One of Hollywood’s oldest names is preparing for the possibility of walking out on California — and the people running Los Angeles and the state appear to be taking the threat seriously.

Paramount Skydance has developed a contingency plan to begin relocating its headquarters and other operations if the California-led legal fight against its Warner Bros. Discovery merger is not resolved, according to multiple reports.

The trigger date is reportedly October 1.

That does not mean the moving trucks are already lined up outside the Melrose Avenue gates. The plan remains tied to a settlement in the antitrust case.

But this has moved well beyond a vague complaint about taxes or regulation. Paramount’s board has reportedly approved a relocation strategy, other states are openly courting the company, and California officials are warning about the economic damage a departure could cause.

ADVERTISEMENT

TMZ reported Wednesday that the offices of Los Angeles Mayor Karen Bass and California Attorney General Rob Bonta are operating on the belief that Paramount is preparing to leave if the dispute is not settled. The outlet also obtained a preliminary economic analysis commissioned by Paramount that modeled the effect of moving the company’s headquarters and other operations out of the state.

The fight centers on Paramount’s proposed acquisition of Warner Brothers Discovery, which California and 11 other states have sued to block on antitrust grounds.

Paramount, meanwhile, is facing a costly clock. Beginning October 1, the company is expected to owe Warner shareholders an additional $7 million per day until the transaction closes.

CEO David Ellison has reportedly told senior executives that if California Attorney General Rob Bonta will not negotiate a settlement, the company will begin the relocation process. Tennessee, Texas and Georgia have all surfaced as possible destinations.

The Los Angeles Times reported that Ellison has told associates he would prefer to keep Paramount in Los Angeles.

Even so, people familiar with the plan say he is prepared to sell the historic Paramount and Warner Bros. studio lots and move operations if the merger remains blocked.

The company’s short list reportedly includes Tennessee, Texas and Georgia, where lower taxes and aggressive film incentives could make an exit financially attractive. A full move would take years and could force thousands of employees to decide whether to uproot their families or leave the company.

The threat has already rattled Hollywood workers and nearby businesses after years of production declines, strikes and layoffs. Roughly 17 percent of Paramount’s workforce is based in Los Angeles, according to an earlier county-commissioned analysis cited by the Times.

A federal magistrate has directed the two sides to identify dates in late October for settlement talks. That schedule comes after Paramount’s October 1 financial deadline and leaves the company with a powerful reason to start acting before a courtroom deal is reached.

ADVERTISEMENT

The history makes the threat extraordinary.

Paramount traces its roots to 1912, when Adolph Zukor founded the Famous Players Film Company. The business that became Paramount was producing movies in Hollywood by 1916, and construction began on the company’s current Melrose Avenue lot in 1926.

That 62-acre property now contains roughly 1.85 million square feet of offices, soundstages, theaters and production facilities, according to Paramount’s latest annual filing with the Securities and Exchange Commission. It is the last major studio lot located inside Hollywood proper, and the size of that footprint helps explain why even a phased departure would take years to complete.

There is one important wrinkle in the headline: Paramount’s corporate headquarters had long been in New York before Ellison shifted top operations to Los Angeles after the Skydance deal closed in 2025. The 114-year figure reflects Paramount’s history as a company and its century-plus Hollywood identity, not 114 uninterrupted years of the same corporate office sitting in California.

Still, the potential loss for California is enormous.

A preliminary study prepared for Paramount estimated that a full relocation could eventually cost the state between 28,990 and 57,980 jobs, while cutting annual economic output by approximately $10.6 billion to $21.2 billion, according to The Washington Examiner. State and local tax collections could fall by an estimated $585 million to $1.17 billion per year.

Those projections come from a study commissioned by Paramount itself, so they should be read as estimates from an interested party rather than a neutral forecast. Even the lower end, however, would represent a painful blow to a film industry already dealing with falling production, layoffs and empty soundstages.

California officials call the relocation threat pressure tactics. Bonta has accused Paramount of trying to strong-arm the state into abandoning its antitrust case.

Paramount’s legal team says the company must consider the mounting financial cost of a delayed merger and whether California remains the best place to operate.

ADVERTISEMENT

Both things can be true: Ellison is using the threat as leverage, and he may be fully prepared to carry it out.

For more than a century, Paramount’s mountain logo has been inseparable from Hollywood. California’s political leaders now have less than two weeks to decide whether they are willing to risk discovering what Hollywood looks like without it.

This is a Guest Post from our friends over at WLTReport. View the original article here.

 

Join The Conversation. Leave a Comment.