Olguin has scheduled an antitrust trial to begin on March 2, 2027, and run until March 19, with a preliminary hearing set for February 24.
The timeline is a setback for Paramount Skydance, which wanted the process to begin in November. A group of 12 state attorneys general, led by California Attorney General Rob Bonta, and the Writers Guild of America had asked for an April 2027 start.
The delay carries financial penalties. Starting October 1, Paramount will owe Warner Bros. Discovery shareholders $7 million a day until the transaction is completed. The payments could reach around $1.2 billion if the trial ends on its scheduled date.
Paramount has asked the court to change the order blocking the merger and requested that the plaintiffs deposit a bond of $1,884,726,092.73 before September 30, 2026. The company says the delay is generating million dollar costs.
The plaintiffs and the Writers Guild of America argue the acquisition will reduce competition, cause layoffs and increase consumer prices. Paramount says the merger will strengthen its ability to compete with platforms like Netflix and Disney, benefiting both workers and consumers.
Alternative production sites
Advisors to David Ellison, the head of Skydance, have described the regulatory climate in California as inhospitable and warned that blocking the deal could speed up the group leaving the state.
Paramount has already leased about 28,000 square meters of studio space in Bayonne, New Jersey. Texas is also being considered due to lower costs and the presence of Oracle, the company run by David Ellison's father, Larry Ellison.
The United Kingdom is another alternative. The Leavesden studio complex has a capacity close to Burbank in California, with net real estate costs about 40 percent lower, alongside filming incentives.
United Kingdom approval
While the deal is paused in the US, the UK has approved the acquisition. The Competition and Markets Authority found the merger poses no competition issues requiring action, and Culture Secretary Lisa Nandy ruled out intervening.
During the process, Paramount increased its commitments regarding news, programming and audiovisual offerings in the British market.
David Ellison had been lobbying politicians, regulators and industry representatives in the UK since January. The campaign argued the merger would allow traditional studios to compete against platforms including Netflix, Amazon, Disney, Universal and the BBC.
Tim Richards, the chief executive of the Vue cinema chain, called the regulatory decision an important milestone. Sir Peter Bazalgette, a government advisor and former ITV chairman, said the consolidation was necessary for the creative industries. Media analyst Mark Oliver also said the deal presents few threats to UK competition.
