Paramount CEO Ellison Threatens California Exit by Oct. 1 Over Merger Dispute

Paramount CEO David Ellison told senior executives last week he will begin relocating the studio out of California on October 1 if state Attorney General Rob Bonta refuses to negotiate a settlement in the antitrust lawsuit blocking the $110 billion Warner Bros. Discovery merger. The October 1 deadline triggers a $7 million daily ticking fee owed to Warner Bros. shareholders. Bonta called the threat blackmail and said it will not influence the state’s case.

Why Ellison set an October 1 deadline

October 1 marks when Paramount begins accruing a contractual ticking fee of $7 million per day under the Warner Bros. deal terms. The antitrust trial is scheduled for March 2027, meaning Paramount could owe roughly $1.2 billion in fees before trial concludes if the merger does not close. Ellison told executives that relocating would help offset these costs, with internal estimates suggesting the move could save $500 million annually in taxes.

What Bonta and the states are challenging

California Attorney General Rob Bonta is leading 20 state attorneys general in the lawsuit seeking to block the merger. The states argue the combined company would control 27% of theatrically released films and one-third of basic cable output in the US. The lawsuit focuses on three areas: wide-release theatrical films, blockbuster films, and cable network programming. Bonta has said any settlement would require structural remedies like divestitures, not behavioral promises.

Ellison’s relocation plan and Bonta’s response

Ellison told Paramount’s 12-member Executive Leadership Team on August 5 that the board approved the relocation plan. Potential destinations include Tennessee, Georgia, and Texas. Bonta responded by calling the threat an attempt to blackmail regulators into abandoning what he described as a straightforward antitrust case. He said Paramount has lost in court and the threat will not influence the state’s enforcement.

Industry reaction and deal status

The Writers Guild of America, which filed its own lawsuit to block the merger, said Ellison’s threat proves the danger of Paramount’s outsized power. The DOJ and international regulators including the EU and UK have already approved the deal. Ellison has promised the combined studios will release 30 films per year with significant theatrical windows and offered to put that commitment in writing.

Final Thoughts

Ellison’s relocation threat escalates pressure on California’s antitrust case, but Bonta shows no sign of backing down. With Meyka grading PARA a C+ and the stock down 97.7% over the past year, the merger’s fate remains uncertain heading into the March 2027 trial.

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