Key facts
- Paramount CEO David Ellison is considering relocating the company out of California.
- The potential move is linked to California's antitrust lawsuit against the Warner Bros. Discovery acquisition.
- Paramount is open to selling CNN to resolve the litigation.
- A $7 million daily 'ticking fee' for the deal begins October 1 if it remains incomplete.
- California AG Rob Bonta is leading a coalition of states opposing the merger.
Paramount CEO David Ellison is considering relocating the Hollywood studio out of California if the state's Attorney General, Rob Bonta, does not agree to settlement talks regarding the company's antitrust battle over the acquisition of Warner Bros. Discovery. Ellison has set an October 1 deadline for these negotiations, which is also when a $7 million per day "ticking fee" associated with the $110 billion deal is set to commence. Paramount's chief legal officer, Makan Delrahim, publicly acknowledged the potential move, stating there is a "fiduciary duty to your shareholders" to consider such factors. He suggested that a governor would not want to lose Hollywood from the state. This comes after Britain cleared the takeover, leaving California-led litigation as the deal's last major regulatory obstacle. California AG Rob Bonta and 11 other state attorneys general are seeking to block the merger, arguing it would create a "media behemoth" able to raise prices and reduce competition. They have dismissed Paramount's pledge to release 30 films a year as unenforceable. Texas Governor Greg Abbott's office has expressed strong interest in attracting Paramount, highlighting the state's favorable business climate. Paramount's board has approved a five-year plan to move operations to states such as Tennessee, Texas, or Georgia, estimating potential annual tax savings of $500 million and potentially selling studio lots valued up to $4 billion, which could relocate 30,000 jobs.