Paramount Pictures is threatening to pack up and leave California if the state does not drop its legal fight against the company’s planned $110 billion merger with Warner Bros. Discovery. The dispute has turned into a public war of words between Paramount CEO David Ellison and California Attorney General Rob Bonta, with Bonta calling the company’s threat “blackmail.”
The entertainment giant says it will begin the process of moving its headquarters and studio operations out of California as early as October 1 if Bonta refuses to negotiate a settlement in the antitrust lawsuit blocking the deal. Ellison has reportedly put together a five-year plan to shift most of the film and TV studio’s jobs to a new home, with Texas, Georgia, and Tennessee mentioned as possible destinations.
The $110 Billion Merger That Started It All
The battle began when Paramount outbid Netflix in a high-stakes competition to acquire Warner Bros. Discovery for $110 billion last year. The deal would create one of the largest media companies in history, combining legendary franchises like Harry Potter, Batman, Mission: Impossible, and Top Gun alongside TV giants like CNN, MTV, and Nickelodeon.
The merger received approval from the U.S. Department of Justice in June and has also been cleared by regulators in Britain and the European Union. However, California and 11 other states — all with Democratic attorneys general — filed a lawsuit in July to block the transaction.
The states argue that the merger would create a media behemoth with too much control over film distribution and cable television, leading to higher prices for consumers and fewer choices. California Attorney General Rob Bonta claimed the deal would harm “audiences on every sofa and movie theater seat in the US.”
Ellison Sets October 1 Deadline
David Ellison, whose father is Oracle co-founder Larry Ellison, held a lunch meeting with his 12-member executive leadership team on the Paramount lot last week. He told them he would start moving the company out of California on October 1 if Bonta does not agree to settlement talks.
The October 1 date is significant because it is when Paramount will begin accruing a “ticking fee” of $7 million per day payable to Warner Bros. Discovery shareholders if the merger has not closed. With the trial in the antitrust case scheduled to start March 2, 2027, Paramount could end up paying around $1.2 billion to Warner Bros. shareholders by the time the trial concludes.
Ellison reportedly told his executives he remains confident Paramount will win the antitrust case. But if Bonta refuses to negotiate, Paramount will start packing up and moving out of the Golden State in less than two months. The move would start with the company’s Los Angeles headquarters, with tax incentives from other states possibly helping to cover the relocation costs.
Bonta Fires Back: ‘Paramount Has Lost the Plot’
California Attorney General Rob Bonta responded forcefully to Ellison’s threat, accusing the company of trying to “blackmail” the state.
“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.”
Bonta added that the merger “will result in higher costs, fewer options, and fewer people making movies.” He said his office remains committed to “stopping illegal consolidation and protecting a vibrant California economy for businesses that play by the rules.”
When asked about potential job losses if Paramount leaves California, Bonta said he was not concerned. “Our efforts to block the merger is what will deliver wins for California,” he said.
However, speaking at a Politico conference later in the day, Bonta did signal a willingness to negotiate if Paramount implements “structural remedies” — meaning divestments rather than behavioral promises like production quotas.
Where Could Paramount Go?
Ellison has been in contact with multiple states about a potential move, with Tennessee, Texas, and Georgia all mentioned as options.
Tennessee appears to be a strong contender. Larry Ellison’s Oracle is already in the process of moving to Nashville, and David Ellison is seriously considering that state, according to sources.
The move would be a massive blow to California, as one of the major Hollywood studios shifts thousands of jobs out of state. Ellison’s five-year plan would involve selling the Paramount lot, moving executives and business functions out of state, while retaining some kind of presence in California.
Legal Battle Heads to Trial
The antitrust case is moving forward. A federal judge in California issued a temporary restraining order in July, pausing the merger while the case proceeds. Both sides have agreed to cancel a preliminary injunction hearing, with the case now headed toward a full antitrust trial.
Paramount has agreed not to close the Warner buyout until either a court ruling is made on the states’ claims or June 1, 2027. The company said in a statement that delaying the transaction “will only harm entertainment workers who have already suffered over recent years as technology has disrupted their livelihood and cost California tens of thousands of entertainment jobs.”
Paramount has also offered two of the largest theater chains, AMC Entertainment and Cineworld’s Regal Cinemas, written commitments to release at least 30 movies per year in theaters to address competition concerns.
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What Happens If the Merger Fails
If the 12 state attorneys general successfully block the merger, Paramount will be required to pay a $7 billion termination fee to Warner Bros. Discovery. The company is also facing a ticking fee of $7 million per day starting October 1, which could add up to more than $1 billion by the time the trial concludes next year.
The case highlights the growing tension between federal and state antitrust enforcement. While the Trump administration’s Justice Department approved the merger, Democratic state attorneys general have stepped in to challenge it, arguing that federal regulators have largely abdicated their antitrust responsibilities.
For now, the fate of the $110 billion merger — and whether Paramount will remain in California — hangs in the balance, with an October 1 deadline fast approaching.
Also Read: Paramount and Warner Bros. Discovery Merger Gets UK Approval, But US Trial Remains
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