Paramount's chief is ready to relocate the storied studio out of California starting October 1 if the state's attorney general refuses to negotiate a settlement in the antitrust case blocking a $111 billion merger with Warner Bros. Discovery.
David Ellison gathered his 12-member senior executive team at the Paramount Pictures lot on Melrose Avenue in Hollywood on August 5 and laid out the plan: if California Attorney General Rob Bonta does not come to the table on settlement talks before September 30, Paramount will begin moving its Los Angeles headquarters out of state. Georgia, Texas, and Tennessee top the list of possible destinations. Variety first detailed the scope of Ellison's ultimatum, which includes a five-year plan to shift most studio jobs out of California, and the possible sale of the Paramount Studios lot itself.
The Paramount Skydance board has already approved the move, Ellison told his team, which included studio bosses Dana Goldberg and Josh Greenstein along with CBS and TV media chair George Cheeks. The message was blunt: California's regulatory hostility has made the state a liability, and the company has a fiduciary duty to go where it is wanted.
The financial math behind Ellison's deadline is stark. Under the terms of the Paramount-Warner Bros. Discovery merger agreement, Paramount will owe WBD shareholders a "ticking fee" of $7 million per day beginning October 1 if the deal has not closed. By the time the states' antitrust trial is scheduled to wrap up, it is set to begin March 2, 2027, that tab could exceed $1.2 billion.
And the downside is even steeper. The Washington Examiner reported that if the merger collapses entirely because of the antitrust case, Paramount faces a $7 billion termination fee owed to Warner Bros. Discovery. That is not a rounding error. It is an existential number for a company with roughly 17,600 employees worldwide, a company that would be merging with WBD's 35,500-person workforce if the deal goes through.
Ellison's father, Oracle founder Larry Ellison, has personally guaranteed $46.7 billion toward the megadeal. Sovereign wealth funds from Saudi Arabia, Qatar, and the United Arab Emirates have committed another $24 billion, which would give them a combined 38.5 percent ownership stake in the merged entity. Paramount's SEC filings state that those foreign investors will hold no board seats and no voting shares, a structure the company says means no U.S. government review of the deal's foreign financing is warranted.
Bonta, a Democrat, wasted no time firing back. In a post on X, the attorney general dismissed Ellison's threat as recycled leverage:
"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."
He called the planned exit an "attempt to blackmail the state into letting an illegal deal through." Bonta has also said publicly that the merger "will result in higher costs, fewer options, and fewer people making movies." Twelve state attorneys general, all from blue states, have joined the antitrust suit seeking to block the deal, alleging it would extinguish competition in Hollywood and shrink consumer choices.
But Bonta's position carries its own contradictions. He has not publicly stated what concessions from Paramount-WBD he would accept to settle the case. He has said only that any remedies would need to be "structural", meaning divestitures, such as selling off business units, rather than "behavioral," like guaranteeing certain production quotas. That framing gives Bonta maximum leverage and minimum accountability: he can reject any offer without ever saying what a yes would look like.
Fox News reported that Bonta faces conflict-of-interest questions of his own. Netflix co-founder Reed Hastings' wife contributed $1 million to a PAC supporting Bonta, and Netflix had previously been in negotiations to purchase Warner Bros. Discovery. If the Paramount-WBD merger dies, Netflix, a direct competitor, stands to benefit. Bonta has denied the lawsuit is politically motivated, but the financial connections raise questions that his office has not fully addressed.
The irony of the standoff is that California has been subsidizing Paramount even as its attorney general works to block the company's biggest deal. In the most recent round of the state's Film and Television Tax Credit Program, Paramount received roughly $37 million. That includes $21 million for the Viola Davis thriller "Ascent" and $16 million for a "Clueless" sequel series produced by CBS Studios.
Those credits are supposed to keep production, and jobs, in California. Ellison's threat to leave exposes the contradiction: the state hands Paramount tens of millions in incentives with one hand while using the other to sue the company into submission.
Ellison told his team he expects Paramount to prevail in the antitrust case. But he is not waiting around to find out. The five-year relocation plan he outlined would shift most studio jobs to states with lower taxes and friendlier business climates. Tax incentives from those states would help cover relocation costs, he said. He even floated selling the iconic Paramount Studios lot in Hollywood or the Warner Bros. Studio lot in the Los Angeles area, a move that would sever nearly a century of history between the studio and the city.
The relocation threat extends beyond California. Newsmax reported that Ellison is considering moving CBS News operations out of New York City, potentially to Atlanta, already home to CNN. One unnamed media executive familiar with Paramount's plans put it plainly: "The real negotiation is how much he will move out of California and New York of his current operations. If it involves a lot of production, that's a lot of jobs."
Paramount's SEC-listed principal executive offices sit at 1515 Broadway in New York, a holdover from the former Paramount Global corporate structure. A move to Atlanta would put CBS News in the same city as its soon-to-be sibling network under the merged company, if the merger survives.
Paramount's chief legal officer, Makan Delrahim, has reinforced Ellison's position. Just The News reported Delrahim's comments framing the potential exit as a business decision, not a tantrum:
"You have to take a look at the business environment and look to see what's best for not only the community and the business. And ultimately, you know, go to the place where you're wanted."
Delrahim added that there is "a point at which you have a fiduciary duty to shareholders." That language matters. It reframes the relocation not as retaliation but as a legal obligation to protect shareholder value, a harder argument for Bonta to dismiss in court or in public.
Ellison is not bluffing from weakness. He founded Skydance Productions in 2006 at age 23, and its debut film, "Flyboys," flopped critically and commercially. But he rebuilt methodically, partnering on franchise blockbusters including multiple "Mission: Impossible" films and "Top Gun: Maverick," which crossed $1 billion at the global box office in 2022. After merging with Paramount, Skydance absorbed MTV, Comedy Central, Nickelodeon, and CBS. The Warner Bros. Discovery deal would add HBO, CNN, HGTV, and the Food Network to that empire. The Associated Press chronicled Skydance's two-decade rise, with one Los Angeles entertainment attorney calling it "nothing less than incredible."
That track record gives Ellison credibility when he tells his senior team the company will move. He has made big bets before and followed through.
The antitrust trial is set for March 2, 2027. A federal judge has already paused the merger until at least mid-August to give the states' lawsuit more time to proceed. Paramount agreed to delay the deal's close until June 2027 or until the litigation resolves, whichever comes first. Every month of delay costs Paramount roughly $210 million in ticking fees alone.
Bonta has positioned himself as the lead plaintiff, but the coalition includes 11 other state attorneys general. Which states those are, and whether any of them might break ranks to negotiate separately, remains unclear. So does the question of whether Ellison has communicated his relocation threat directly to California officials or only to his own executives.
Paramount declined to comment on the record.
What is clear is the leverage equation. Bonta holds the lawsuit. Ellison holds the jobs. California collects the tax revenue, for now. If Paramount packs up for Georgia or Texas, the state loses one of Hollywood's founding studios, thousands of jobs, and the cultural cachet that comes with having a major lot on Melrose Avenue. Bonta gets to say he fought a monopoly. California workers get to update their résumés.
When a state's top law enforcement officer cannot say what settlement terms he would accept, and a company's board has already approved the exit plan, the negotiation is not really a negotiation. It is a countdown.