Hollywood’s Exodus Accelerates: Paramount Threatens to Leave California
- Rex Ballard
- 2 days ago
- 3 min read
Hollywood’s production decline continues, with another longtime service company shutting down and Paramount Skydance CEO David Ellison threatening to relocate the studio’s headquarters and jobs out of California unless Attorney General Rob Bonta settles or drops an antitrust challenge to Paramount’s planned acquisition of Warner Bros. Discovery.
Shadowcast Pictures, a Los Angeles-based production equipment rental company that supplied cameras, lighting, and gear for nearly two decades, closed in June 2026 after struggling through years of reduced local work. It joins more than 80 film and television production service businesses across Los Angeles that have closed since 2022.
Film shoot days in Los Angeles fell to roughly 19,700 in 2025—the lowest since the COVID year of 2020—while scripted television production has dropped by nearly 30% since 2019 across key measures. Soundstage occupancy has hovered around 62% even as new stages open into a soft market. Tens of thousands of motion-picture and sound-recording jobs have been lost in Los Angeles County in recent years.
Productions continue migrating to states and countries with stronger incentives and lower costs, including Georgia, New Jersey, Texas, the United Kingdom, Canada, and Australia. California expanded its Film & Television Tax Credit Program to $750 million annually in 2025 and has approved numerous projects, but industry participants say the credits remain less competitive than those offered elsewhere and face new limitations from budget language that caps how quickly large studios can claim them.
The Paramount Standoff and the Netflix Connection
Ellison has told senior executives that Paramount will begin moving its Los Angeles headquarters (followed by studio jobs over a multi-year timeline) if Bonta does not engage in settlement talks by early October. Potential destinations include Tennessee, Texas, and Georgia. Paramount employs thousands in California. Bonta has dismissed the threat as an attempt to pressure the state.
Critics point to a clear financial relationship between Bonta’s political operation and the family of Netflix co-founder and chairman Reed Hastings—Netflix being a direct competitor to Paramount in streaming and content production. Campaign finance records show that Patty Quillin, Hastings’ wife, contributed $1 million to the Smart Justice California Action Fund in March 2022. That committee then provided substantial support to efforts backing Bonta’s attorney general campaign, including a $150,000 contribution to a pro-Bonta committee. Quillin has also given maximum contributions to Bonta and to his wife, Assemblywoman Mia Bonta, in multiple cycles.
Republican challenger Michael Gates and California GOP leaders have called for an investigation, arguing the lawsuit against Paramount effectively protects a major Netflix competitor while Bonta’s political network received significant funding tied to the Hastings family. Bonta maintains the case is strictly about antitrust law.
This episode fits a larger pattern. As Shasta Unfiltered has previously reported on California’s corporate exodus and the WARN Act filings that have affected tens of thousands of workers, high taxes, regulations, housing costs, and policy uncertainty continue to drive businesses and jobs out of the state. The entertainment industry’s struggles are simply one high-profile example.
For the North State the direct hit is limited—Shasta County has Film Shasta and distinctive locations—but the statewide loss of tax base, middle-class jobs, and economic activity affects every county. A more competitive California business climate would keep more production (and related vendors) inside the state rather than forcing them to leave.
Governor Newsom and supporters of the expanded tax credits say the program is delivering measurable results. Vendors and producers on the ground describe the recovery as incomplete and the overall cost structure still uncompetitive. Once crews, equipment houses, and infrastructure take root elsewhere, bringing the work back becomes far more difficult.
The combination of empty stages, closed service businesses, and a major studio openly exploring an exit underscores the stakes. Hollywood built its brand in California. Whether enough of the industry will stay depends on whether state policy finally matches the reality of a global, highly mobile production marketplace—and on whether political relationships influence which competitors face aggressive enforcement.
