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Paramount readies its California exit as Bonta's lawsuit stalls a federally approved merger

Paramount Readies California Exit as Bonta Calls the Threat ‘Blackmail’

by
M.A. Rothman

By M.A. RothmanSeptember 16, 2026 · 4 min read
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Paramount, the studio that has called Hollywood home for more than a century, is telling California officials it is serious about leaving. On Sept. 16, 2026, Deadline reported that Paramount executives had told key officials and stakeholders the company is “deadly serious” about leaving the state, and that those told a deposit had been put down on the moving trucks included Los Angeles Mayor Karen Bass and Attorney General Rob Bonta.

The reason is not taxes in the abstract. It is a lawsuit. Bonta is leading a coalition of 12 states, all with Democratic attorneys general, trying to block Paramount Skydance’s roughly $110 billion acquisition of Warner Bros. Discovery, a deal the U.S. Department of Justice already approved. Bonta’s answer to the threat of an exodus has been to accuse the company of “blackmail.”

How a merger fight became a moving plan

On July 13, 2026, Bonta stood in front of the Hollywood sign and announced that California and 11 other states had sued in federal court in the Northern District of California to stop the merger. CNN reported that the coalition was made up entirely of states with Democratic attorneys general: Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington alongside California. Bonta claimed the merger “would snuff out competition, drive up prices, diminish content quality, and produce fewer movies and shows each year.”

As CNN itself noted, the suit was a high-profile example of state officials trying to block a merger “that has already been blessed by the federal government.” The Justice Department approved the deal in June, and regulators in Europe and the United Kingdom have also signed off, according to Screen Daily. That leaves Bonta’s coalition as one of the last obstacles standing between Paramount and the finish line, with a trial set for March 2.

Delay is expensive. Under the merger agreement, Paramount owes Warner Bros. Discovery shareholders a “ticking fee” if the deal has not closed by the end of September. Variety reported the fee at $7 million per day starting Oct. 1; Deadline put it at roughly $7.2 million a day, about $635 million for a full quarter.

In early August, according to reporting first published by the Hollywood trade outlet Puck and confirmed by Variety, CEO David Ellison told his 12-member senior executive team at an Aug. 5 meeting on the Paramount lot that if Bonta refused to negotiate a settlement and the deal remained unresolved by Sept. 30, the company would begin moving out of California starting Oct. 1. Ellison has the support of the Paramount board, according to U.S. reports cited by Screen Daily. Headquarters would go first, Variety reported, followed by a five-year plan to shift most studio jobs out of the state. Georgia, Texas and Tennessee have been floated as destinations.

Bonta: “blackmail”

Bonta did not take it quietly. Writing on social media in August, he said: “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.” He added: “Paramount has lost the plot as it continues to lose in court. It didn’t work the first time – on the eve of our July lawsuit – and it won’t work this time.”

Bonta has said any acceptable fix would need to be “structural,” meaning divestitures, rather than behavioral promises such as guaranteed production levels, according to Variety.

By Sept. 16, his office’s tone had shifted slightly. “We cannot comment on a company’s plans,” a spokesperson told Deadline. “It’s no secret that Paramount has been making this threat, despite its alleged commitment to California and Hollywood. What Paramount decides to do is Paramount’s choice alone.” Paramount declined to comment to Deadline on the current state of its exit plans.

Mayor Bass’s office told Deadline she “has been engaged on this issue and will continue to fight to make sure L.A. is home to Hollywood.”

What California stands to lose

A Sept. 10 analysis delivered to Los Angeles County by the Los Angeles County Economic Development Corporation laid out the cost. Deadline notes that Paramount helped the nonprofit put the report together. “At a minimum,” the report said, relocating Paramount’s headquarters and other operations would mean losses of 2,750 to 5,550 job-years across all industries and $1.01 billion to $2.03 billion in economic output in California between Oct. 1, 2026, and Sept. 30, 2031.

The full-relocation scenario is far worse. Once the move was complete, the document said, the state would face “the permanent loss of approximately 28,990 to 57,980 full-time jobs statewide across all industries, and losses of between $10.6 billion and $21.2 billion annually in economic output.”

Paramount’s own interest in those numbers is obvious, and the merged company is widely expected to cut jobs regardless of where it is based. But the basic arithmetic is not in dispute: a major studio packing up for a lower-tax state would hit an entertainment economy already bleeding production to other states and other countries.

The bigger pattern

California’s leaders like to say Hollywood is part of the state’s identity. Their policies keep testing that loyalty. Here, a federal government that reviewed the deal and let it proceed is being second-guessed by a state attorney general who decided he knew better, and who then called the company’s predictable response blackmail.

Companies do not owe states their presence. They go where they are wanted. Texas, Tennessee and Georgia have spent years courting film and television work with incentives and lighter regulation. California has spent the same years suing, taxing and lecturing. If Paramount follows through, it will not be the first major employer to decide the fight with Sacramento costs more than the moving trucks.

California didn’t lose Paramount to Texas or Tennessee; it sued its own studio toward the door.

Sources

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