Paramount has committed to producing 30 movies a year, each with a 45-day exclusive theatrical window. To understand what that could mean for theaters and communities across the country, my colleagues Russ Kashian, Erik Bergren and I did an economic analysis of this commitment, and we found that it could generate almost $20 billion in annual U.S. economic activity and support over 90,000 jobs across the country.

Despite the Justice Department’s recent approval, several Democratic state attorneys general are reportedly preparing a potential lawsuit to block the deal. A recent report commissioned by Los Angeles County suggested that the transaction could place jobs in the Los Angeles region at risk due to consolidation. However, the analysis did not consider the broader job creation and economic activity across the entire country that would be generated by the combined company’s commitment to increased film production and a 45-day theatrical window.

To assess what the merger could mean for communities across America, we used the economic analysis tool IMPLAN to estimate the impact of the transaction on the economy. We found that the Paramount–Warner Bros. merger and the ancillary guarantees would result in substantially increased spending and investment in the film industry, which would create considerable economic benefits for communities and movie theaters across the country.

In presenting its offer, Paramount CEO David Ellison pledged to make 30 theatrical releases per year–15 from Paramount and 15 from Warner Bros., which will continue to largely operate separately–that would run in theaters for a minimum of 45 days. Just last month, Mr. Ellison reiterated that he is “firmly committed” to that goal.

The ambitious release schedule would be a significant increase in production for both studios. Warner Bros. now averages just over seven theatrical releases per year, while Paramount averages slightly more than six. Producing a total of 30 new movies for theatrical release each year would entail a 220 percent increase in investment, or an additional $1.5 billion per annum.

Our analysis estimates that producing 30 films would generate more than $12 billion in total economic activity. That includes about $2.7 billion in direct studio spending and another $9.5 billion in indirect and induced effects across the broader economy. 

This increased production activity would, we estimate, directly support over 7,000 jobs and sustain an additional 39,000 jobs in upstream and downstream industries. It would also generate an estimated $1.9 billion in federal, state, and local tax revenues. 

When Americans buy a ticket to see a movie, it creates a raft of economic benefits that extend far beyond Hollywood. Theaters hire workers, who in turn spend their wages in their community; restaurants near theaters serve more customers; and local businesses see increased foot traffic. All of these ultimately boost economic activity. What’s more, all of this activity generates tax revenue for state and local governments as well. 

Once those films go to theaters, they generate another round of economic activity. We estimate nearly $7.4 billion in GDP-related effects–with $2.6 billion directly in the movie theater industry–related to the distribution of 30 films annually. In addition, over 25,000 jobs in movie theaters would be supported and nearly 20,000 more in related industries.

The combined production and distribution effects of 30 annual films total over $20 billion in additional economic activity and the creation of over 90,000 jobs across the nation.

Ellison’s commitment to preserving the theater-going experience takes on heightened importance in the wake of Netflix’s announcement that it will no longer work with directors who want to make theatrical releases.     

The entertainment industry has been in decline since the Covid pandemic, with film and television production employment 30 percent below 2022-level highs. The slump has cost California as much as $1 billion in lost revenue.

While opponents may stoke fears that any consolidation in Hollywood would mean fewer jobs and less opportunity, our analysis finds that the Paramount–Warner Bros. merger would actually provide a boost to the entertainment industry and broader economy. 

The notion that people would rather watch movies at home has been in existence since the advent of the television, but moviegoers keep proving it wrong. A studio committed to increasing the number of productions for theaters will be a boost for the entertainment industry and the overall economy. 

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

Ike Brannon is a senior fellow at the Jack Kemp Foundation