Paramount Deal Fight Could Cost California $21 Billion and 58,000 Jobs, Report Claims

California stands to lose approximately $21 billion and nearly 58,000 jobs if Paramount Pictures follows through on its threat to leave the state, according to a report by the LA County Economic Development Corporation’s Institute for Applied Economics. This potential exodus is linked to Attorney General Rob Bonta's antitrust lawsuit aimed at blocking Paramount's proposed merger with Warner Bros. Discovery.

Paramount has indicated it will relocate if Bonta and other attorneys general do not drop the lawsuit. The departure of a major studio could further damage Hollywood's already shrinking employment base, which has seen over 40,000 jobs — 30% of its peak — disappear in recent years. Experts warn that such a move would send a negative signal about California's status as the global entertainment capital, potentially deterring future investment.

The report criticizes Bonta's actions, suggesting his motivation is rooted in partisan politics rather than consumer protection. It draws a parallel to Bonta's support for a lawsuit against the JetBlue-Spirit airline merger, which ultimately failed, resulting in less choice for passengers. The article posits that Democrats, including Bonta, are concerned about potential shifts in the political leaning of news outlets like CBS News under new ownership following the merger.

The author argues that Bonta's legal challenge places tens of thousands of jobs, including union positions, at risk during a vulnerable period for the film industry. While acknowledging the complexity of revitalizing Hollywood, the piece emphasizes the need to avoid exacerbating the industry's challenges.

Paramount is described as playing hardball, but also as a business operating in an increasingly challenging environment in California. The report notes that while Governor Gavin Newsom highlights the state's economic strength, this is significantly bolstered by the AI boom, and the entertainment sector's stability is not guaranteed. The article references the oil industry's historical migration from California as an example of economic shifts.

Judicial intervention has mandated that state officials engage in two days of talks with Paramount next month. The report urges Bonta to prioritize a resolution over political considerations during these discussions.