Paramount‘s pending acquisition of Warner Bros Discovery has evoked a range of emotion in Hollywood, mainly fear among creatives at the planned merger of two more major studios. But now that uncertainty is tinged with panic after CEO David Ellison threatened to relocate his Los Angeles-based company to Tennessee, Texas or Georgia.
Separately, the risks of both companies floating in limbo for the better part of a year as an antitrust suit by 12 state attorneys general wends its way to a March 2027 trial date has started to sink in.
So key guilds, trade groups and exhibitors as well as politicians are now urging Paramount and California Attorney General Rob Bonta to settle, even as many remain opposed to the merger, with a stream of sometimes confusing statements suggesting concessions to make the deal more palatable. But those proposed concessions are “behavioral,” Bonta has said. Promises, even in writing, aren’t the “structural” remedies, like asset sales, needed to preserve competition in markets the lawsuit claims are at risk.
“None of the noise from various constituencies makes Bonta’s case any weaker. It may pressure him to come to the table, but not to settle unless he feels that the competition in the market today will remain there afterwards,” said attorney Abiel Garcia, who began his career at the California DOJ as a deputy AG. He thinks the antitrust case is solid, “Not an easy win, but a good case. Ellison can’t do anything now except get Bonta to the table.”
Paramount had requested a November trial; the AGs asked for April. The judge set a March 2 start. “I think they [AGs] were looking at this in terms of what do we need to make sure our case is built as soundly as it can be,” said Garcia. “But the date had unintended consequences — the industry stepping in to say we can’t wait that long.”
Though both sides have agreed to the court-required mediation process, there are no formal settlement talks underway.
Speculation about a move to Nashville, where Ellison used to own a home, emerged earlier this summer and in August after he told Paramount’s leadership team that he would start the process of exiting California on October 1 absent settlement talks. Office headquarters could go first, followed by a slower move of studio staff and executives. The historic Melrose lot would likely be sold.
The date is timed to the October 1 trigger of a so-called ticking fee Paramount agreed to in the WBD deal – an onerous per-share payout that comes to about $7 million a day, or $650 million a quarter, until the deal closes. If the merger collapses altogether, Paramount would instead be on the hook for a $7 billion termination fee to WBD. The David Zaslav-led company has a contractual right to walk away as of June 4, 2027.
Bonta has called the threat to relocate “blackmail.” The Paramount camp denies that, insisting they’d prefer, of course, to stay in California but could save a boatload of money elsewhere, and that they don’t feel supported by their home state.
Taking him at his word, Nashville is a global music hub where Oracle, run by David Ellison‘s father Larry Ellison, has announced plans to expand. It’s building a massive campus for a world headquarters in the city’s East Bank area near the Cumberland River, a major area of new development.
Sony and other music labels and publishers large and small, adjacent business and countless musicians and artists have a large presence in there, as do agencies, and Paramount’s CMT (Country Music Television).
Tennesse’s core film and TV production incentive is a 25% rebate on eligible expenses in the state, with uplifts possible, on a minimum spend of $500,000.
“We aren’t big on red tape or fine print; there’s no per project cap, and this is not a first-come, first-served program,” says the website of the Tennessee Entertainment Commission. The state has no individual income tax on wages or salaries.
Projects shot there include films The Green Mile, Walk the Line, Hustle & Flow, Hannah Montana: The Movie, Robert Altman’s Nashville and the popular ABC/CMT drama of the same name starring the late Hayden Panettiere. Also shooting there is 9-1-1 Nashville and the Prime Video series Scarpetta starring Nicole Kidman, where Nashville stands in for Alexandria, VA.
Asked for comment, the Tennessee Department of Economic and Community Development said only: “Paramount is a globally recognized company and well-respected brand. While we cannot comment on specifics, TNECD remains committed to working with companies across a wide range of industries that are exploring opportunities to invest and grow in Tennessee.”
