LOS ANGELES-Hollywood's battered entertainment economy avoided a potential catastrophe this week when Paramount said it would remain in Los Angeles after merging with Warner Bros. Discovery.

That doesn't mean Los Angeles is celebrating.

"That's All?" a headline in The Hollywood Reporter asked after a settlement was announced between Paramount and state attorneys general led by California's Rob Bonta.

He headed a coalition of states that filed an antitrust lawsuit against the $81 billion merger, but dropped it in return for concessions from Paramount, including production and spending commitments.

The deal helped stave off fears of devastating losses for the city's most iconic industry from Paramount following through on a threat to move its headquarters out of state. At the same time, critics who were looking to either stop the merger in its tracks or limit its scope were left wanting.

A small group of protesters assailed the state attorney general and Paramount's chief executive on Tuesday, chanting "Shame on Bonta!" and "Shame on David Ellison!" in front of the iconic Paramount Pictures gate on the edge of Hollywood.

Eric Kissack, an editor who worked on "The Studio" and "Veep," said the merger adds more uncertainty to a business that has taken blows over the past decade from the pandemic, streaming, and productions leaving the U.S.

"The industry is so constantly in flux that it's impossible to predict what this will mean," Kissack said.

Under the settlement, Paramount agreed to release at least 30 movies annually in the first five years after the merger closes. The studio also agreed to invest, for five years, an additional $300 million annually in domestic film and television production, beyond what it and Warner spent in 2025, Bonta said Monday.

Some critics of the deal said these concessions didn't amount to structural changes such as divesting studios or cable channels.

"These promises are extremely, exquisitely hard to enforce," said Alvaro Bedoya, an antitrust lawyer who served on the Federal Trade Commission during the Biden administration, likening Paramount's concessions to a pinkie promise. If Paramount fell short of its spending commitments, for instance, attorneys general would need to rely on the company's own data to prove it, Bedoya said.

"Even when you have the cleanest case-the cleanest possible case where everyone agrees the bad thing happened-it takes years," he said.

Asked at a press conference what the baseline would be for Paramount's additional production spending, Bonta said, "We don't have an exact number, but the $300 million is a significant increase."

Industry data provider ProdPro estimates Paramount and Warner together spent about $2.49 billion on U.S.-based production last year, suggesting the agreement would bring a roughly 13% increase.

Nick Stanton, an animation writer who has produced shows for Disney and Netflix, said he was hopeful the merger's completion will lead to a burst of activity by Paramount now that the company is more certain about its future. "But I am very wary of corporate mergers like these in general, since they mean less buyers in an already bleak marketplace," Stanton added.

California Gov. Gavin Newsom-who helped unofficially mediate the agreement between state lawyers and Paramount, The Wall Street Journal reported-called the agreement a "win for California workers and our creative economy."

But there's no guarantee that the increased spending or film production will take place in the Golden State, which has been losing market share in the industry for decades.

Only one of the 19 films scheduled by Paramount and Warner for 2025 was primarily shot in California, according to an economic-impact report commissioned by Los Angeles County and published in June.

Last year was weaker than usual for film production, said Andy Young, a film and television editor who has worked in Los Angeles for a decade. "The AGs should have fought for keeping & creating union film jobs in CA," he said in an email.

Meanwhile, the report estimated that redundancies from the merger could put 2,495 regional jobs at risk, mainly in corporate functions, technology and real estate.

Once merged, the combined company's balance sheet presents an additional risk, the June Los Angeles County report said. Paramount agreed to pay Warner shareholders a huge premium to acquire the company, which it plans to finance with tens of billions in debt. That will place pressure on the combined company to deleverage, the report said.

Hollywood's workforce is already smarting, with job losses steepening after dual strikes by actors and writers three years ago. The county's employment in motion-picture and video production jobs fell 39% to 78,902 between 2022 and last year, marking the lowest level since 2001.

Many of these are solid, middle-class jobs held by people behind the scenes who keep studios humming, including camera operators, makeup artists and grips. And the studio jobs support workers in many support industries, including truck drivers, costumers and caterers.

In the wake of Monday's settlement announcement, Los Angeles political leaders who opposed the merger were well short of enthusiastic.

Mayor Karen Bass said she didn't want to see two of Hollywood's largest studios become one. But "now we must focus on holding the companies accountable to these commitments to keep productions on L.A. stages, crews on sets, and ensure paychecks for hardworking Angelenos," she said.

Her opponent in November's mayoral election, City Councilmember and Democratic Socialist Nithya Raman said she would work with the attorney general and a writers union to enforce the commitments Paramount made.

Los Angeles had faced a significant risk: Paramount's threat to move its headquarters out of California if it couldn't resolve the antitrust suit. One impact study by the nonprofit Los Angeles County Economic Development Corp., commissioned by Paramount, estimated that California could permanently lose between 29,000 and 58,000 full-time jobs across all industries if the company moved its headquarters and other operations from the state.

"When you look at the possibilities that were on the table, I think this is the best one," said Lee Ohanian, an economics professor at the University of California, Los Angeles.

Unions representing Hollywood actors, writers and backstage workers expressed gratitude to Bonta for extracting concessions from Paramount-as well as pessimism over the deal's implications for their industry.

"We continue to believe the merger will cause damage to writers and the industry at large," said the Writers Guild of America.

Now lacking support from state attorneys general in a complex antitrust case, WGA dropped a parallel lawsuit to block the Paramount-Warner merger.