California’s entertainment industry stands at a crossroads, and the choices made in corporate boardrooms this year should worry anyone who cares about jobs in our state.
When Gerry Cardinale helped engineer the merger between Paramount and Warner Bros. Discovery, he initially suggested the newly combined Skydance wouldn’t need to make deep staffing cuts. That assurance didn’t last long. Within weeks, Skydance’s leadership sent memos acknowledging “difficult decisions” ahead for the workforce, followed by an offer of voluntary buyouts — a clear signal that layoffs are coming.
Those cuts will land hardest here in California, where Skydance is headquartered. It’s precisely why Attorney General Rob Bonta sued earlier this year to block the deal, citing the threat to jobs along with other concerns. That lawsuit eventually ended in a settlement rather than a courtroom victory, and the merger went through regardless. But the episode should serve as a warning. If California wants to safeguard employment in one of its signature industries, state leaders need to take a harder line against this wave of entertainment megamergers before it becomes standard practice.
Consolidation in Hollywood doesn’t just threaten paychecks — it also risks narrowing choices and raising prices for everyday viewers. The recently finalized $22 billion acquisition of Roku by Fox Corp. follows the same troubling playbook: a major media company swallowing a streaming platform to build an entertainment empire. Unlike the heavily scrutinized Paramount-Warner deal, however, the Fox-Roku transaction has drawn comparatively little public attention or political pushback — a gap that should concern Californians given what’s at stake for the state’s workforce and its media landscape.
Fox Corp. employs more than 10,000 people worldwide and maintains a substantial studio footprint in the Los Angeles area. Roku, based in San Jose with additional offices around the state, brings thousands more California jobs into the equation. History suggests those positions are far from secure — Roku already cut 10% of its workforce back in 2023, well before this latest deal closed.
The timing couldn’t be worse. California’s unemployment rate sits at 5.1%, a full point above the national average and among the highest in the country. Despite strong overall economic growth, the state’s job market hasn’t kept pace, fueling concerns among economists about a widening gap between California’s wealthiest residents and everyone else. If lawmakers are serious about protecting middle-class jobs, they need to look beyond automation and artificial intelligence and start scrutinizing these sprawling corporate combinations that routinely lead to layoffs.
Beyond the employment numbers, the Fox-Roku deal raises a more fundamental concern: a built-in conflict of interest. Streaming platforms like Roku are supposed to operate as neutral ground, surfacing content based on viewer interest rather than corporate allegiance. Fox has pledged to keep carrying non-Fox programming on Roku without favoritism for at least three years. But once that window closes, the incentive to spotlight Fox properties — including Fox News and FS1 — while burying competitors becomes obvious, particularly as Fox News’ ratings have been slipping.
If that happens, it wouldn’t just hurt Roku’s other content partners. It could set a precedent that erodes platform neutrality industry-wide, encouraging other media conglomerates to tilt the playing field in their own favor.
The larger question facing California is what kind of entertainment sector we want to build going forward — one defined by competition, creative risk-taking and ample job opportunities, or one dominated by a shrinking number of corporate giants delivering less innovation and fewer paychecks. The answer should guide how aggressively the state responds the next time a merger of this scale comes knocking.
Original source: CalMatters
