New Report Warns Paramount-WBD Merger Could Devastate Los Angeles’ Production Workforce

If allowed to proceed, Paramount Skydance’s proposed acquisition of Warner Bros. Discovery could be even more disastrous than many originally thought. According to a new county-commissioned economic report, the deal could put thousands of job-years at risk in Los Angeles County, including work in animation, VFX, and post-production.

The analysis, prepared by CVL Economics, estimates that approximately 4,495 direct film and television “job-years” could be at risk during the combined company’s three-year integration period, from 2027 to 2030. A job-year represents one job sustained for one year, meaning the figure measures the total volume of employment potentially lost rather than the number of individual layoffs.

When the report includes indirect jobs at production vendors and losses from reduced household spending, total exposure rises to an estimated 10,360 job-years. The report associates those losses with $1.26 billion in labor income and $4.06 billion in economic output.

To quote the report directly:

L.A. County Report Warns Paramount-Warner Merger Could Put Thousands Of Production Jobs At Risk

In total, 10,360 job years could be at risk, including:

• 2,661 indirect jobs at small businesses that support production — such as prop houses, printers, transportation companies, and other vendors.
• 3,204 induced jobs that exist because film and TV workers spend money in the local economy — including restaurants, retailers, and service providers.

The economic impact of losing these jobs is significant. At stake:

• $1.26 billion in wages
• $2.78 billion in economic value
• $4.06 billion in total business output
• $547 million in tax revenue, including $78.6 million in local taxes — most of which (63%) comes from property taxes.

To put this into perspective, the direct jobs at risk account for nearly 9% of the 52,016 film and TV jobs California has already lost since 2022 — and almost all those losses (99.6%) occurred in Los Angeles County.

That estimate could prove moot if Ellison follows through on reported threats to move much of the combined company’s workforce, or even its headquarters, out of California unless the state settles its antitrust case. But the company is already facing intense backlash to that threat, with many arguing that it’s not serious.

The report does not break out animation and VFX as separate categories. However, it does explicitly include animators, visual effects artists, editors, and other specialized vendors in what it calls the “slate-dependent creative and production workforce.” Unlike corporate employees, many of these workers are hired project by project or employed by outside vendors. Their livelihoods depend on how many titles are greenlit, their budgets, and where the work is executed.

That distinction matters especially in animation, where the companies overlap significantly. Paramount’s operations include Paramount Animation, Nickelodeon Animation Studio, and Skydance Animation, while Warner Bros. Discovery controls Warner Bros. Pictures Animation, Warner Bros. Animation, Cartoon Network Studios, Hanna-Barbera Studios Europe, Adult Swim, and DC Studios.

The report identifies Nickelodeon and Cartoon Network as directly overlapping competitors in children’s television, with one owner controlling two of the three major U.S. kids cable brands. Disney controls the third.

Recent production patterns at the involved studios offer little reassurance for West Coast artists. Of 73 films on the companies’ combined 2025 slate with identifiable filming locations, only four were shot in California and just one in Los Angeles County. The report notes that The SpongeBob Movie: Search for SquarePants recorded voices in Burbank, but produced its animation in Montreal.

Beyond the gray clouds cast by Paramount’s proposed purchase of WBD, the report examines the challenges California already faces in keeping VFX work in-state. California’s expanded production incentive offers an additional 5% credit for qualifying local VFX spending, but the U.K. provides a more predictable and generous alternative. Qualifying British VFX expenses can receive a 39% gross credit, equivalent to 29.25% net after corporation tax, and are not subject to the program’s ordinary 80% cap on eligible spending.

The report further warns that overseas facilities are becoming more capable of capturing work that once remained in Los Angeles after principal photography moved elsewhere. Warner Bros. Leavesden expanded its on-campus post-production capabilities in June with a new ADR and dailies facility, including a 4K HDR review room and private-fiber connections to Warner Bros. De Lane Lea’s extensive London operation. Skydance Animation also operates a full-production studio in Madrid, formerly Ilion Animation Studios, as part of its integrated Los Angeles-Madrid operation.

These issues are not, of course, unique to Paramount Skydance, but the consolidation of two of Hollywood’s biggest studios could exacerbate them.

Paramount Skydance CEO David Ellison has pledged that the merged company would produce at least 30 theatrical films annually. Many in the industry have expressed sincere doubts about whether such a promise could be kept. As the county report emphasizes, however, a release commitment does not guarantee production, animation, VFX, or post-production work in Los Angeles, or even the U.S.