California’s attorney general Rob Bonta has hit back at reports that Paramount will move the studio out of Hollywood if a settlement is not reached over its planned acquisition of Warner Bros Discovery, labelling the move an “attempt to blackmail the state” into letting the deal through.
Paramount chief exec David Ellison is reportedly prepared to start moving the fabled studio out of California as soon as October, marking the latest escalation in his battle to complete the $111bn acquisition.
Ellison has the support of the Paramount board, according to US reports, and is looking to use the move to push for a settlement over the planned antitrust court action led by Bonta.
The California attorney general has been central to attempts to derail the proposed takeover, heading up an antitrust case that has the support of 11 other states.
That case has been slated to be heard in court in March, meaning Paramount will have to start paying $7m each day from the end of September, as per Ellison’s ‘ticking fee’ agreement with WBD shareholders.
However, Paramount will start to relocate its operations outside of California from 1 October if Bonta fails to agree to negotiate a settlement.
It was not immediately clear where Paramount would move to, but states with tax incentive schemes such as Georgia and Texas have been mooted. The studio’s HQ would move first, following by studio roles being relocated over five years.
Bonta, writing on social media, said: “In a span of weeks, Paramount agreed to halt the merger until a court decision or until June 2027, asked for a November trial, and is now back with another attempt to blackmail the state into letting an illegal deal through.”
He continued: “Paramount has lost the plot as it continues to lose in court. It didn’t work the first time – on the eve of our July lawsuit – and it won’t work this time.”
If the deal does progress to trial in March, Paramount will be liable to pay WBD almost $1.2bn. If the deal fails to materialise, Paramount will be required to pay a $7bn payment to WBD. It has already paid Netflix a $2.8bn break-up fee.
Bonta’s US antitrust case is one of the last hurdles facing Ellison, after Paramount secured regulatory approval in Europe and, most recently, the UK. Hollywood trade Puck broke the news.
A version of this story first appeared on Screen’s sister site Broadcast.
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