LA County Warns of Devastating Economic Impact of Warner Bros

The city of Los Angeles is sounding the alarm on the potential economic impact of a massive merger between Warner Bros. Discovery and Paramount Skydance.

Counting the Costs

A new report from the Los Angeles Department of Economic Opportunity and CVL Economics estimates that thousands of jobs are at risk as a result of the $111 billion deal, with 2,661 job-years indirectly estimated to be impacted.

The study also projects significant lost wages, economic value, and business output, totaling $1.26 billion in lost wages, $2.78 billion in lost economic value, and $4.06 billion in lost business output.

A Potential Blow to the Entertainment Industry

The merger could exacerbate an already struggling entertainment industry in Los Angeles County, with the average number of motion picture jobs reaching a nadir in 2025 at 93,263, down nearly 36 percent from 2022.

California has lost 52,016 entertainment jobs since 2022, with more than 99 percent of that total coming from Los Angeles County.

Cutting Costs to Stay Afloat

The report suggests that a combined WarnerMount would need to undergo significant cost-cutting to deal with its net interest expenses and debt, including a $547 million dip in overall tax revenue.

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Paramount Skydance management has already identified about $6 billion in synergies expected to come primarily from corporate in-house roles, streaming technology, cloud systems, procurement, and real estate.

A Changing Landscape for Creators

The merger could also lead to a decrease in output, with the two companies handling around 25.7 percent of all overall deals.

Warner Bros.' U.K. campus in Leavesden is seen as a potential alternative production location to Los Angeles, with an expansion expected to be completed in 2027 that would bring it close to matching the capabilities of Burbank studio.

A Divided Industry

The deal has sparked heated debate among industry executives, creatives, and labor unions, with some defending the mega-merger and others arguing that it would lead to job losses and decreased output.

California attorney general Rob Bonta has called the merger a 'Hail Mary,' while Paramount Skydance CEO David Ellison has threatened to pull one or both studios out of California if his deal doesn't close.