David Ellison’s threat to move Paramount Skydance out of California is no longer just a Hollywood power play. A leaked economic report commissioned by the Los Angeles Economic Development Corporation paints a much larger picture, warning that a full departure could hit jobs and economic activity across the state for years.
The report estimates that moving Paramount’s headquarters and other operations away from California could eventually result in the permanent loss of between 28,990 and 57,980 full-time jobs statewide. It also projects annual economic output losses ranging from $10.6 billion to $21.2 billion once the relocation is fully completed.
Those numbers put considerably more weight behind a dispute that initially appeared to be centered on Paramount’s proposed Warner Bros. Discovery acquisition and California Attorney General Rob Bonta’s opposition to the deal. Ellison has made clear that California’s handling of the antitrust fight could influence whether Paramount remains headquartered in the state.
The immediate consequences would be smaller than the long-term figures, but they would still be significant. According to the leaked report, relocating Paramount’s headquarters and other operations could cause losses of 2,750 to 5,550 job-years and between $1.01 billion and $2.03 billion in economic output in California between October 1, 2026, and September 30, 2031.
Why Paramount Is Considering Leaving California
The relocation threat is directly tied to the legal battle surrounding Paramount Skydance’s proposed acquisition of Warner Bros. Discovery. In August, Ellison told Paramount executives that the company could begin moving out of California on October 1 if Bonta and the coalition of state attorneys general challenging the transaction did not agree to settlement discussions.
The stakes are unusually high because the proposed Warner Bros. Discovery deal is valued at roughly $110 billion and has already cleared regulatory review in nearly 70 jurisdictions, according to Paramount. The company says the remaining obstacle is the lawsuit brought by California and other states, while the states argue that the combination could reduce competition and hurt consumers and workers.
Paramount has been considering destinations including Georgia, Texas and Tennessee. The idea of a major Hollywood studio moving its corporate base away from California would be symbolically important, but the economic report suggests the consequences could go well beyond symbolism.
For California, Paramount is not simply another corporate headquarters. Its presence supports a much broader network of workers and businesses, including production-related companies, vendors, professional services and other industries that benefit from activity generated by a major entertainment company.
That is why the report’s distinction between the initial and permanent effects matters. A headquarters move may begin with a relatively limited direct impact, but the broader economic consequences can grow as related businesses and employment are affected over time.
The Bigger Cost Behind a Paramount Exit
The leaked report gives a much more dramatic estimate for what happens if Paramount eventually completes a full relocation of its headquarters and other operations.
Its projection says California could permanently lose approximately 28,990 to 57,980 full-time jobs across all industries. The estimated annual economic output loss would range between $10.6 billion and $21.2 billion.
That does not mean every one of those jobs currently sits inside Paramount. The report’s estimate covers the wider statewide economic effect, including activity connected to the company’s presence. In other words, the impact is designed to capture the ripple effect rather than simply counting Paramount employees who might physically leave California.
The timing is also important. Paramount’s potential move comes at a moment when California has been trying to strengthen its position as a production hub while Hollywood increasingly competes with locations offering lower costs and attractive production incentives. Georgia, for example, has become a major filming destination, while production has also expanded in places outside the United States.
For Paramount, moving its corporate operations would therefore fit into a much bigger industry conversation about where entertainment companies want to operate. But for California, losing a studio with deep roots in Hollywood would represent another warning about the state’s ability to keep major entertainment businesses anchored locally.
The financial pressure surrounding the Warner Bros. Discovery transaction adds another layer to the situation. Paramount agreed to a daily “ticking fee” of $7 million if the transaction remains unfinished after September 30, 2026. Reuters reported that the fee could reach roughly $1.7 billion if the deal remains delayed until June 2027.
That deadline helps explain why October 1 has become such an important date for Ellison and Paramount. The company is facing mounting costs while the legal process continues, creating an incentive to push for a resolution rather than allow the dispute to stretch indefinitely.
Bonta Fight Makes the October Deadline Crucial
The relationship between Paramount and Bonta has also become increasingly tense.
Settlement discussions appeared to gain momentum in August, but a planned meeting was canceled after Bonta accused Paramount’s side of leaking details about negotiations. Paramount denied the accusation, and the dispute added another obstacle to talks.
The legal fight itself is not disappearing. In July, Bonta announced an agreement that would keep the Paramount-Warner Bros. merger from closing until June 1, 2027, or until after a court decision on the states’ claims, whichever comes first.
Paramount has continued to argue that the transaction should move forward. The company says regulators in dozens of jurisdictions have reviewed the deal and cleared it, while California and the other states challenging the transaction maintain that the merger would create an overly powerful media company.
The disagreement has now moved beyond a simple question of whether Paramount can acquire Warner Bros. Discovery. It has become a broader test of how far a major entertainment company is willing to go to pressure regulators and protect a transaction it considers strategically important.
For California, however, the leaked economic figures create a separate concern. If Ellison follows through on the relocation threat, the state would not simply lose a corporate address. The report suggests the consequences could spread through the wider economy and continue for years.
What does the leaked Paramount report say?
The report from the Los Angeles Economic Development Corporation warns that moving Paramount’s headquarters and other operations out of California could cause billions of dollars in lost economic output and significant employment losses. Its long-term estimate reaches as high as $21.2 billion in annual economic output losses.
How many jobs could California lose?
The report estimates a permanent loss of approximately 28,990 to 57,980 full-time jobs across California if Paramount completes the relocation of its headquarters and other operations. The figure includes effects across industries rather than only Paramount’s own workforce.
Why does Paramount want to leave California?
David Ellison has tied the potential move to the legal battle over Paramount Skydance’s proposed acquisition of Warner Bros. Discovery. He has indicated that Paramount could begin the relocation process on October 1 if the state attorneys general do not reach a settlement over the antitrust lawsuit.
Where could Paramount move?
Paramount has considered several states as potential alternatives, including Georgia, Texas and Tennessee. The company has not announced a final destination for a full relocation.
How much could the move cost California?
The leaked report estimates that a completed relocation could reduce California’s annual economic output by between $10.6 billion and $21.2 billion. It also estimates a permanent statewide employment loss of between 28,990 and 57,980 full-time jobs.
What happens to the Warner Bros. deal next?
The proposed acquisition remains tied up in the legal battle brought by California and other states. Paramount has also agreed to a $7 million-per-day ticking fee after September 30 if the transaction has not closed, increasing the financial pressure to resolve the dispute.
For now, Paramount has not commented on the leaked economic report. But its numbers give California a clear idea of what could be at stake if Ellison turns the relocation threat into reality.
The bigger question is whether the October deadline produces a settlement or the beginning of a genuine Hollywood migration. Either way, the report suggests the consequences would reach far beyond Paramount’s famous studio gates.
