Paramount merger dispute raises concerns over Hollywood jobs and Los Angeles economy
A pending antitrust lawsuit could block Paramount's $111 billion acquisition of Warner Bros. Discovery, prompting the studio's chief to consider relocating its operations out of California, which officials warn could jeopardize thousands of jobs.
Paramount Global is weighing a move of its headquarters and production facilities out of California after a federal antitrust suit filed by California Attorney General Rob Bonta and 11 other states stalled its planned $111 billion purchase of Warner Bros. Discovery. The lawsuit, which alleges the merger would reduce competition, has delayed the deal and forced Paramount to consider relocating to states such as Tennessee, Texas or Georgia to qualify for tax incentives.
David Ellison, Paramount’s chief executive, has indicated he would sell the historic studio lots and shift operations if the merger is not completed by next month, according to sources familiar with the matter. Paramount has not commented on the reports.
State and local officials warned that a departure could have severe economic impacts. Assemblymember Rick Chavez Zbur said a move would be “devastating” for the region’s iconic industry, while Los Angeles County Department of Economic Opportunity projected the loss of up to 4,500 direct studio jobs and an additional 5,865 ancillary positions over three years. The department also estimated a potential $4 billion decline in economic output and $550 million loss in tax revenue.
A federal judge in Oakland temporarily blocked the merger, and a trial is set for March. Paramount has asked the court to require the plaintiff states and the Writers Guild of America to post a $1.88 billion bond to offset “ticking fee” costs it incurs for each day the deal is delayed.
Governor Gavin Newsom, Los Angeles Mayor Karen Bass and other officials have urged both sides to settle the case, emphasizing the need to protect jobs and the city’s identity as a global entertainment hub. Economists noted that while relocation could bring tax incentives to another state, it would also risk a “talent bleed-out” and disrupt the concentration of industry expertise in Los Angeles.
Negotiations for a court-ordered settlement are scheduled for late October, with the possibility that a settlement could keep Paramount and Warner Bros. Discovery operations in California.