Paramount executives have reportedly discussed relocating the studio out of California as a contingency plan amid an antitrust battle initiated by a coalition of state attorneys general. The prospect of a move to states like Tennessee or Texas was reportedly raised by Paramount CEO David Ellison in a meeting with top lieutenants.
The discussions arose as California Attorney General Rob Bonta leads an antitrust case against a potential merger between Paramount and Warner Bros. Discovery. While some reports framed the relocation idea as a threat, a source familiar with the meeting described it as a "spirited conversation" and a "contingency plan" rather than an ultimatum.
California's high tax rates, which can reach 13.3% for top earners, are a significant factor in the consideration. Both Tennessee and Texas do not levy a state income tax. For an executive earning $1 million annually, this could mean an extra $133,000 per year. Additionally, the cost of living, reflected in real estate prices, is considerably lower in Nashville and Austin compared to Los Angeles.
This potential exodus is not a new consideration for the studio. Larry Ellison, David Ellison's father and a billionaire known for his disdain for California, has reportedly discussed moving Paramount out of the state for years. He relocated Oracle's corporate base from Silicon Valley to Texas in 2020 and has a significant presence in Austin. The idea of relocating Paramount has been a long-term roadmap, with discussions predating the current lawsuit.
Both Texas and Tennessee have actively courted Paramount. Tennessee's Deputy Governor has formally invited the studio to consider relocating to the Volunteer State. David Ellison has also engaged in conversations with Texas politicians, including Attorney General Ken Paxton, about potential moves to the Lone Star State. Paramount already has a presence in Texas through Paramount Television's leased soundstages and Oracle's significant investments in the state, including a large corporate campus in Austin and a massive artificial intelligence data center campus in Abilene.
Nashville is considered a likely destination due to Paramount's ownership of the Nashville-based Country Music Television and David Ellison's personal history in the city. He briefly lived there full-time and maintained a home for over a decade. However, securing such a move would likely require substantial incentives and assurances from the prospective states.
While the potential relocation could be significant for California's entertainment industry, some real estate experts suggest that high earners might maintain a presence in Los Angeles even if they spend most of their time elsewhere. Others believe a major studio's departure could have a ripple effect on the Los Angeles real estate market, particularly in areas populated by entertainment executives. The changing landscape of the entertainment industry may lead to a more distributed model, with various cities capturing different aspects of the business.
California Attorney General Rob Bonta has stated his willingness to negotiate a settlement with Paramount, provided the studio offers "structural remedies." However, he has expressed skepticism about Paramount's assurances regarding the release of 30 films annually under a combined entity with Warner Bros. Discovery, calling it an "old stale promise."