Paramount signals exit from California amid merger fight

Paramount is preparing to announce it’s leaving California, according to internal discussions in the Los Angeles Mayor’s Office and the California Attorney General’s Office, TMZ reported Wednesday. Officials in both offices were told the announcement would come a day earlier, but it did not materialize, and it remains unclear whether the delay reflects a change in Paramount’s plans or simply a postponement, TMZ said, citing sources.

The threatened departure is the latest escalation in a monthslong standoff between Paramount Skydance and California Attorney General Rob Bonta, who is leading a coalition of a dozen state attorneys general suing to block the company’s roughly $110 billion acquisition of Warner Bros. Discovery. The states argue the merger would give Paramount unlawful market power over theatrical films and basic cable programming.

Paramount CEO David Ellison has threatened to begin relocating the studio to Texas, Tennessee or Georgia if settlement negotiations were not underway by Oct. 1, the date Paramount is set to start accruing a $7 million-a-day “ticking fee” to Warner Bros. Discovery shareholders under the terms of the delayed merger. Mr. Bonta has rejected the ultimatum outright. “I call it blackmail,” he said at a Politico summit in Sacramento, adding that the threat won’t derail his office’s case.

Mr. Ellison laid out the relocation plan in detail to his executive leadership team last month, telling the group he still hopes to keep the combined company and its roughly 30,000 jobs in Southern California but has identified alternative states as a contingency, according to Puck. Settlement talks between the two sides broke down in August after Mr. Bonta accused Paramount of leaking details of confidential negotiations, an allegation the company has denied.

In a new development Tuesday, the two sides finalized dates for a court-ordered settlement conference, agreeing to meet in person on Oct. 14 and 15 under the supervision of a federal magistrate judge, according to TheWrap. A spokesperson for Mr. Bonta’s office cautioned that the court-ordered meeting is standard procedure in a case of this size and does not signal that a deal is imminent. The talks come roughly two weeks after Paramount’s Oct. 1 fee deadline and ahead of a March antitrust trial.

TMZ reported that both the mayor’s office and the attorney general’s office now believe a settlement is unlikely.