Paramount’s board has approved a plan to move the Hollywood studio out of California if the state’s attorney general Rob Bonta doesn’t agree to settlement talks in his bitter antitrust case by Oct. 1, according to reports.
Paramount CEO David Ellison told his top lieutenants last week that his company would relocate to Tennessee, Texas, Georgia or another state if Bonta refuses to come to the table in his case opposing Paramount’s $110 billion acquisition of Warner Bros. Discovery, Puck and Variety reported Tuesday.
The mogul discussed the ultimatum during an hourlong lunch meeting last Wednesday with Paramount’s 12-member Executive Leadership Team on the company’s storied Hollywood lot, according to Puck, which cited two people with direct knowledge of the meeting.
Ellison told the group that Paramount’s board, which he controls, had already signed off on the relocation plan, the report said.
The 43-year-old son of Oracle billionaire Larry Ellison set an Oct. 1 deadline for resolving the dispute since that’s the date a so-called $7 million-per-day “ticking fee” tied to the Warner Bros. deal is set to kick in, according to the report.
If there are no negotiations, Ellison said he would move either Paramount or the combined Paramount-Warner Bros. company out of California regardless of how the antitrust litigation ultimately plays out, Puck reported.
The Post has sought comment from Paramount and Bonta.
Ellison said the headquarters would be the first operation to relocate, with incentives from whichever state ultimately lands the company helping finance the move, according to the report.
He is already in contact with multiple states and is developing a five-year plan that would eventually shift most of the studio’s jobs to its new home, Puck reported.
Ellison estimated that leaving California would save Paramount $500 million a year in taxes.
The company could also raise cash by selling the Paramount and Warner Bros. studio lots, each of which has been valued as high as $4 billion, Puck reported, while noting that the properties could fetch less given Los Angeles’ battered production market.
Paramount would nevertheless maintain a creative presence in Hollywood because many of its talent partners and vendors remain there, while executives and other business operations would be expected to relocate, according to the report.
Ellison told executives he still wants the combined company — and roughly 30,000 jobs — to remain in Southern California, Puck reported.
But he argued that relocating would be preferable to cutting content spending or restructuring the company as it shoulders the mounting cost of fighting the states and paying roughly $650 million in quarterly ticking fees, according to the report.
The Warner Bros. deal could also leave Paramount on the hook for a $7 billion breakup fee if it fails to close by next June, Puck reported.
The relocation plan marks a dramatic escalation in Ellison’s showdown with Bonta, who is leading California and 11 other states in a federal antitrust lawsuit seeking to block the Warner Bros. acquisition.
Bonta’s office blasted the latest maneuver, telling Puck that it is “another attempt to blackmail the state into letting an illegal deal through.”
“Paramount has lost the plot as it continues to lose in court.”
Ellison nevertheless expressed confidence during last week’s meeting that Paramount would defeat the states’ case and eventually complete the Warner Bros. deal, according to Puck.
His remarks reportedly rattled some members of Paramount’s leadership team.
Several executives later told colleagues about the meeting amid concerns about uprooting their families and disbelief that the dispute with California had deteriorated to the point where Paramount could leave the state, according to Puck.
Among those reportedly attending the meeting were studio chiefs Dana Goldberg and Josh Greenstein, streaming boss Cindy Holland and CBS chief George Cheeks.
Ellison is meanwhile trying to build political and industry pressure on Bonta to negotiate.
Paramount previously proposed a consent decree containing 12 concessions, including promises to keep both the Paramount and Warner Bros. lots operating and to release 30 movies a year through the two studios, Puck reported.
The company also offered theater chains a minimum 45-day theatrical window and a 90-day window before movies move to Paramount+, according to the report.
AMC Theatres and Regal owner Cineworld have backed the merger after receiving the proposal, while Cinemark’s board is expected to discuss whether to join them this week, Puck reported.
Bonta, however, has resisted the overtures, with the site reporting that he would presumably seek major structural remedies rather than Paramount’s piecemeal concessions.