Key Takeaways
- Paramount CEO David Ellison is reportedly threatening to start moving the company out of California as soon as October 1 if the state doesn’t resolve its antitrust case blocking Paramount’s planned $110 billion merger with Warner Bros. Discovery, a deal already cleared by federal and international regulators.
- California Attorney General Rob Bonta blasted the move as “blackmail,” vowing to keep fighting what he calls an “illegal merger” that would raise costs, shrink options, and cut jobs in Hollywood even as Paramount faces a looming “ticking fee” of about $7 million per day if the merger isn’t closed by October.
- The stalled takeover has already rattled the industry, with Warner Bros. struggling to retain talent—Quinta Brunson just moved her overall deal to Disney’s 20th Television—and creatives hesitating to commit long-term while thousands of jobs and Warner’s entire studio and streaming future hang in the balance.
The fight over Paramount's stalled Warner Bros. Discovery takeover just escalated from the courtroom to California itself.
According to Bloomberg, California Attorney General Rob Bonta accused Paramount of "blackmail" on Tuesday, August 11, following reports that CEO David Ellison is prepared to begin moving the company out of the state if officials don't negotiate a resolution to the antitrust case blocking its $110 billion Warner Bros. merger.
"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," Bonta wrote on X (formerly Twitter).
Ellison has discussed a five-year plan that could begin moving Paramount's operations out of California as soon as October 1, starting with its Los Angeles headquarters. The reported plan comes as Paramount faces mounting costs from the delayed Warner Bros. transaction and uncertainty over how long the court fight could continue.
October carries a particularly expensive deadline. If the merger remains unfinished, Paramount will begin accruing a "ticking fee" for Warner Bros. Discovery shareholders worth approximately $7 million per day. The fee is designed to compensate investors for delays in closing the transaction.
Bonta isn't backing down.
"This illegal merger will result in higher costs, fewer options, and fewer people making movies," he wrote. "My office remains committed to stopping illegal consolidation and protecting a vibrant California economy for businesses that play by the rules."
Paramount has not publicly responded to Bonta's latest comments.
The clash follows a federal judge's decision to pause the merger after California and 11 other states sued to block it under federal antitrust law. The states contend that combining Paramount and Warner Bros. would eliminate a major Hollywood competitor and concentrate too much control over theatrical releases and cable programming.
That legal limbo is already affecting both companies. Warner Bros. has faced difficulties retaining talent as the merger drags on, while thousands of jobs could be eliminated if the companies ultimately combine.
The California fight is the latest obstacle in a takeover that has already survived a remarkable series of challenges.
Paramount initially fought Netflix for Warner Bros. Discovery after Netflix reached an agreement to acquire Warner's studio and streaming operations. David Ellison's company continued raising its offer until Warner ultimately accepted Paramount's proposal for the entire business. Netflix declined to match the final price and exited with a $2.8 billion breakup fee.
Paramount subsequently secured Warner Bros. Discovery shareholder approval and cleared major regulatory reviews in the United States and abroad. Britain recently approved the acquisition, following clearances from the European Union and other international regulators.
But the multistate lawsuit has stopped Paramount from converting those approvals into an actual closing.
The delay also comes as Warner employees and creatives remain caught between two corporate structures. Warner continues producing films and television, negotiating talent deals, and operating HBO Max while contractual restrictions tied to the pending merger limit some long-term business decisions.
