Key Takeaways
- Paramount may relocate if California blocks its Warner Bros. Discovery merger.
- The company promises jobs, film production, and continued investment in California.
- Merger faces scrutiny over potential job losses and antitrust concerns.
The Paramount Warner Bros merger faces fresh uncertainty as Paramount considers moving its corporate headquarters and shifting billions in planned spending outside California if the state’s attorney general files a lawsuit to block its proposed $110 billion takeover of Warner Bros. Discovery, according to people familiar with the discussions.
The discussions remain preliminary, and no final decision has been made. People familiar with the matter said the possibility of relocating could also serve as leverage as Paramount continues negotiations with California officials over the proposed merger.
Paramount has pledged under the current agreement to keep both Paramount and Warner Bros. studio lots operating in California if the company remains in the state.
Paramount seeks agreement with California officials
As the Paramount Warner Bros merger faces regulatory scrutiny, the company has repeatedly sought an agreement with California Attorney General Rob Bonta that would allow the merger to move forward, according to people familiar with the talks.
The company proposed a consent decree committing to produce 30 films each year, maintain a 45-day theatrical release window and a 90-day streaming window, and keep both studio lots operating in California. Executives also pointed to approximately $30 billion in annual content spending and said the combined company would help create jobs in the state.
“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. The company added that it remains confident the transaction “raises no such concerns,” citing approvals from dozens of antitrust authorities worldwide.
Bonta’s office did not respond to a request for comment. Last month, Bonta said there were “red flags in the air everywhere” and that he remained concerned about potential job losses and higher prices resulting from the merger.
Company reviews alternatives as industry shifts
People familiar with the discussions said some advisers have urged Paramount CEO David Ellison to consider relocating operations if California files suit. They said Ellison remains cautious about leaving the state after moving Paramount’s headquarters from New York to Los Angeles following the company’s acquisition last year.
Paramount already has a potential expansion site. The company signed a lease last year for nearly 300,000 square feet of studio space in Bayonne, New Jersey, which could support additional operations if needed.
California has seen several major companies relocate in recent years following disputes with state regulators. Chevron moved its headquarters from San Ramon to Texas, while Oracle and Tesla also shifted their headquarters to Texas.
Paramount executives have argued that approving the Paramount Warner Bros merger would help California retain entertainment production and jobs instead of losing them to other states.
One adviser to Ellison described California as an “inhospitable” place for the company if legal action is taken against the merger.
