Paramount is considering leaving California as its legal battle with the state over its proposed $110 billion acquisition of Warner Bros. Discovery approaches a key deadline, according to multiple reports.
Sources close to the company told Deadline that Paramount is “deadly serious” about relocating its headquarters and other operations outside California, potentially ending the studio’s roughly century-long presence in Hollywood.
Paramount CEO David Ellison has threatened to move the company if California Attorney General Rob Bonta and other state officials do not reach an agreement with the studio over the pending merger.
Texas, Tennessee and Georgia have been identified as potential destinations for the company if it follows through with the move. Ellison has set an Oct. 1 deadline for reaching a resolution, according to reports.
The Daily Mail reported that Los Angeles Mayor Karen Bass and Bonta were among officials informed that Paramount had already put down a deposit on moving trucks. The company had reportedly been preparing to announce a California departure Tuesday, although no announcement ultimately came.
TMZ subsequently reported that negotiations had resumed Wednesday after Paramount had previously told California negotiators that it was finished with the talks. A source described discussions as being back in a “constructive place,” while saying the situation remained critical.
The dispute stems from an antitrust lawsuit filed in July by Bonta and attorneys general from 11 other states seeking to block Paramount’s acquisition of Warner Bros. Discovery.
The California Department of Justice argues that the merger would substantially reduce competition in film distribution and cable television. The state says a combined Paramount-Warner Bros. company would control nearly one-third of theatrical movie distribution and nearly one-third of basic cable programming in the US.
A federal court has temporarily prevented the companies from completing the transaction. Paramount and Warner Bros. later agreed not to merge until June 1, 2027, or until five days after a court decision on the states’ challenge, whichever occurs first.
Paramount, meanwhile, has argued that delays are creating significant financial costs. The company says it faces a $7 million-per-day fee if the transaction is not completed by the end of September and has asked the court to require the states challenging the merger to post a $1.88 billion bond. Reuters reported Tuesday that the Justice Department supported requiring a bond, though it did not endorse a specific amount.
A Paramount departure could also have a significant economic impact on California.
A study by the Los Angeles County Economic Development Corp. estimated that a complete relocation could result in the permanent loss of between 28,990 and 57,980 full-time jobs statewide.
The analysis estimated annual losses of between $10.6 billion and $21.2 billion in economic output if Paramount moved its headquarters and operations out of California.
State and local tax revenue could also decline by an estimated $585 million to $1.17 billion annually, according to the report.
Bonta has maintained that Paramount itself would be responsible for any decision to relocate, per the Daily Mail.
“What Paramount decides to do is Paramount’s choice alone,” Bonta said, adding that his office would continue enforcing antitrust law while remaining open to negotiations.
Bass’ office also said the mayor has been focused on protecting entertainment industry jobs in Los Angeles and would continue working to keep Hollywood production and employment in the city.
As of Wednesday night, Paramount had not formally announced plans to leave California, and negotiations over the merger dispute remained ongoing.
