Paramount’s CEO, David Ellison, is contemplating relocating the studio out of California. This consideration arises from the ongoing high-stakes antitrust lawsuit concerning Paramount’s planned merger with Warner Bros. Discovery (WBD). The potential move to states like Georgia, Tennessee, or Texas comes if California Attorney General Rob Bonta does not negotiate a settlement by October 1. Ellison is reportedly in discussions with several states regarding this possibility.
The legal challenge led by Bonta involves 11 states aiming to block the $111 billion merger. Without a swift resolution, Ellison faces a substantial financial burden, including a multimillion-dollar “ticking fee” to WBD. This fee arises because the antitrust trial is scheduled for March 2027, potentially costing Paramount at least $650 million quarterly until the matter is resolved.
Ellison’s commitment to relocating the studio remains firm, regardless of the lawsuit’s outcome. He has developed a five-year plan to move most jobs out of California while maintaining some presence in Hollywood. Bonta criticized this approach, accusing Paramount of trying to “blackmail” the state.
Bonta stated, “Paramount’s tactics are an attempt to pressure the state into approving an illegal merger. My office is dedicated to preventing illegal consolidation to protect California’s economy.”
The lawsuit, filed in the U.S. District for the Northern District of California, claims that the merger would violate Section 7 of the Clayton Act. This section states that mergers reducing competition or creating monopolies are illegal. The lawsuit asserts that the merger would result in higher prices and less content availability, negatively impacting movie theaters, cable distributors, and audiences.
The merger, originally set to conclude this year, faces delays until at least June 2027. Bonta, at a recent Politico conference, expressed openness to negotiations with Paramount if the company implements “structural remedies.”
Bonta has also faced accusations of conflict of interest. His challenger, Michael Gates, suggests a financial link to Netflix influenced Bonta’s lawsuit decision. Campaign finance records show that Patty Quillin, the wife of Netflix co-founder Reed Hastings, donated $1 million to a committee supporting Bonta.
Netflix had previously explored acquiring Warner Bros. Discovery before Paramount’s offer. If realized, Paramount’s bid to merge with Warner Bros. Discovery would combine two significant Hollywood studios, including their TV networks, under one corporation. Critics argue that such consolidation could harm the industry and lead to mass layoffs. Concerns persist about potential changes in media coverage, particularly CNN’s perceived editorial direction.
Ellison publicly addressed these concerns, assuring CNN’s editorial independence post-merger. Despite being politically diverse, he emphasized a commitment to objective journalism focused on facts and truth.
The merger follows Ellison’s purchase of Paramount for $8 billion, merging it with Skydance Media. Fox News Digital reached out to Paramount and Bonta’s office for comments but did not receive an immediate response.
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