• Markets: Stocks popped yesterday after the Fed’s recent rate hike convinced investors that the central bank is trying to tame inflation. Meanwhile, the aptly named generator company Generac went nuclear thanks to the news that it made a deal to supply Amazon data centers with backup gennies.

I THINK YOU SHOULD LEAVE

Illustration: Morning Brew Inc., Photo: Getty Images

Like someone juggling three barista jobs between auditions for nonspeaking parts, Paramount is contemplating giving up on LA. The Hollywood studio has reportedly intensified threats to leave the city after talks to settle California’s antitrust case contesting its planned $110 billion acquisition of Warner Bros. fell apart last month.

Deadline reported this week that Paramount notified Los Angeles Mayor Karen Bass that it put in a deposit for moving trucks, while studio insiders told Politico that the company is searching for office space in Tennessee. Paramount is also reportedly considering relocating to Texas or Georgia.

Paramount CEO David Ellison said the company will ditch LA if the state doesn’t negotiate a settlement by Oct. 1—the date it has to start paying Warner Bros. $7 million for each day that the merger doesn’t go through. Critics think the threat to pack up is a bluff meant to pressure officials to green-light the deal.

Paramount to the local economy

The departure of the last remaining major studio headquartered in LA proper (rivals like Disney and Warner Bros. are technically in nearby Burbank) would be a devastating economic and cultural blow to a town where it’s operated for 100+ years:

• Los Angeles County could lose more than 1,000 jobs if Paramount relocates its headquarters, and tens of thousands of jobs if Paramount yanks all operations.
• That would deepen the wound from the more than 42,000 film and TV jobs the city already lost between 2022 and 2024.

The local economy could face a shortfall of up to $2 billion in the next five years, according to a recent report by the LA County Economic Development Corporation.

Paramount would lose more than just nice beaches. Industry observers say that leaving LA would jeopardize the studio’s talent pool, as production staff might be reluctant to follow the company out of the entertainment hub. It could just move its HQ to qualify for state incentives, but keep much of its staff in Southern California.

Looking ahead: The two sides will meet next month for court-mandated settlement talks. California Attorney General Rob Bonta is demanding that Paramount offload some of its assets for the merger to proceed.—SK

      

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