Paramount has informed the offices of Los Angeles Mayor Karen Bass and California Attorney General Rob Bonta that it is preparing to leave the state amid a legal battle over its $110 billion merger with Warner Bros. Discovery.
A Paramount spokesperson had no comment when asked about the plans, while a spokesperson for Bass told TheWrap she is “focused on protecting and fighting for jobs in L.A., 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 L.A. is home to Hollywood,” the spokesperson added.
A spokesperson for Bonta’s office declined to comment on Paramount’s plans, but told TheWrap it’s “no secret that Paramount has been making this threat, despite its alleged commitment to California and Hollywood.”
“What Paramount decides to do is Paramount’s choice alone,” the spokesperson added. “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.”
News of the notification to Bass and Bonta’s offices was first reported by TMZ Wednesday, who said a formal announcement from Paramount was originally slated for as early as Tuesday, but did not end up happening.
The Los Angeles Economic Development Corporation estimates Paramount moving out of the state could result in the loss of up to $21.2 billion in annual economic output, 57,980 full-time jobs and $1.17 billion in state and local tax revenues.
Meanwhile, an analysis ordered by the LA County Board of Supervisors estimates that the merger closing could put 4,500 local TV and film jobs and over 5,800 indirect or induced jobs from related small businesses at risk over the next three years.
The economic impact of losing these jobs would be $1.26 billion in wages, $2.78 billion in economic value, $4.06 billion in total business output and $547 million in tax revenue, including $78.6 million in local taxes — most of which (63%) comes from property taxes.
If Paramount ends up leaving the state, insiders previously told TheWrap that it would likely set up shop in Nashville or Atlanta.
Paramount CEO David Ellison has already received an invite from Tennessee to set down roots in the Volunteer State. Nashville is notably home to Oracle, the software giant co-founded by David’s father Larry Ellison, which is building a new headquarters in the state.
Meanwhile, a Georgia Film Office spokesperson previously said it “welcomes any such conversations” with Paramount as a major film production hub with long-term relationships with industry partners, but declined to comment on private correspondence.
Texas has also thrown its hat in the ring, with Gov. Greg Abbott’s press secretary Andrew Mahaleris previously telling TheWrap it offers “the best business climate in America” with no corporate or personal income taxes. It is also, of course, the production hub of Paramount’s popular Taylor Sheridan suite of shows.
The renewed threat to move comes as Paramount is set to hold settlement talks with the states and WGA on Oct. 14 and 15 in an effort to find a possible resolution. The discussions, which are standard course as part of the legal proceeding, do not guarantee that a settlement will be reached. A 12-day antitrust trial over the matter will begin in March.
Among those who have publicly called for a settlement include Bass, California Gov. Gavin Newsom and the Democratic nominee in California’s gubernatorial race Xavier Becerra, as well as the Directors’ Guild of America and IATSE. Cinemark and the CEOs of AMC Theaters and Regal also came out in support of the merger, as did Lionsgate CEO Jon Feltheimer.
Meanwhile, over 5,000 Hollywood voices, including prominent names like Jane Fonda, Mark Ruffalo and hundreds of other A-listers, penned a letter opposing the merger. Also speaking out against the merger was SAG-AFTRA and Hollywood’s Teamsters union.
Paramount has agreed to delay the closing of the merger until five days after the outcome of a trial, or June 1, 2027, whichever comes earliest. But Ellison threatened to begin the process of leaving California if a settlement could not be reached by Oct. 1, when it will start accruing a $7 million per day ticking fee for every day the merger doesn’t close.
Paramount has also requested that the state AGs and WGA post a $1.9 billion bond to cover the ticking fee and other costs during the delay, with arguments on the matter set to be heard at a hearing on Sept. 24.
The outside date on the merger is set for June 4, 2027. If the deal does not close at all due to regulatory matters, Paramount would be on the hook to pay a $7 billion breakup fee to WBD.
