Paramount CEO Threatens to Relocate Studio Amid Antitrust Legal Dispute

Paramount’s new CEO, David Ellison, is considering moving the studio out of California because of an ongoing antitrust lawsuit. The California attorney general, Rob Bonta, is leading efforts with 11 other states to block Paramount’s $111 billion merger with Warner Bros. Discovery (WBD). Ellison has mentioned more business-friendly states like Georgia, Tennessee, or Texas as potential new homes for the studio.

Ellison is facing pressure as he may soon need to pay WBD a hefty fee if the merger delays continue. This could cost Paramount around $650 million every quarter if no agreement is reached until next spring. The antitrust trial is not scheduled until March 2027.

The report suggests Ellison is prepared to move Paramount and possibly Warner Bros., regardless of the trial’s outcome. He has developed a five-year plan to relocate many jobs, although he aims to keep a presence in Hollywood. In response, Bonta criticized Paramount, accusing them of attempting to pressure the state into approving the deal.

Bonta’s office stated that the merger would raise costs, reduce quality, and limit content for audiences in the U.S. The lawsuit claims the merger violates Section 7 of the Clayton Act, which prohibits mergers that reduce competition or create a monopoly. The merger was put on pause until at least June 2027, following last week’s arguments in court.

Bonta faces scrutiny from Michael Gates, his Republican challenger for attorney general. Gates questions whether Bonta’s decision on the lawsuit is influenced by a connection to Netflix co-founder Reed Hastings’ family. Hastings’ wife donated $1 million to support Bonta and other prosecutors, raising concerns about potential conflicts of interest.

Critics of the Paramount and WBD merger worry about its impact on the entertainment industry, fearing significant layoffs and changes in media coverage. Liberal critics express concern over CNN’s potential shift in editorial stance, although Ellison has assured CNN’s independent news coverage will continue.

Ellison emphasized his commitment to unbiased news in an op-ed, stressing the importance of newsrooms that reflect diverse views. He underscored CNN’s role as a balanced news organization post-merger.