LOS ANGELES (CNS) – A new report found the merger of Paramount Skydance and Warner Bros. Discovery could result in the loss of about 2,495 jobs in the Greater Los Angeles County region and about 6,000 globally, officials announced Friday.
On Thursday, the L.A. County Department of Economic Opportunity released its report, which showed the jobs at risk would mainly be in corporate, tech, real estate and other shared functions due to duplicative roles across the two companies.
The department noted their estimate should not be read as a layoff forecast, and it only defines the scale of possible employment impacts that may be subject to consolidation.
Department officials the combined company would begin by carrying approximately $82 billion in gross debt, an unusually high amount relative to earnings — roughly seven times their current annual profits. The report further raised concerns about whether the merged company’s earnings would be sufficient to sustain such high levels of debt.
The combined company may also pursue more than $6 billion in projected savings, increasing pressure to consolidate corporate operations, technology systems, real estate, and administrative functions.
The report came in response to a March 17 motion authored by Supervisor Lindsey Horvath and approved by the Los Angeles County Board of Supervisors.
“In Los Angeles County, the entertainment industry has long been our economic and cultural engine, and we have to fight like hell to protect it,” Horvath said in a statement.
“This deal increases the threat to jobs, workers, and communities that are already under attack. Nothing is off the table when it comes to protecting our workforce, our economy, and the future of the entertainment capital of the world,” Horvath added.
DEO partnered with LA County Film Office and retained CVL Economics to conduct the 60-day interim analysis. A final 120-day report is expected to be released in August, which will include additional analysis and recommendations to support workers, business and the long-term resilience of L.A.’s entertainment economy.
“The findings reinforce what workers, employers, and small businesses have been telling us for years: our entertainment economy remains in a fragile recovery period,” Kelly LoBianco, DEO directors, said in a statement.
“Under the leadership of the Board of Supervisors, DEO and the LA County Film Office are taking a proactive approach to understanding potential risks and preparing solutions that protect workers, businesses, and the long- term competitiveness of our creative economy,” LoBianco added.
The report comes about a week after the Justice Department approved Paramount Skydance’s proposed acquisition of Warner Bros. Discovery, paving the way for a merger that would unite two of Hollywood’s most storied studios and significantly reshape the entertainment industry.
The DOJ said in a statement “the transaction is not likely to result in harm to competition or American consumers, including with respect to: (1) streaming video on demand; (2) linear television; and (3) studio development, production, or distribution of films for theatrical release.”
The estimated $110 billion transaction would combine Paramount Pictures and Warner Bros., studios whose histories span more than a century. The combined company would also include the Paramount+ and HBO Max streaming services, the CBS broadcast network and cable channels, including CNN.
“We are grateful for the Department of Justice’s thorough review of this transaction, as well as the work of the other agencies that have completed their reviews and provided clearance to date,” Paramount said in a statement.
David Ellison, chief executive officer of Paramount Skydance, has previously said the merger would honor the legacy of both companies while creating a next-generation media and entertainment business. Ellison is the son of Oracle co-founder Larry Ellison.
The deal has faced opposition from some entertainment industry professionals and elected officials who argue it would further consolidate ownership in the media industry.
More than 1,000 entertainment professionals signed an open letter in April opposing the merger, contending it would reduce competition at a time when the industry is already highly concentrated.
California Attorney General Rob Bonta, under state and federal antitrust law, has the authority and ability to block or delay the merger.
Bonta’s office has publicly stated that they are actively investigating and coordinating with other states and expect to decide imminently whether to file a lawsuit against the merger. A state-level lawsuit and preliminary injunction could significantly delay or derail the deal, despite DOJ approval.
Recent Comments