California Attorney General Rob Bonta is attempting to place responsibility for Paramount potentially abandoning California squarely on the shoulders of the entertainment giant, despite leading the multistate antitrust lawsuit currently standing between Paramount and its massive Warner Bros. Discovery acquisition.
With California potentially staring down the loss of tens of thousands of jobs and tens billions of dollars in annual economic activity, Bonta insists that if Paramount CEO David Ellison ultimately decides to pull the company out of the state, the consequences belong to Paramount alone.
“They own it. It lies at their feet,” Bonta told The Hollywood Reporter when discussing the possibility of Paramount leaving California.
“If they decide to leave, that’s their independent choice,” Bonta continued. “I’m not asking for it. I don’t want it, obviously, and that responsibility will lay at their feet.”
That’s an extraordinary attempt to separate the potential consequences from the political and legal fight that preceded them.
Paramount’s threat to leave California comes as Bonta leads a coalition of 12 state attorneys general challenging Paramount Skydance’s roughly $111 billion acquisition of Warner Bros. Discovery — a transaction that has already received regulatory approval around the world and has become increasingly bogged down by the California-led lawsuit.
Nearly 58,000 Jobs Could Be at Stake
The potential economic consequences of Paramount leaving California are enormous.
A leaked September 10 analysis from the Los Angeles County Economic Development Corporation estimated that a complete Paramount relocation could permanently eliminate between 28,990 and 57,980 full-time jobs statewide.
The report also estimated that California could lose between $10.6 billion and $21.2 billion in annual economic output if Paramount follows through.
Those numbers include the ripple effects throughout California’s economy rather than merely the people directly employed on Paramount’s historic Hollywood lot. Productions support vendors, construction workers, restaurants, transportation companies, hotels, freelancers, post-production houses, and countless other businesses tied to California’s entertainment industry.
The Hollywood Sign – Photo Credit: Thomas Wolf, www.foto-tw.de, CC BY-SA 3.0 <https://creativecommons.org/licenses/by-sa/3.0>, via Wikimedia Commons
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Yet Bonta’s position is that Ellison would ultimately own the consequences of leaving.
That argument ignores the obvious cause-and-effect dispute at the center of this entire showdown.
Paramount is threatening to relocate while Bonta’s lawsuit is delaying the Warner Bros. Discovery transaction. California politicians are worried enough about that possibility that officials have publicly pushed for a resolution. Los Angeles has been put on edge by the prospect of Paramount leaving, with state and local politicians calling for a truce as the legal fight continues.
Bonta can argue that his lawsuit is justified. He can argue that Paramount is using the relocation threat as leverage. But pretending his legal battle is disconnected from the decision Paramount is now considering is considerably harder.
Bonta Says He’s Protecting Competition
Bonta’s stated justification for challenging the deal is antitrust enforcement.
His office argues that combining Paramount and Warner Bros. Discovery would merge two of Hollywood’s five major theatrical distributors and two major owners of basic cable networks. Bonta contends the consolidation could lead to higher prices, fewer movies and television shows, and diminished competition.
That remains the central legal question, and ultimately it will be determined either through a settlement or the courts.
But Bonta’s lawsuit also has consequences while that question is being litigated.
Paramount Pictures Logo – YouTube, ClosingLogosHD
Paramount faces enormous costs if the acquisition remains delayed. The company is required to pay Warner Bros. Discovery shareholders approximately $7 million per day beginning October 1 if the transaction has not closed. Paramount estimates those so-called “ticking fees” could reach approximately $1.3 billion by the projected conclusion of the antitrust trial.
The U.S. Department of Justice has now entered that particular fight on Paramount’s side, urging the court to require the states challenging the transaction to post an appropriate bond covering potential losses caused by delaying the merger. Paramount has requested a $1.88 billion bond.
That creates a remarkable situation in which California’s attorney general is attempting to stop a transaction that the federal Justice Department has already cleared, while Paramount argues the continuing delay is costing it millions of dollars every day.
California Officials Want a Resolution
Bonta is also facing pressure much closer to home.
The potential loss of Paramount and the jobs surrounding it has alarmed California political leaders, including Gov. Gavin Newsom and Los Angeles Mayor Karen Bass, who have pushed for the dispute to be resolved rather than allowing the confrontation to drag on while Paramount considers moving operations elsewhere.
Settlement discussions have hardly proceeded smoothly.
Gavin Newsom giving a speech – Office of the Governor of California, Public domain, via Wikimedia Commons
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Bonta canceled previously scheduled talks in August after details surrounding the negotiations appeared in the press. He accused Paramount of “amateur hour” behavior and said serious negotiations could resume if the company approached them appropriately. Paramount denied being responsible for the leaks.
Now the two sides are headed back to the table.
Representatives for Paramount, Bonta’s office, and the Writers Guild of America are scheduled for settlement discussions on October 14 and 15, ahead of an antitrust trial currently scheduled for March 2027.
That gives California another opportunity to prevent this increasingly ugly dispute from becoming considerably more expensive.
Paramount’s California Future Hangs in the Balance
Paramount leaving California would be more than another corporation moving its headquarters.
The studio has been synonymous with Hollywood for generations, and the Paramount lot on Melrose Avenue is one of the remaining physical symbols of the traditional studio system.
Now the possibility of that relationship ending is being seriously discussed while California’s attorney general battles Paramount over the Warner Bros. Discovery acquisition.
David Ellison in an interview with Bloomberg – YouTube, Bloomberg Podcasts
Bonta is entitled to defend his lawsuit on its merits. If he believes the merger violates antitrust law, that argument belongs in court. But his attempt to divorce his own actions from Paramount’s relocation threat is unlikely to end the political controversy surrounding him.
If Paramount leaves, Ellison will unquestionably be the executive making that decision. The question California workers will have to consider is why he was considering it in the first place.
And with nearly 58,000 jobs and as much as $21.2 billion in annual economic output potentially hanging in the balance, telling Californians that the consequences simply “lie at their feet” may prove to be a difficult explanation for Bonta to sell.
Do you think Paramount will leave California? Sound off and let us know!
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