Paramount is “deadly serious” about leaving California if state officials do not drop their legal challenge to the studio’s proposed $110 billion merger with Warner Bros Discovery, according to people inside the company.
Chief executive David Ellison has warned that Paramount could abandon its Hollywood base of almost a century and relocate to Texas, Georgia or Tennessee unless an agreement is reached by October 1.
The threat appeared to become more concrete this week after Los Angeles Mayor Karen Bass and California Attorney General Rob Bonta were reportedly told that a deposit had been placed on moving trucks.
Paramount was said to be preparing to announce its departure, but no announcement was made. The company has not publicly confirmed that it is leaving California.
Bonta and 11 other state attorneys general have filed an antitrust lawsuit seeking to block the proposed merger. Bonta has accused Paramount of using the prospect of leaving California as “blackmail” to build public support for the deal.
“It’s no secret that Paramount has been making this threat, despite its alleged commitment to California and Hollywood,” Bonta said.
“What Paramount decides to do is Paramount’s choice alone. We’ll continue to apply the law without fear or favor and continue to be open to coming to the table for good faith discussions,” he added.
Paramount’s possible departure could cost thousands of jobs
The economic consequences for California could be substantial if Paramount moves out of Hollywood.
A report by the Los Angeles County Economic Development Corporation’s Institute for Applied Economics estimated that the relocation could result in the loss of between 28,990 and nearly 58,000 full-time jobs.
It also estimated that California could lose between $10.6 billion and $21.2 billion in annual economic output, while state and local tax revenue could fall by about $585 million to $1.17 billion each year.
California Republican Party chairwoman Corrin Rankin criticised Bonta, saying he “wants to play antitrust crusader while California jobs hang in the balance”.
“If Paramount walks and thousands of jobs go with it, he won’t get to blame Hollywood, the buck stops with him. Stop grandstanding, negotiate the protections and make a deal,” she said.
Bonta has said Paramount was being unreasonable during negotiations. His office declined to comment on the company’s reported plans.
A spokeswoman for the Los Angeles mayor said Ms Bass had been “focused on protecting and fighting for jobs in LA, including critical jobs in the entertainment industry that have been a vital part of Los Angeles’ economy”.
“She’s been engaged on this issue and will continue to fight to make sure LA is home to Hollywood,” the mayor’s office said.
Paramount’s threatened departure would follow a series of major companies that have moved out of California, including KB Home, Chevron, Charles Schwab, Oracle and Palantir, as well as Elon Musk’s Tesla, SpaceX and X.
Charles Schwab cited the high cost of doing business in California when it moved to Texas, while Palantir relocated first to Colorado and then Florida after a threat of a “billionaire tax”.
