Director Argues Studios Could Prosper After Leaving Los Angeles
In an opinion piece, director Joseph Kahn argues that a merged Paramount-Warner could succeed if it left Los Angeles, as its true value lies in intellectual property rather than physical studios. He contends that while the move would devastate Hollywood's local industry, the company would benefit from lower costs and flexibility. The column notes the combined franchises have grossed $150 billion.
The opinion piece highlights that Paramount and Warner Bros.’ combined physical properties are valued at $1.67 billion, while their top ten franchises have generated $150 billion—a disparity that underpins the argument for relocation. The author notes that the merged entity, reportedly costing $110 billion, would retain its most valuable assets in intellectual property, not real estate. He also points to Disney’s history of acquisitions as evidence that consolidation tends to expand production volume rather than shrink it, citing the post-merger boom in content creation before the COVID-era contraction.
The column frames a potential exit from Los Angeles as a practical corporate move, with soundstages easily rebuilt elsewhere and contracts handled digitally. However, it warns that such a departure would devastate the local industry, as vendors and infrastructure already face strain. The piece references the 2001 Time Warner-AOL merger as a comparative benchmark, suggesting the current deal could be seen as a bargain despite its scale.
This argument could reshape how industry observers view studio consolidation, potentially normalizing the idea that Hollywood’s geographic identity is expendable. If a major merger relocates, thousands of L.A.-based workers—from crew members to support businesses—may face job losses, while other regions could gain production hubs. The piece also may influence public perception of corporate strategy, framing IP as the true asset and physical studios as liabilities. However, the actual impact depends on whether such a move materializes and how local governments respond.