Source: Fortune
Summary
The proposed Paramount-Warner Bros. merger has sparked concerns about job losses and reduced competition in Hollywood. However, an economic analysis by Ike Brannon and his colleagues suggests that the merged company’s commitment to producing 30 movies a year, with a 45-day exclusive theatrical window, could generate $20 billion in annual US economic activity and support over 90,000 jobs. The analysis estimates that the increased production activity would directly support over 7,000 jobs and sustain an additional 39,000 jobs in upstream and downstream industries, generating $1.9 billion in federal, state, and local tax revenues.
Our Reading
The numbers tell one story.
Paramount CEO David Ellison has pledged to make 30 theatrical releases per year, a 220% increase in investment, or an additional $1.5 billion per annum. The analysis estimates that producing 30 films would generate more than $12 billion in total economic activity. The increased production activity would directly support over 7,000 jobs and sustain an additional 39,000 jobs in upstream and downstream industries.
The merger’s impact on the entertainment industry and broader economy is significant, and opponents’ fears about job losses and reduced opportunity may be unfounded.
As the entertainment industry continues to decline since the Covid pandemic, the Paramount-Warner Bros. merger could provide a much-needed boost.
The strategy enters a familiar phase: a big merger promising big numbers.
But what happens when the numbers don’t add up?
