California could face a significant economic blow, losing up to 58,000 jobs and over $21 billion annually, if Paramount Global relocates its headquarters and operations out of the state. This potential exodus is linked to an ongoing antitrust fight over the company's proposed takeover of Warner Bros. Discovery.

A preliminary report from the Los Angeles County Economic Development Corp.’s Institute for Applied Economics, obtained by Politico, outlines the economic consequences of such a move. Paramount has indicated it might move its California operations beginning October 1 if a deal to block its merger is not reached.

The report estimates that a complete relocation could lead to the permanent loss of between 28,990 and 57,980 full-time jobs in California, encompassing direct employment as well as jobs supported by vendors and household spending. The state could also experience an annual loss of economic output ranging from $10.6 billion to $21.2 billion. Additionally, state and local tax revenues could decrease by approximately $585 million to $1.17 billion per year.

These figures represent a worst-case scenario, as Paramount does not publicly disclose its operating expenses or employment figures broken down by state. The analysis assumed that between 30% and 60% of Paramount's approximately $19.7 billion in reported operating expenses for 2025 are tied to its California economic activity.

Even a partial withdrawal from the state could have substantial consequences. If Paramount were to reduce its California spending over five years to offset merger-related costs, the state could lose between 550 and 1,110 job-years annually and between $202.7 million and $405.4 million in yearly economic output.

The threat emerges as Paramount faces pressure to finalize its acquisition of Warner Bros. Discovery. On July 13, a coalition of 12 state attorneys general, led by California Attorney General Rob Bonta, filed a lawsuit to block the merger. They allege that the combination would diminish competition in the markets for wide-release theatrical films, anticipated top-grossing films, and the licensing of basic cable channels.

These states are seeking to permanently halt the merger under the Clayton Act, a federal antitrust law. This action contrasts with the U.S. Department of Justice, which concluded its own investigation in June without legal challenge, determining the transaction was unlikely to harm competition in key media sectors.

Financial pressures are also mounting for Paramount due to the merger agreement's terms. The deal includes escalating payments to Warner Bros. Discovery shareholders if it closes after September 30. The LAEDC report estimates these “ticking fees” could amount to roughly $7 million per day starting October 1.

In an effort to resolve the dispute, Paramount has proposed guaranteeing 30 theatrical releases per year from the combined company. The LAEDC report suggests this commitment could generate between 1,020 and 2,760 job-years in California and between $377.7 million and $1.01 billion in statewide economic output over five years.

Paramount has declined to comment on the report, and inquiries to Bonta's office for comment have been made.