Paramount could be preparing to leave California as its battle with the state’s Attorney General over the proposed Warner Bros. Discovery merger continues to escalate. According to Deadline, Paramount CEO David Ellison told a group of the company’s top executives last week that the company will begin the process of leaving California on October 1 if California Attorney General Rob Bonta refuses to negotiate a settlement to the state’s antitrust lawsuit challenging the planned $111 billion merger.
The report, which was first published by Puck and confirmed by Deadline, adds another dramatic turn to the increasingly contentious fight over Paramount’s proposed acquisition of Warner Bros. Discovery.
Ellison reportedly emphasized that he does not want to leave California, but said he no longer feels welcome in the state as Paramount and Bonta continue their increasingly public battle over the merger.
Bonta, meanwhile, has already responded forcefully to the reported threat. “In a span of weeks, Paramount agreed to halt the merger until a court decision or until June 2027, asked for a November trial, and is now back with another attempt to blackmail the state into letting an illegal deal through. Paramount has lost the plot as it continues to lose in court. It didn’t work the first time — on the eve of our July lawsuit — and it won’t work this time.“
The October 1 deadline isn’t arbitrary. Under the terms of the proposed Warner Bros. Discovery deal, Paramount will begin accruing a $7 million-per-day ticking fee on October 1 if the transaction has not closed by then. Every additional day the merger remains unresolved will cost Paramount millions of dollars.
The proposed transaction has already been approved by the U.S. Department of Justice and international regulators, including authorities in the European Union and United Kingdom. However, Bonta is leading a group of 20 state Attorneys General challenging the deal on antitrust grounds.
The case is currently scheduled to go to trial in March 2027 in federal court in California. Paramount had previously asked the judge to move the trial to November.
The California-led lawsuit focuses on antitrust concerns involving three areas of the entertainment business: wide-release films, blockbuster films, and cable network programming.
Paramount has argued that the combined company would continue to provide significant competition in the theatrical market. Ellison has also promised that the merged studio would release 30 films per year, with significant theatrical windows. He has reportedly offered to put that commitment in writing and negotiate additional concessions with the state.
So far, those efforts have not convinced Bonta to drop the lawsuit. The California Attorney General has accused Paramount of attempting to pressure the state into allowing what he considers an illegal merger. Paramount, meanwhile, has accused Bonta of playing politics.
The two sides have increasingly taken their battle into the court of public opinion, with Bonta recently accusing Paramount and Warner Bros. Discovery of focusing on public relations rather than the facts of the antitrust case.
If Ellison follows through on the reported plan, the relocation would reportedly begin with Paramount’s headquarters before potentially expanding to studio jobs. The company could ultimately move Paramount (or the combined Paramount-Warner Bros. Discovery operation) out of California regardless of how the federal trial turns out. Several states have already been mentioned as possible destinations, including Tennessee, Texas, and Georgia, all of which could offer financial incentives to lure Paramount away from California.
Rumors that Ellison was considering leaving California have circulated for months, but the reported October 1 timetable would represent a major escalation. For Hollywood, the implications could be substantial. Paramount is one of the industry’s historic studios and has maintained a major presence in California for decades.
The California lawsuit isn’t the only thing putting pressure on Paramount. If the Warner Bros. Discovery transaction collapses, Paramount would owe WBD a $7 billion termination fee, reportedly the largest such fee in corporate history, unless Warner Bros. Discovery agrees to renegotiate the terms.
Warner Bros. Discovery can also walk away from the deal if it has not closed by June 4 next year.
The combination of the ticking fee, the potential termination fee, and the ongoing antitrust litigation puts enormous pressure on Ellison and Paramount to find a resolution. That helps explain why the battle with California has become so heated.
Despite the reported relocation plan, Ellison is making it clear that he doesn’t actually want Paramount to leave California. The issue, according to Deadline’s reporting, is that he believes the company is no longer being welcomed by the state while Bonta continues to oppose the merger.
Bonta has previously characterized Paramount’s threats to leave as an attempt to “blackmail” his office and the other Attorneys General into approving the deal, and his latest response suggests that position hasn’t changed.
The conflict is also unfolding at a time when California is actively trying to keep film and television production in the state. On Monday, the California Film Commission announced that Paramount productions including the Clueless series starring Alicia Silverstone and Ascent, a corporate-fixer series starring EGOT winner Viola Davis, had received nearly $38 million in California tax incentives through the state’s expanded production tax-credit program. That creates an interesting backdrop for the current fight: California is offering big incentives to keep productions from leaving even as one of Hollywood’s most famous studios threatens to move its headquarters and jobs elsewhere.
For now, Paramount remains in California and the Warner Bros. Discovery merger remains tied up in litigation. But if Bonta refuses to negotiate, October 1 could mark the beginning of a very different future for Paramount.