The Economic Impact of Paramount Skydance in California

A $77 billion merger. The future of Hollywood production. Billions of dollars in economic activity potentially at stake.

As California’s entertainment industry navigates a period of significant change, one of Hollywood’s largest corporate transactions is raising important questions about the future of film production, jobs, investment and economic competitiveness.

Following the February 2026 merger agreement between Paramount Skydance Corporation and Warner Bros. Discovery, Paramount commissioned LAEDC’s Institute for Applied Economics (IAE) to examine the potential economic and fiscal consequences for California.

The study evaluates two critical scenarios: the economic impact of additional feature film production under Paramount‘s production commitment, and the potential losses California could face if Paramount‘s headquarters and other operations were relocated out of state without a settlement.

Using industry data and economic modeling, LAEDC examined the potential impacts over five years, from October 2026 through September 2031, while providing broader context on the challenges facing California’s entertainment industry.

Why it matters: Hollywood’s economic footprint extends far beyond the studio gates. Decisions about production and corporate investment have implications for workers, businesses, suppliers and communities throughout California.

LAEDC’s research brings economic intelligence to a consequential industry discussion, helping decision-makers understand the potential stakes for California’s economic future.