Paramount Global CEO David Ellison has signaled he may move the studio’s operations out of California if a $111 billion merger with Warner Bros. Discovery is blocked by a 12-state antitrust lawsuit led by California Attorney General Rob Bonta.
In a recent development, Ellison’s associates confirmed to the Los Angeles Times that he has prepared contingency plans to sell Paramount’s historic studio lots and relocate the company’s headquarters to Tennessee or Texas as early as this fall. The move would mark a significant shift for Hollywood, where Paramount’s presence dates back to classics like Sunset Boulevard, The Godfather, and Beverly Hills Cop.
Bonta rejects relocation threats as ‘blackmail’
California’s antitrust lawsuit, filed in collaboration with 11 other Democratic state attorneys general, has stalled the largest Hollywood merger in decades. Bonta called Paramount’s attempt to deter the lawsuit by threatening relocation a form of “blackmail,” though he did not specify legal consequences for such a move.
Paramount has not publicly commented on the relocation plans. However, sources familiar with the situation told the L.A. Times that Ellison, who has spent two decades building his career in Hollywood, does not want to leave Los Angeles but feels compelled to act if the merger is not finalized by next month.
Industry leaders warn of economic impact
The potential relocation has raised concerns among California lawmakers and industry leaders. Assemblymember Rick Chavez Zbur, whose district includes the Melrose Avenue movie lot and areas near Warner Bros. in Burbank, called the prospect “devastating” for the state’s economy.
“These are important jobs in California’s iconic industry,” Zbur said in a statement. “We need to do everything we can to protect them.”
The warning comes amid broader declines in film production in California, with job losses, empty soundstages, and shuttered small businesses already straining the region’s economy. The state’s film industry has faced competition from other states offering tax incentives and lower costs, further pressuring Hollywood’s dominance.
Background: The merger and antitrust battle
Paramount Global, which owns CBS, MTV, and Nickelodeon, announced plans to merge with Warner Bros. Discovery in February 2024. The deal, valued at $111 billion, would create one of the largest media conglomerates in the world, combining Warner Bros.’ film and television assets with Paramount’s extensive library and production capabilities.
The antitrust lawsuit, filed in July 2024, argues that the merger could reduce competition in the streaming and cable news markets, particularly for CNN, which is owned by Warner Bros. Discovery. The lawsuit cites concerns over potential monopolistic practices, though it does not explicitly name Ellison’s political affiliations as a factor.
Ellison, whose father is media mogul Larry Ellison and whose sister is Oracle co-founder Safra Catz, has faced scrutiny over his leadership at Paramount. Some critics have pointed to his past association with former President Donald Trump and his hiring of journalist Bari Weiss to lead CBS’s 60 Minutes as evidence of a right-leaning bias in the company’s news division.
However, the lawsuit does not reference these personal or political connections in its legal arguments. Instead, it focuses on the potential market impact of the merger, including concerns over reduced competition in news and entertainment content.
What’s next?
The lawsuit is currently stalled in court, with no immediate timeline for resolution. If the merger is blocked, Ellison has indicated he may proceed with relocation plans, which could result in the loss of thousands of jobs and a significant economic blow to California’s entertainment industry.
For now, the state’s leaders are weighing their next steps, with some calling for a compromise to keep Paramount in California while others argue that the antitrust concerns justify the lawsuit’s continuation.