Paramount's board has approved a plan to relocate the Hollywood studio out of California if state Attorney General Rob Bonta does not agree to settlement talks in his antitrust case by October 1. CEO David Ellison informed his leadership team that the company would move to Tennessee, Texas, Georgia, or another state if Bonta refuses to negotiate over the $110 billion acquisition of Warner Bros. Discovery. Ellison set the October 1 deadline due to a "ticking fee" tied to the Warner Bros. deal, which is set to start at $7 million per day on that date. He indicated that Paramount or the combined company would leave California regardless of the litigation's ultimate outcome if negotiations do not commence.
Ellison outlined a potential five-year relocation strategy that could shift most studio jobs out of the state. He estimated that leaving California could save Paramount $500 million annually in taxes. The company is already in contact with multiple states that may offer incentives to finance the move. Paramount could also raise capital by selling its studio lots, which are valued as high as $4 billion, though the value may decrease given the current Los Angeles production market.
Paramount would maintain a creative presence in Hollywood, as many talent partners and vendors remain there, while executives and business operations would relocate. Ellison stated he still prefers the combined company and its approximately 30,000 jobs to remain in Southern California. However, he argued that relocation is a preferable alternative to cutting content spending or restructuring the company to manage the costs of fighting the state and paying quarterly ticking fees, which amount to roughly $650 million.
The relocation plan represents a significant escalation in the dispute between Ellison and Bonta, who is leading a federal antitrust lawsuit joined by California and 11 other states to block the Warner Bros. acquisition. Bonta's office criticized the move, calling it an "attempt to blackmail the state into letting an illegal deal through." Despite this, Ellison expressed confidence in Paramount's ability to win the case and complete the Warner Bros. deal, though his remarks reportedly caused concern among some members of Paramount's leadership team worried about uprooting their families.
Paramount previously proposed a consent decree with 12 concessions, including commitments to keep both the Paramount and Warner Bros. lots operational, release 30 films annually through the studios, offer a minimum 45-day theatrical window, and a 90-day window before movies move to Paramount+. AMC Theatres and Regal's owner Cineworld have backed the merger following this proposal, while Cinemark's board is expected to consider its position. Bonta, however, has resisted these overtures, reportedly seeking major structural remedies rather than the concessions offered by Paramount.