The proposed Paramount-Warner Bros. Discovery merger could be vital to California’s standing as the worldwide leader in the entertainment industry.
Myung J. Chun/Los Angeles Times/Getty Images
California doesn’t just make movies. It sustains an entire economic ecosystem that supports hundreds of thousands of jobs.
That ecosystem is under serious pressure.
Production is steadily moving elsewhere — to Georgia, Canada and beyond. What used to be California’s default advantage is now territory we have to defend.
Article continues below this ad
That is the context in which we have to read the recently proposed merger between Paramount and Warner Bros. Discovery.
The deal is a long time coming. Warner Bros. Discovery had previously been courted by Netflix, which ultimately backed down over concerns that the merger would grant the mega-streamer too much market share.
San Francisco Chronicle Logo
Make us a Preferred Source to get more of our news when you search.
Add Preferred Source
The Paramount deal was seen as the safer choice, resulting in less consolidation. Still, some California officials have raised concerns about Paramount’s bid. These reflect a broader skepticism and concern over the consolidation in media and the potential stifling of political dissent, understandable instincts that I share.
I am not going to suggest to anyone that this is a perfect deal. Competition, consumers and workers all matter. But so does economic reality.
Article continues below this ad
The entertainment industry is no longer primarily domestic. It is a global, capital-intensive competition involving technology platforms, international studios and streaming giants with enormous resources. In this environment, scale is not optional; it is what allows companies to invest, produce and compete.
The Paramount deal is fundamentally about building that capacity. It’s about letting America’s entertainment industry remain on top in a globalized world.
Without the merger, the likely outcome will be a weaker domestic market. That will mean fewer productions, investments and jobs here in California.
California is already seeing what happens when production leaves: soundstages go idle, contracts dry up, small businesses lose steady work. Discouraging investment will only deepen these woes. Companies will delay decisions while investors look elsewhere.
For California, the consequences could be serious. The state’s leadership in entertainment rests not only on talent but also on credibility. If businesses begin to question whether California evaluates deals on stable, evidence-based grounds, capital will move to jurisdictions that offer greater clarity. That shift is already underway. Workers ultimately bear the cost.
Article continues below this ad
Larger and well-capitalized media companies are better positioned to sustain production, invest through downturns and expand distribution. That translates into more consistent employment across the industry. Fragmentation and financial weakness lead in the opposite direction: fewer projects, tighter budgets, and reduced opportunities. That is not worker protection.
None of this means the Paramount deal should get a free pass. But the scrutiny needs to be grounded in concrete analysis of how the deal would impact consumer pricing and competition. Because on its face, this deal won’t seemingly impact either.
California has long balanced skepticism toward concentrated power with a commitment to growth and job creation. That balance is why one study recently ranked the state as the best-performing economy anywhere in the world.
Guest opinions in Open Forum and Insight are produced by writers with expertise, personal experience or original insights on a subject of interest to our readers. Their views do not necessarily reflect the opinion of The Chronicle editorial board, which is committed to providing a diversity of ideas to our readership.
Read more about our transparency and ethics policies
But California’s position as the center of the global entertainment industry has never been guaranteed. That’s why deals like the Paramount-Warner Bros. Discovery merger can be so important — they can help to protect our long-term economic future.
Article continues below this ad
Let’s continue to review the transaction carefully and not throw up our hands too rashly. The hardworking people of this state deserve as much.
Bob Wieckowski served as a Democratic member of the California Assembly and Senate. He served on the Judiciary Committee in both houses and the chair of that committee in the Assembly.