Hollywood became Hollywood long before Sacramento began micromanaging economic development.
David Ellison, CEO of Paramount Skydance, speaks during the Paramount Pictures presentation at CinemaCon on Thursday, April 16, 2026, at Caesars Palace in Las Vegas.
By now, almost every Californian with eyeballs and a memory of the recent past can tell you the story of the failed High-Speed Rail – how voters in 2008 approved a roughly $33 billion project to carry passengers from Los Angeles to San Francisco in lightning speed beginning in 2020. We’re six years past that deadline and about three times over budget with no end in sight. In this tunnel’s end, there’s no light.
We could go on with highest-in-the-nation gas prices, highest state unemployment rate, freakishly high housing costs, sprawling homelessness, out-of-control wildfires, an education system that seems stuck in reverse. But you likely get the picture: There’s almost no public policy problem in California that can’t be made better with less government. And yet here we are: government officials whom you wouldn’t trust with a fork elbowing their way into the conversation about Paramount-Skydance’s proposed acquisition of Warner Brothers Discovery.
Hollywood doesn’t need another bailout. It doesn’t need Sacramento task forces, taxpayer-backed rescue packages, or politicians pretending they know how to revive an industry built on risk, instinct, and creativity. It needs investors willing to bet their own money on movies audiences actually want to see.projects thousands of new jobs or billions in economic activity—though it does—but because the deal represents something increasingly rare in California: private actors voluntarily taking enormous risks with private capital.
Skydance CEO David Ellison has pledged to release 30 major motion pictures annually if the deal succeeds. Ferry estimates that such a production slate could significantly boost Hollywood employment, movie theaters, and related businesses throughout Los Angeles. Ferry estimates the expanded production could support thousands of direct jobs and tens of thousands more indirectly through suppliers, restaurants, retail, and theater activity.
Maybe he’s right. Maybe he’s wildly optimistic. But from a free-market perspective, that’s almost beside the point. Hollywood is notoriously volatile.
Studios collapse. Franchises flop. Audience tastes change overnight. Streaming shattered the old business model and nobody—not Netflix, not Disney, not Warner Brothers—has fully solved the economics yet.
But no one should expect that a California politician—whether GovernorIf Ellison succeeds, Ferry predicts, theater owners, production workers, local businesses, and audiences could all benefit. David Ellison’s proposed 30-film annual slate could add nearly $1 billion in production spending, create roughly 40,000 jobs, and boost major Hollywood studio output by 14 percent. If Ellison fails, he and his investors will absorb the losses. That’s how markets are supposed to work.
Critics might say that politicians should scrutinize the deal because Californians will suffer if David Ellison fails to deliver. But Californians have already suffered through Hollywood’s recent decline despite years of subsidies, political interventions, and state economic planning.
The difference is that David Ellison’s gamble is backed largely by private investors risking their own money—not taxpayers once again being asked to underwrite another California “vision” that may never deliver What should alarm Californians is not the possibility that Ellison’s projections are too rosy. It’s the possibility that Sacramento will once again try to insert itself into the middle of the process. California’s political class has an abysmal record managing business incentives.
For years, lawmakers piled taxes, regulations, labor mandates, environmental restrictions, and production costs onto the entertainment industry—then acted shocked when film production fled to Georgia, Canada, Britain, and Eastern Europe. Now the same government that helped drive Hollywood out of Hollywood increasingly presents itself as the industry’s savior through subsidies, tax credits and political obstructionism designed to protect its political friends and beat up its enemies.
The state expanded its film tax credit program last year in another effort to lure production back. Ferry praises the move. Perhaps it will help at the margins. But subsidies inevitably politicize business decisions.
Once the government starts steering investment, the focus shifts from pleasing audiences to pleasing politicians, regulators, unions, and subsidy boards. What made the industry successful was not central planning. It was entrepreneurial risk-taking: producers betting fortunes on stories, actors, technologies, and audience demand. Some bets failed spectacularly.
Others created cultural institutions. Linda Sánchez: Refunds from Trump’s illegal tariffs must go to Main StreetEllison appears to understand this. Unlike some recent studio executives obsessed with shrinking costs, maximizing streaming subscriptions, and financial engineering, he is explicitly talking about making more movies, rebuilding theatrical releases, and competing aggressively for audiences. His proposed 45-day theatrical window rejects the streaming-era assumption that theaters are obsolete.
The entertainment industry doesn’t need California bureaucrats deciding which projects deserve subsidies, which studios are strategically important, or which business models should survive. It needs the freedom to experiment, succeed, fail, adapt, and compete. If David Ellison wants to wager billions that audiences still want the shared experience of big-screen entertainment, he should be free to try. If consumers agree, Hollywood may thrive again.
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