Hollywood has spent the better part of two decades dismantling its own front door. Ticket sales have fallen by nearly half since their 2002 peak, the domestic box office finished 2025 at roughly $8.6 billion — still about a quarter below where it stood in 2019 — and the major chains have spent the post-pandemic years filing bankruptcies, shuttering screens, and begging Wall Street for capital that no longer wants to come.
Now, into that grim landscape, a $110 billion proposal to merge Paramount Global and Warner Bros. Discovery has arrived with an unusual pitch. According to a new report from the California Policy Center, the combined studio would not only preserve jobs but generate roughly 40,000 of them, while pumping nearly a billion fresh dollars into theatrical production at the very moment Hollywood seemed determined to abandon the multiplex altogether.
The report, Lights, Camera, Growth, examines what Paramount-Skydance CEO David Ellison has been promising Congress, regulators, and shareholders for months: that the merged ParamountWarners would release 30 films a year — 15 from each studio brand — rather than collapse the two companies into a single shrunken slate.
That number represents a fifty-percent jump over the studios’ recent output and a fourteen-percent increase in the combined output of the so-called Big Five. The California Policy Center estimates the expanded slate would generate $660 million in annual production spending, support 6,600 direct production jobs, and — using the standard five-to-one multiplier the industry applies for ancillary employment — sustain a total of roughly 40,000 jobs across suppliers, vendors, and dependent businesses.
If those numbers hold, the combined company’s $24 billion in annual content spending would surpass both Disney and Netflix, restoring something Hollywood has not had in years — a studio willing to bet on theaters rather than against them. That is the part of the story most legacy outlets have buried beneath the usual hand-wringing about consolidation. The other part, the part worth pausing over, is that the merger almost did not happen this way at all.
The Deal Hollywood’s Streaming Lobby Did Not Want
Lost in much of the coverage is that Paramount’s bid emerged only after Warner Bros. Discovery had agreed to be acquired by Netflix in late 2025 — a deal that would have handed the streaming giant control of the HBO Max library, the Warner film catalog, and roughly 43 percent of the global subscription video-on-demand market, more than twice its nearest competitor.
Paramount made its case directly to WBD shareholders in March, arguing that the Netflix transaction would “deliver higher prices for consumers, reduce compensation for content creators and talent, and significantly harm American and international theatrical exhibitors.”
The Warner Bros. Discovery board ultimately agreed, declaring Paramount’s $31-per-share all-cash offer a “Company Superior Proposal” and walking away from Netflix.
Consider what that means in practical terms. The deal antitrust skeptics now wring their hands over is, by any honest measure, the better outcome for theaters, for working actors and crews, and for consumers. A Netflix-Warner combination would have accelerated the very streaming-only model that has hollowed out the theatrical business.
The Paramount alternative does the opposite: it commits to a 45-day theatrical window on every release, doubles down on big-screen production, and treats exhibitors as partners rather than obstacles. The Federal Trade Commission’s Hart-Scott-Rodino waiting period expired in February without action. If the deal is going to be slowed, the threat will come from a different direction.
California’s Attorney General Waits in the Wings
That direction, predictably, is Sacramento. In recent investor communications, Ellison acknowledged that while federal antitrust clearance has been secured and approvals from Germany, Slovenia, and other jurisdictions are in hand, California’s attorney general retains the ability to file suit or seek a temporary restraining order that could delay closing by six to eight months. The ostensible concern is job losses in California. The concern is also, transparently, political.
Here is the irony worth lingering over. Hollywood production has already fled the state in droves. FilmLA reports that filming permits in Los Angeles County totaled just 19,700 in 2025, a 49 percent collapse from 2018 levels and roughly equivalent to the pandemic-shutdown numbers of 2020.
The exodus is the predictable consequence of California’s regulatory environment, tax structure, and union complexity — none of which were imposed by Paramount or Warner Bros. The state that has spent fifteen years pricing its signature industry out of its own borders now considers blocking the one deal that promises to expand production. A study commissioned in California, by Californians, projects that the merger would add tens of thousands of jobs. The political class will likely sue anyway.
Why This Matters Beyond the Trade Press
It would be easy to file this story under “media business news” and move on, but the cultural stakes are larger. The collapse of the theatrical model has not just been an economic story; it has been a civic one. The communal experience of sitting in a darkened room with strangers, watching a story unfold on a screen larger than your living room, has been one of the last shared rituals in an atomized country.
When AMC closes another fifty screens and Regal limps through Chapter 11, what dies is not merely a business. It is a public square — one of the few remaining places where Americans of different backgrounds occupied the same space and the same story at the same time.
Streaming, for all its conveniences, has accelerated the privatization of culture. Every viewer in his own bubble, every algorithm a different feed, every household its own miniature cinema. The replacement of theaters with screens-in-pockets has not made us more cultured. It has made us more isolated, more distracted, and more easily sorted into our respective demographic silos. There is something to be said for the older arrangement, even if the films themselves were often mediocre.
The book of Ecclesiastes reminds us that two are better than one; because they have a good reward for their labour. For if they fall, the one will lift up his fellow: but woe to him that is alone when he falleth. The big-screen experience was, at its best, an exercise in not being alone.
A Conservative Case for Antitrust Restraint
None of this is to suggest that the merger should be waved through without scrutiny. Concentration of cable channels, news outlets, and sports rights in a single corporate hand raises legitimate questions about media diversity, and it is fair to note that the combined company would control CBS News and CNN — two outlets whose recent track records have done little to inspire confidence in the trustworthiness of American journalism. Those concerns deserve a hearing.
But conservative antitrust thinking, at its best, has always asked the practical question rather than the ideological one. Does the proposed combination raise prices? Does it reduce output? Does it harm consumers and workers? In this case, the documented evidence runs the other way. Output is projected to rise. Production jobs increase. Theatrical windows are preserved.
The competing bid — the one Netflix offered and Warner shareholders rejected — would have done precisely the harms antitrust law was written to prevent. The Paramount deal, whatever its flaws, points in the opposite direction.
If California’s attorney general blocks or delays this merger on flimsy political grounds, the result will not be more competition or better outcomes for workers. The result will be fewer movies, fewer jobs, more closed theaters, and the continued migration of American film production to whichever foreign jurisdiction will host it. That is not a victory for consumers.
It is a victory for ideology over evidence — which, in California, is sometimes hard to tell apart.
For an industry that has spent the last decade producing films that fewer and fewer Americans want to watch, in cities that fewer and fewer studios want to film in, the Paramount-Warner deal represents something rare: an actual business proposal aimed at making more things people might actually pay to see.
Whether Hollywood can use that opportunity to produce work worth the price of a ticket is a separate question — and a harder one. But the opportunity, at least, deserves a chance to exist.
