Paramount-Warner merger could create 40,000 jobs, report says

A proposed merger between Paramount Global and Warner Bros. Discovery could create thousands of jobs and inject nearly $1 billion annually into Hollywood movie production, a new report from the California Policy Center found.The report looked at Paramount-Skydance CEO David Ellison's pledge to have Paramount Pictures and Warner Bros. each produce 15 movies per year after the merger, for a combined total of 30 films annually.That would be a 50% increase from the studios' combined recent output and a 14% increase in production among the five major Hollywood studios."Our analysis finds that this commitment, if fulfilled, could add almost $1 billion to Hollywood's annual investment in movie production," economist Jeff Ferry wrote in the report. "Paramount-Skydance would account for some 40,000 jobs in production and related industries."The report comes as the film industry continues struggling with lower theater attendance, layoffs, reduced production, and increasing competition from streaming platforms.Production jobs in the motion picture industry are now at a 30-year low, the report said."The period up to 2022 (excluding the pandemic year of 2020) is now referred to as the era of 'peak content,'" Ferry wrote. "As that period unwound, Hollywood production studios laid off workers and cut back on output."The report said the five major studios produced 69 feature films last year. Paramount produced eight while Warner Bros. produced 11."Ellison's pledge to produce 30 movies a year would therefore generate total spending of $660 million a year on production," the report said. "Assuming an average movie industry wage approximates to some $100,000 a year, we can estimate that this movie slate will generate 6,600 production jobs a year."The report added that movie industry jobs create additional employment through suppliers and other businesses."That figure would indicate that Paramount's impact would create some 40,000 jobs," Ferry wrote.The study also argued that Ellison's commitment to maintaining a 45-day theatrical release window could help movie theaters that have struggled in recent years."Box office ticket sales are down by 46% since 2000," the report said."In this environment, David Ellison's commitment to maintain a 45-day theatrical 'window' for all of Paramount-Warner releases is a significant development for the struggling theater industry," Ferry wrote.The report cited estimates showing movie theaters support more than 325,000 jobs nationwide and generate billions in local economic activity.The proposed merger would be one of the largest media deals in history, with an estimated price tag of $111 billion."David Ellison has promised to find $6 billion of cost savings in the combined company," the report said.Still, Ferry argued the merger could help reverse recent declines in the entertainment industry."The proposed Paramount-Warner Brothers Discovery merger is a bold, audacious attempt to meet the structural changes and challenges reshaping the filmed entertainment industry," Ferry wrote.