Paramount is weighing a move out of California as the state prepares to sue over its $111 billion acquisition of Warner Bros. Discovery. The brewing Paramount California lawsuit has advisers to Paramount chief David Ellison urging him to consider relocating the studio’s headquarters. Semafor first reported the discussions on Sunday, citing people familiar with them.
The push comes as California and several other states prepare to file suit to block the merger, The New York Times reported. Semafor reported Ellison is being pressed to weigh a relocation that would also shift roughly $30 million in planned spending out of California. That move would only happen if Attorney General Rob Bonta sues to stop the deal. No decision on a move has been made, the outlet noted.
Why Paramount already has an out
Paramount signed a 10-year lease last year for more than 285,000 square feet at 1888 Studios’ production campus in Bayonne, New Jersey. The deal makes the studio eligible for a tax credit of up to 40 percent on movies and shows filmed in New Jersey. That gives Ellison a ready alternative if the California dispute escalates.
States line up behind the Paramount California lawsuit
California has reportedly taken the lead in preparing the case. New York, Washington and Connecticut are expected to join, according to the Times. A draft of the complaint argues the merger would hamper competition for tentpole movies. Reuters reported July 8 that the suit could be filed as early as this week. Paramount is aiming to close the Warner Bros. Discovery deal in the third quarter of 2026.
Paramount has countered that the merger will sharpen competition in Hollywood. It says the added scale is needed to compete with Netflix, Amazon and Apple. “We are confident the facts and the law support this transaction, and we will continue to defend it vigorously,” the studio told the Times.
Paramount gave a similar response to Semafor: “We continue to engage constructively with the remaining few regulators around the world still considering the merger, including State Attorneys General, and are prepared to address any legitimate antitrust issues. We are confident this transaction raises no such concerns, as demonstrated by the dozens of antitrust authorities around the world that have carefully reviewed the transaction.”
Global regulators have mostly cleared the deal
Most international scrutiny of the merger has already wrapped up. The European Commission is expected to approve the deal ahead of a deadline to open a deeper probe. Antitrust regulators in China and South Africa have already signed off, along with authorities in Saudi Arabia, Ukraine, Serbia and North Macedonia. Foreign-investment regulators in Germany, Italy, France, Romania, Slovenia, Belgium, Czechia and New Zealand have also approved it.
“We have been engaged with all regulatory and law enforcement bodies in a constructive and transparent manner and will continue to do so,” a Paramount spokesperson told The Hollywood Reporter last month. The lawsuit is now the biggest remaining obstacle to closing the deal on schedule.