Warner Bros-Discovery deal: David Ellison may move Paramount out of California, sets October 1 deadline

Paramount Skydance CEO David Ellison is preparing for a dramatic shake-up that could see the company begin moving its operations out of California as early as October 1 if state officials refuse to negotiate a settlement over the antitrust lawsuit challenging its proposed Warner Bros. Discovery deal.

Ellison told senior Paramount executives that the company could begin relocating its operations outside California if the $110 billion Paramount-Warner Bros. Discovery transaction does not close by September 30. The report cited sources familiar with the discussions, according to Variety.

The potential move comes as Paramount faces a legal challenge from California Attorney General Rob Bonta and a coalition of 12 states seeking to block the proposed merger on antitrust grounds. The lawsuit is currently the major remaining obstacle to completing the transaction.

READ THIS: Gamers, mark your calendars! GTA 6 extended look to come out on THIS date on Netflix

$7 million daily fee adds pressure

Variety reported that one of the key reasons behind Ellison's relocation plan is the financial pressure Paramount would face if the deal remains unresolved after September 30. Starting October 1, Paramount would reportedly begin paying a so-called "ticking fee" of approximately $7 million per day to Warner Bros. Discovery shareholders until the transaction closes. The escalating cost has pushed Paramount leadership to explore ways of reducing expenses.

Ellison reportedly told executives that relocating out of California could help the company significantly reduce its operating costs, with states including Texas, Tennessee and Georgia emerging as possible destinations.

California remains central to Paramount's identity

A move would represent a major shift for a company whose history is deeply intertwined with Hollywood and California. Paramount's studio lot in Los Angeles has been one of the industry's most recognizable landmarks for decades.

However, Variety reported that the potential relocation would not necessarily mean the complete disappearance of Paramount from Hollywood. The company could maintain a creative and production presence in California while moving some corporate and operational functions elsewhere.

DON'T MISS: 'Dhurandhar was the most-watched non-English movie in the world this year': Netflix CEO Ted Sarandos praises global success of Ranveer Singh's Dhurandhar

The proposal has nevertheless triggered concern among employees and Hollywood industry groups, particularly over the potential impact on jobs and California's entertainment economy.

Bonta rejects pressure tactics

California Attorney General Rob Bonta has strongly opposed Paramount's proposed acquisition of Warner Bros. Discovery. In a separate statement reported by Variety, Bonta described Ellison's threat to move the company as an attempt at "blackmail" and said the tactic would not influence the state's position.

Bonta's office has argued that the proposed merger raises serious competition concerns and has joined other states in seeking to prevent the transaction. Ellison, meanwhile, has argued that Paramount needs the Warner Bros. Discovery deal to remain competitive in a rapidly changing entertainment industry.

Paramount-Warner Bros. deal faces uncertain future

The proposed transaction would bring Paramount and Warner Bros. Discovery under the same corporate umbrella, combining major film studios, television networks and streaming businesses. But the legal battle has created significant uncertainty over when or whether the deal can close. According to Variety, Ellison is pushing for a settlement with the states rather than allowing the dispute to continue indefinitely.

ALSO READ: Nicolas Cage’s WWII movie goes missing from Netflix desk; movie makers sue platform for $105 million

For now, Paramount's future remains closely tied to the outcome of the antitrust case. If negotiations fail and the merger remains unresolved after September 30, Ellison's October 1 deadline could mark the beginning of one of the most significant corporate relocations in Hollywood history.