Paramount’s potential exit from California could cost the state up to 58,000 jobs and $21.2 billion annually in economic output, according to a leaked report from the Los Angeles Economic Development Corporation. The threat, tied to a stalled $111 billion merger with Warner Bros. Discovery, has sparked a legal battle with California’s attorney general and raised alarms across the entertainment industry.
The leaked report, commissioned by Paramount and published by Politico, outlines stark consequences if the studio follows through on its threat. At minimum, the state would face 2,750 to 5,550 job-years in losses across all industries and between $1.01 billion and $2.03 billion in economic output between October 1, 2026, and September 30, 2031. If the move is complete, the permanent loss could reach 28,990 to 57,980 full-time jobs and between $10.6 billion and $21.2 billion annually in economic output, according to the study.
The Leaked Report: A Dire Forecast for California
The report, dated September 10, 2026, was commissioned by Paramount Skydance and leaked to Politico. It paints a grim picture of the economic fallout should the studio fully relocate. Once Paramount completed the entire relocation of its headquarters and other operations out of California, the state would experience the permanent loss of approximately 28,990 to 57,980 full-time jobs statewide across all industries,
the document states. The economic output losses would include ripple effects through supply chains and household spending, affecting sectors beyond film and television.
The study also highlights the potential for job creation if Paramount honors its post-merger commitment to produce 30 films annually. This could generate between 1,020 and 2,760 job-years in California, with economic output between $377.7 million and $1.01 billion between October 1, 2026, and September 30, 2031. However, the report cautions that these benefits are contingent on a settlement with California’s attorney general, Rob Bonta, who has refused to negotiate until Paramount halts “lying leaks” about their discussions.
Legal Battle and the Ticking Fee
Paramount’s threat to leave California is tied to its $111 billion merger with Warner Bros. Discovery, which is facing antitrust challenges from a coalition of 12 states and the Writers Guild of America (WGA). California Attorney General Rob Bonta has refused to settle the lawsuit unless Paramount halts what he calls “lies and leaks” about their negotiations. The dispute has escalated to a trial scheduled for March 2, 2027, with a critical deadline looming on October 1, 2026.
On that date, Paramount will begin paying a “ticking fee” of $7 million per day to Warner Bros. Discovery shareholders if the merger does not close. The company has requested a $1.88 billion bond to cover these costs, but a federal judge, Araceli Martinez-Olguin, will decide on September 24, 2026, whether to approve it. The bond request underscores the financial stakes for Paramount, which faces a potential $1.3 billion liability if the deal collapses.
Industry Outcry and the Risk of Infrastructure Loss
Paramount’s relocation threat has drawn widespread concern across the entertainment industry. The report warns that converting Warner Bros. soundstages to commercial or residential use would permanently strip California of production infrastructure that took a century to build.
This includes facilities supporting crews, vendors, and post-production services, which are critical to the state’s film and TV ecosystem.
The report also notes that California remains the fourth-largest economy in the world, with a GDP of $4.1 trillion to $4.4 trillion, making the potential losses even more significant.
The Human Cost: Job Losses and Industry Strain
The job losses would not be limited to the film industry.
The new report quantifies just how much California stands to lose,
said The Hollywood Reporter, which cited the study. The document also highlights the risk of reduced production and higher costs for the merged entity, which could lead to fewer films and a weakened competitive position in the global market.
What Comes Next: October 1 and Beyond
The immediate next step is October 1, 2026, when the $7 million-per-day ticking fee kicks in. Paramount and California’s attorney general are set to meet for two days at the end of October, but the outcome remains uncertain. If no settlement is reached, the studio could begin its relocation to Georgia, Tennessee, or Texas, triggering the full economic impact outlined in the report.
