Leaked Report Warns of $21 Billion Economic Hit to California if Paramount Moves

A confidential analysis obtained by the Los Angeles Economic Development Corporation forecasts severe economic consequences for the state if David Ellison follows through on his plan to relocate Paramount Skydance’s headquarters out of California.

According to a copy of the report published by Politico, moving Paramount’s operations would result in the loss of between 2,750 and 5,550 job-years across all industries in the short term. Over the five-year period from October 2026 to September 2031, the state would see a decline in economic output ranging from $1.01 billion to $2.03 billion.

The report highlights even more significant long-term damage if the relocation is fully executed. Once the move is complete, California could face the permanent loss of approximately 28,990 to 57,980 full-time jobs statewide, with annual economic output dropping by between $10.6 billion and $21.2 billion.

The potential exodus stems from an ongoing legal battle regarding the company’s proposed $111 billion merger with Warner Bros. In August, Ellison announced that Paramount would leave the Golden State unless California Attorney General Rob Bonta and a coalition of other state attorneys general agreed to settle their lawsuit aimed at blocking the deal. Ellison set an October 1 deadline for negotiations, noting that the studio is evaluating potential new bases in Georgia, Texas, and Tennessee.

Financial pressure is mounting on the merger timeline as well. Starting October 1, Paramount Skydance is required to pay a daily “ticking fee” of $7 million to Warner Bros. Discovery shareholders until the transaction closes. If a settlement is not reached before the trial begins on March 2, the company could owe approximately $1.3 billion in fees.

Efforts to reach an agreement have stalled. Although Bonta and Ellison had scheduled a meeting on August 24, the attorney general canceled at the last minute, accusing Paramount’s team of leaking details from the discussions. While Paramount denied the allegations, Bonta stated he would not resume settlement talks until the studio stops its “lying leaks.” Representatives for Paramount did not immediately comment on the leaked report.