A proposed merger of two media companies could result in thousands of jobs and revitalize the entertainment industry.
A proposed $110 billion merger of Paramount Global and Warner Bros. Discovery could result in 40,000 jobs and provide a massive “boost to the industry.
” “Paramount-Warners’ expansion of production to 30 films a year would provide a boost to the industry worth billions of dollars and would counteract the impact of declining entertainment spending elsewhere,” a“This deal would create a new Hollywood mega-studio with some $69 billion in annual revenue,” the report added. Combining Paramount Global and Warner Bros. Discovery would mean two major Hollywood film studios — Paramount Pictures and Warner Bros.
— would be brought together, along with dozens of cable channels and five streaming platforms led by HBO Max.
“It would also control major sports rights, including NFL and Big Ten football through CBS Sports, as well as leading news outlets like CBS News and CNN,” California Policy Center noted. In February, Paramount-Skydance CEO David Ellison wrote to Congress promising annual slates of 15 movies per year for each Paramount and Warner Brothers.
“My promise to you is to build a stronger Hollywood, by keeping both of these legacy studios operating separately, thereby preserving and potentially increasing jobs,” Ellison said, describing the combined ParamountWarners as an entity that would be a “true champion for the creative community. ” While major studios have been known to shrink in size following a merge, the Paramount-Skydance CEO is insisting the opposite will occur.
“A post-merger slate of 30 films would be a 50% increase on their recent output and represent a 14% increase in the total output of the big five studios,” the California Policy Center report read. Moreover, Ellison’s pledge to produce 30 movies a year would therefore generate total spending of $660 million a year on production.
“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 said. “Every movie industry job generates additional employment and revenue with suppliers and other dependent businesses at a ratio of roughly five to one,” it added. “That figure would indicate that Paramount’s impact would create some 40,000 jobs.
” The California Policy Center went on to reveal, “Our analysis finds that this commitment, if fulfilled, could add almost $1 billion to Hollywood’s annual investment in movie production. ” “Paramount-Skydance would account for some 40,000 jobs in production and related industries,” it added.
“By transforming the two studios into the largest player in filmed entertainment, the combined company would spend roughly $24 billion on content each year, making its content spending larger than The Walt Disney Company or Netflix. ” The report also acknowledged that the biggest killer of the movie business has been the drop in movie theater revenue as more people are staying home and catching flicks on streaming sites.
“Ticket sales have fallen by 46% since 2000 as more Americans have opted to stay home and enjoy entertainment on their own TVs, laptops or phones,” the organization found. It added that the period up to 2022 — excluding the Chinese coronavirus year of 2020 — is now referred to as the era of “peak content,” and that Hollywood production studios laid off workers and cut back on output as that epoch began to unwind.
“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,” the report asserted.
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