David Ellison’s advisers have started sketching an option nobody expected a year ago: moving Paramount Skydance’s corporate headquarters out of California. Not because the state stopped making movies, but because California’s attorney general may be about to sue to stop the studio’s own $111 billion deal.
The threat surfaced Sunday, when Semafor reported that “friends and advisers” have been pushing Ellison to consider relocating out of state. It’s retaliation, according to people familiar with the discussions, aimed squarely at Attorney General Rob Bonta if he follows through on a lawsuit to block Paramount’s acquisition of Warner Bros. Discovery. A move would pull roughly $30 million in planned spending out of California. The multistate suit itself, led by Bonta with New York, Washington and Connecticut expected to join, could land in court as soon as today, according to a Reuters report that first surfaced the timeline last week.
It is the latest turn in a fight that has simmered since Paramount and Warner Bros. Discovery shareholders approved the merger earlier this year. The Hollywood Reporter reported that the states’ draft complaint centers on tentpole movies: the argument is that folding Warner Bros. Pictures into Paramount Pictures, and HBO Max into Paramount+, would leave theaters and streaming subscribers with meaningfully fewer places to see the kind of big-budget films that anchor a release calendar.
That argument didn’t move the U.S. Department of Justice, whose antitrust division cleared the deal on June 12 without requiring a single divestiture, after previously approving the $111 billion merger. It did, however, blindside the department’s own investigators. Career antitrust lawyers who had spent months on the case were reportedly “leaning” toward recommending the department sue to block it, only for DOJ leadership to clear the deal before that recommendation was finished, according to a Wall Street Journal report. Sen. Elizabeth Warren seized on the account.
“The American people need to know if this merger was approved as a political favor. This reeks of corruption.”
Sen. Elizabeth Warren, D-Mass., citing the Journal’s reporting
David Ellison and his father, tech billionaire Larry Ellison, are friendly with the president, and Paramount hosted a Washington event honoring Trump in April. Last year, Ellison also hired Makan Delrahim, who ran the DOJ’s antitrust division during Trump’s first term, as Paramount’s chief legal officer. Paramount has denied any suggestion the clearance was political, and a spokesperson pushed back on the states’ threatened suit in similarly firm terms.
“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. We are confident this transaction raises no such concerns, as demonstrated by the dozens of antitrust authorities around the world that have carefully reviewed the transaction.”
Paramount spokesperson, in a statement
Federal clearance doesn’t stop states from suing on their own antitrust theories, and this coalition has already gotten one megadeal frozen this year — a judge halted Nexstar’s takeover of Tegna ahead of trial after states intervened, a case Nexstar is still appealing. California’s stakes go well beyond legal theory: the state is home to much of the production and post-production workforce that a combined Paramount-Warner would employ, which is why Bonta’s office has spent months pressing for records even as Oregon’s parallel effort to delay the deal was withdrawn last week.
Paramount’s regulatory clock is also ticking abroad. The European Commission faces its own deadline Tuesday to decide whether roughly $24 billion in financing from Gulf sovereign wealth funds, including those of Saudi Arabia, Qatar and Abu Dhabi, triggers a deeper probe under the EU’s foreign subsidies rules, layered on top of a separate merger-review deadline. Britain’s Competition and Markets Authority opened its own inquiry last month after the UK government signaled it was prepared to intervene on media-plurality grounds. China, South Africa, Saudi Arabia, Ukraine, Serbia and North Macedonia have already cleared the deal.
Paramount has already hedged its bets on geography, as it happens. Last year the studio signed a 10-year lease on more than 285,000 square feet of production space at a campus in Bayonne, New Jersey, a state offering tax credits of up to 40% on productions filmed there. Whether or not Ellison follows through on leaving California, the deal he’s racing to close by September already has a backup address.
