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The Paramount/Warner Bros. Merger Becomes A Legal Showdown
Courtesy of Paramount Pictures
Paramount CEO David Ellison announced that he will move the company out of California if he can’t settle the state’s antitrust lawsuit.
The Big Picture: Moving Paramount out of California would be a seismic disruption to the film and TV industry… but so would its proposed merger with Warner Bros. Discovery. That’s why the industry — creatives, execs, representatives, cinema owners, etc. — is so split on its support. Ellison’s threat could make some influential critics of the deal change their opinion.
Behind The Scenes: Ellison is really hoping California AG Rob Bonta blinks.
Ellison told his senior management that if he can’t settle the lawsuit filed by Bonta and 12 other states by September 30, he’ll start moving the company out of the state the next day.
He’ll first move the company’s HQ, followed by the studio’s operations over the next five years.
He hasn’t decided exactly where but pinpointed Texas, Tennessee, and Georgia as options.
Paramount’s board of directors has already approved the plan — not a surprise considering the company would have to start paying Warner Bros. Discovery shareholders $7 million a day until the deal closes, starting October 1.
Closing Thoughts: Bonta’s seemingly not taking the bait, calling Ellison’s plan an “attempt to blackmail the state into letting an illegal deal go through.” He also said that any settlement, if he were to entertain the idea, would need to be “structural” (like a divestment of, say, CNN) rather than “behavioral” (like promising to make a certain number of films annually).
If the plan to move out of California is a bluff, Ellison may need to start thinking about selling divisions that would be duplicates under a combined Paramount/WBD. Could CBS or Paramount+ hit the auction block?
Prediction: If Ellison is serious about leaving, then expect states to roll out the red carpet to woo the company over. Who wouldn’t want the first major Hollywood studio not in Los Angeles?
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Today’s email was written by David Vendrell.
Edited by Nick Comney. Polled and Copy-edited by Kait Cunniff.
Published by Darline Salazar.