Paramount has reportedly been considering an exodus from the state of California as the company faces pushback from its acquisition of Warner Bros. Discovery.
A new exclusive report from Semafor shows that Paramount CEO David Ellison’s friends and advisers have been nudging him to move the business out of California if Attorney General Rob Bonta stops his studio’s merger with Warner Bros. Discovery. While no final decisions have been made, it represents a broader trend of corporations shifting hubs out of California due to bureaucratic red tape. Last year, the company signed a lease in Bayonne, New Jersey, for nearly 300,000 square feet of studio space. Sources close to Ellison, however, said he remains “wary” of shifting from California after moving from New York to Los Angeles. Per Semafor:
Paramount has made repeated entreaties to Bonta to strike a deal that would allow its merger with Warner Bros. to close.
The studio proposed a firm commitment, via a consent decree, to produce 30 films annually, with a 45-day theatrical release window and a 90-day streaming window, alongside promises to keep both Paramount and Warner Bros. lots open in California, the people said.
Privately, Ellison and other Paramount executives have expressed frustration at Bonta’s refusal to engage, and have pointed to the commitments around content spending — some $30 billion annually — and employment that would flow into California. Already, the region has faced a production exodus to other states — even to Canada — with thousands of entertainment jobs lost in recent years. Ellison and his executives have said that the combined Warner Bros.-Paramount would create jobs in California, helping to stymie that outflow.
At least one Ellison adviser said that AG Bonta has created an “inhospitable” environment for Paramount to work in. Last month, Bonta told MSNOW that there were “red flags in the air everywhere,” and that he was “concerned about job loss and prices being increased.”
“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,” Paramount said in a statement. “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.”