After Warner Bros. merger, changes are coming to the historic Paramount lot. Here’s what to expect

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Now that Paramount Skydance is buying Warner Bros., the new company is likely to have around $79 billion in debt. Because of this, Paramount leaders are planning to sell off unnecessary properties and other assets – and they have a significant amount of these to consider.

Most people immediately think of the famous studios in Burbank and Hollywood, where iconic movies and TV shows have been created for decades and are still being made today.

According to CBRE broker Nicole Mihalka, both studios are located in a highly desirable area within a 30-mile radius of the heart of Hollywood, where most industry professionals prefer to work and live. She describes it as ‘very prime real estate.’

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In early 2024, Sony and Apollo were interested in buying Paramount, with the intention of selling off its assets. However, Paramount seemed unwilling to sell its main studio lot.

Currently, Paramount intends to run both its studios separately, with each releasing around 15 movies annually. However, the long-term plan, according to sources close to CEO David Ellison, is to combine most operations onto the Warner Bros. studio lot in Burbank, streamlining things and avoiding duplicated efforts at the Paramount lot on Melrose Avenue.

Paramount isn’t planning to tear down its historic studio lot – the oldest working film studio in Los Angeles – due to rules protecting its historic buildings. They also recently built a new post-production facility there and expect to continue needing the space.

The new plan focuses on renting out the property for film and television production, potentially including projects from Paramount and HBO’s streaming services. Ellison is also exploring options to build retail spaces and offer office rentals on the 65-acre site.

The major film studios own a huge amount of property. According to CoStar, a real estate data company, they share about 12 million square feet of space, including their studio lots, office buildings, and long-term leases in film hubs like Burbank, Hollywood, and New York.

Hollywood Inc.

Paramount Chief David Ellison explained to investors that the Warner Bros. acquisition isn’t simply about making the companies bigger, but about fundamentally changing how the business operates.

Paramount Pictures Studios, a Hollywood landmark with over a century of history, has been the setting for countless iconic films. Just picture Gloria Swanson as Norma Desmond in “Sunset Boulevard” struggling to get past its gates, or think of other beloved classics like “The Godfather,” “Titanic,” and “Breakfast at Tiffany’s” – all filmed there.

The studio lot is a crowded mix of soundstages, offices, trailers, and workshops – some of the original woodworking mills even date back to the early 1900s. Its complicated layout is due to the fact that Paramount combined its lot with the former RKO studio, which it acquired from Desilu Productions.

According to CoStar, Warner Bros. utilizes 11 million square feet of commercial property and owns 9.5 million square feet across 14 properties, primarily in the U.S. and the U.K. Roughly 3 million square feet of their holdings are located in the Los Angeles area.

The company also owns the large Warner Bros. Studios Leavesden in the U.K., as well as the Turner Broadcasting System’s main offices in Atlanta.

According to CoStar, Paramount Skydance has a total of 8 million square feet of space and owns 14 properties adding up to 2.1 million square feet. Beyond its main Hollywood studio, Paramount also owns well-known buildings in New York City, including the Ed Sullivan Theater and the CBS Broadcast Center.

Warner Bros. has a large 3-million-square-foot studio lot in Burbank, featuring over 30 soundstages, set construction areas, and outdoor filming locations. Many iconic movies like “Casablanca” and TV shows such as “Friends” were made there. Paramount Pictures owns a 1.2-million-square-foot campus on Melrose Avenue and also utilizes additional production facilities, according to CoStar.

Paramount Studios has already prepared its property for future expansion. Over ten years ago, the company received permission from the city to add 1.4 million square feet of new space to its main offices and nearby land it owns.

The $700 million plan to rebuild the area, first proposed in 2016, involved several years of studies to ensure it wouldn’t harm the environment, as well as conversations with nearby residents and business owners.

The proposed plan would enable the building of up to 1.9 million square feet of new space for stages, offices, production facilities, and retail, while also allowing for the demolition of up to 537,600 square feet of existing buildings. This would result in a net gain of almost 1.4 million square feet of space.

According to architecture firm Rios, the plan keeps some of the site’s history by concentrating new buildings on certain parts of the property along Melrose Avenue and within a small section of the existing production area.

According to Mihalka, the Warner Bros. and Paramount studio lots are incredibly valuable properties. He believes they have significant potential, not just as places where movies and TV shows are made, but also as popular destinations for tourists.

Hollywood Inc.

The recent merger between Paramount and Warner Bros. Discovery is causing worry that the newly formed company may cut jobs.

Hollywood is still recovering from recent company mergers, and film and TV production has significantly decreased in the area. Many productions are now filming elsewhere – in places like New York and New Jersey, or even overseas – to take advantage of better tax incentives.

California lawmakers increased funding and broadened the requirements for the state’s film and television tax credit program last year, hoping to attract more production companies back to the state. Since then, over 100 film and TV projects have received tax credits through the updated program.

It’s taken some time, but Mihalka believes tax breaks and the convenience of working nearby will encourage more film and television production in the Los Angeles area, including at studios like Warner Bros. and Paramount.

Because these locations are so desirable, I expect show creators and actors to resist filming outside of the state and to prioritize staying here. I believe we’ll see continued growth and success in this area.

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2026-03-05 14:31