Paramount CEO David Ellison may pull his operations out of California if the state does not end its attempt to block the company’s merger with Warner Bros Discovery and agree to settlement talks as soon as October.
The rumours were first reported by the publication Variety on Tuesday. They signal Ellison may be willing to leverage economic pressure on California’s ailing film industry in order to push through the merger.
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Al Jazeera was not able to independently confirm the validity of the report.
In July, California Attorney General Rob Bonta announced that he was leading a coalition of 12 state attorneys general in an antitrust lawsuit to block the consolidation.
Should Paramount and Warner Bros Discovery combine, Bonta warned that the resulting company would control 27 percent of theatrically released films in the United States and a third of the country’s basic-cable output.
“Consolidation here not only leads to higher prices,” Bonta said. “It also leads to fewer opportunities for important stories to come to life, and fewer ways for audiences to encounter stories, ideas, and perspectives beyond their own experiences.”
But Variety reported that Ellison told Paramount’s senior executives that he would begin the process of moving the company out of California on October 1 if Bonta does not agree to settlement talks.
There could be downstream effects as well. The report also alleged that Ellison would pull Warner Bros Discovery out of California, too, if the $110bn merger goes through.
Variety indicated that Paramount is considering relocating to the US states of Tennessee, Texas or Georgia — none of which are involved in the ongoing antitrust lawsuit.
A growing enterprise
The dispute over Warner Bros Discovery’s fate stretches back to late 2025, when the company’s sale was first announced.
Critics quickly observed that the sale had the potential to shift the balance of power in Hollywood, with Warner Bros Discovery wielding influential properties including the news channel CNN, the production company New Line Cinema and the television-streaming service HBO.
The streaming giant Netflix initially emerged as a frontrunner to take over Warner Bros Discovery, but by February, Paramount succeeded in inking an agreement.
It was the second major merger Paramount had lined up in less than a year. In 2025, it had also succeeded in consolidating with the media production company Skydance, in a deal that generated scrutiny about the editorial independence of its subsidiaries.
Paramount’s decisions that year to cancel The Late Show with Stephen Colbert and enter into a $16m settlement with US President Donald Trump were widely perceived as efforts to curry government favour for the merger.
Paramount is considered a titan in US filmmaking and media production, as one of the oldest studios in the country. Its portfolio includes CBS News and Paramount Pictures.
A pair of lawsuits
The impending merger with Warner Bros Discovery has led to a fresh round of scrutiny for Ellison and the Paramount leadership.
Last week, Ellison addressed some of those concerns in an opinion column in The New York Times.
In it, he questioned whether the states’ antitrust lawsuit was “really about market share”, speculating that it was instead about control over major news outlets like CNN. He also sought to portray himself as politically independent.
“I have regularly voted for candidates of both parties; I hold some views that would be called conservative and others that would be called liberal, just like most Americans,” Ellison wrote.
“When it comes to our news operations, I do not aspire to lead these companies to bend their newsrooms to my views.”
But the states have argued that combining Warner Bros Discovery and Paramount would create a monopoly, stifling competition.
If the merger succeeds, the states say that only four distributors would control 86 percent of the country’s films.
The merger could also mean job losses. As of the end of 2025, the headcount at Paramount stood at 17,600, while Warner Bros Discovery had 35,500 employees.
A day after the 12 states filed their lawsuit, the Writers Guild of America (WGA) followed suit.
In its July 14 complaint, the guild argued that the merger would mean fewer jobs and more pressure on writers to accept less favourable working terms, owing to reduced competition in the media market.
“Writers will be paid less and have fewer employment opportunities,” the WGA complaint said.
In Los Angeles County alone, the merger could result in a loss of nearly 2,500 jobs, according to an analysis by the Los Angeles County Department of Economic Opportunity, published in June.
As many as 6,000 employees around the world could also see their positions cut.
By comparison, when the Paramount and Skydance merger was completed in 2025, the company laid off roughly 2,000 people.
Costly standoff
On July 24, Paramount Skydance agreed to pause the merger until a ruling in the states’ case is ultimately made or until June 1, 2027 — a move the WGA celebrated.
“It remains our view that this merger is unlawful, and we will continue the fight to block it,” WGA said at the time.
The WGA did not respond to Al Jazeera’s request for comment.
Slowing the merger could be costly for Paramount Skydance. Under the terms of the merger, the company would have to pay a so-called ticking fee of $7m per day, or $650m per quarter, if the deal does not close by September 30.
But the standoff with Ellison could also be costly for California, which is experiencing a downturn in the number of productions filmed in the state. New York, another state involved in the lawsuit, could see a backlash, as it houses studios for CBS News and Paramount’s executive offices.
Representatives for the state of California and Paramount Skydance did not respond to Al Jazeera’s request for comment.
Paramount Skydance’s stock is trending upward on the heels of Tuesday’s report. The stock was up 0.4 percent in midday trading, while Warner Bros Discovery was up 1.1 percent.