Paramount theater pledge could support 90,000 jobs, analysis says
A planned 30-film annual slate tied to the Warner Bros. deal could lift theaters and local businesses, according to an economic analysis.
By Sofia Marchetti · World Affairs Correspondent
3 min read
Paramount’s pledge to release more films in theaters has become a central economic argument for its proposed Warner Bros. deal. An analysis by Ike Brannon of the Jack Kemp Foundation and colleagues Russ Kashian and Erik Bergren estimates the plan could support more than 90,000 U.S. jobs and generate more than $20 billion in annual economic activity.
The commitment, described by Paramount CEO David Ellison, calls for 30 theatrical movies a year, split between 15 from Paramount and 15 from Warner Bros., with each film getting at least 45 days exclusively in theaters. Brannon wrote in Fortune that Ellison recently said he remained “firmly committed” to that target.
Merger scrutiny meets theater economics
The proposed combination has drawn antitrust and employment concerns. The Justice Department recently approved the deal, according to The Wall Street Journal, while Reuters has reported that several Democratic state attorneys general are preparing a possible lawsuit to block it.
A report commissioned by Los Angeles County warned that consolidation could threaten jobs in the region, according to Brannon. He argued that the county-commissioned analysis did not account for potential gains outside Los Angeles from expanded production and a longer theatrical release strategy.
Brannon and his colleagues used IMPLAN, an economic modeling tool, to estimate the broader effects of the production pledge. Their analysis said the 30-film plan would represent a steep increase from current output: Warner Bros. averages just over seven theatrical releases a year, while Paramount averages slightly more than six.
Reaching 30 films annually would require about $1.5 billion in additional yearly investment, a 220% increase, according to the analysis. Brannon’s team estimated that producing those movies would create more than $12 billion in total economic activity, including about $2.7 billion in direct studio spending and $9.5 billion from related effects in the wider economy.
Theaters and nearby businesses
The analysis also tied the theatrical window to local spending. Brannon wrote that moviegoing supports theater jobs, nearby restaurants and other businesses that benefit from foot traffic.
After production, the distribution and exhibition of the films would generate nearly $7.4 billion in GDP-related effects, including $2.6 billion directly in the movie theater industry, according to the analysis. It estimated that the release plan would support more than 25,000 theater jobs and nearly 20,000 additional jobs in related industries.
Combined, the production and theatrical distribution effects would exceed $20 billion in additional annual economic activity, Brannon’s analysis said. It also projected about $1.9 billion in federal, state and local tax revenue from the expanded film activity.
The argument comes as Hollywood remains under pressure from lower production employment. Film and television production jobs are 30% below their 2022 highs, according to The Wall Street Journal, and California has lost as much as $1 billion in revenue from the slump, according to the New York Post.
Brannon contrasted Paramount’s theater commitment with Netflix’s position, citing a Fox News report that Netflix’s film chief said the company would not work with directors who want theatrical releases. The debate over the Paramount-Warner Bros. deal now includes both traditional merger concerns and a competing claim: that a larger studio with a firm theater slate could send more work and spending into communities beyond Hollywood.
This story draws on original reporting from Fortune.