Paramount CEO David Ellison is threatening to move the studio's headquarters out of California if the state's Attorney General Rob Bonta does not negotiate a settlement in the antitrust lawsuit that is currently stalling Paramount's $111 billion merger with Warner Bros. Discovery (WBD).
Ellison has reportedly been in contact with several states, including Georgia, Tennessee, and Texas, as potential relocation sites. The deadline for a settlement is October 1. Failure to reach an agreement could result in Paramount paying WBD a multi-million dollar "ticking fee" if the merger remains in limbo. The antitrust trial is not scheduled until March 2027, and the delay could cost Paramount an estimated $650 million quarterly if no settlement is reached by next spring.
According to reports, Ellison is considering moving Paramount, and potentially Warner Bros. should the merger proceed, out of California regardless of the lawsuit's outcome. A five-year plan has been developed that would relocate the majority of jobs while maintaining a presence in Hollywood.
Attorney General Bonta has criticized Ellison's actions, labeling them as an attempted "blackmail." He stated, "Paramount has lost the plot as it continues to lose in court." Bonta reiterated his office's commitment to preventing what he calls an "illegal consolidation" and protecting California's economy.
Bonta's lawsuit, filed in the U.S. District Court for the Northern District of California, claims the merger would lead to higher prices, reduced content quality, and fewer options for consumers and businesses in the film and television industry. The suit alleges the merger violates Section 7 of the Clayton Act, which prohibits mergers that could substantially lessen competition or create a monopoly. The merger, initially expected to close this year, has been temporarily delayed by Judge Araceli Martínez-Olguín until at least June 2027.
Bonta has faced accusations of a conflict of interest from his Republican challenger, Michael Gates. Gates has questioned whether financial ties to the family of Netflix co-founder Reed Hastings influenced Bonta's decision to pursue the lawsuit, pointing to a $1 million contribution to a political action committee that supported Bonta and other progressive prosecutors.
The potential merger has also raised concerns among CNN staffers and media critics. Some fear that under new ownership, CNN, along with CBS, could shift its news coverage. In an op-ed published in The New York Times, Ellison addressed these concerns, stating his belief in factual news reporting and assuring that CNN would maintain editorial independence. He wrote, "Great news organizations like CNN and CBS News are here to tell it straight down the middle."
This proposed deal follows Ellison's acquisition of Paramount last year for $8 billion, merging it with Skydance Media. Bonta, however, signaled a potential willingness to negotiate if Paramount implements "structural remedies."