Paramount could start moving out of Hollywood as soon as October if it can't make progress toward settling the antitrust suit California and 11 other states brought to block its acquisition of rival Warner Bros. Discovery.
Paramount's chief legal officer, Makan Delrahim, said Tuesday that a potential move out of state is on the table as it fights to close the $81 billion deal.
"Ultimately, you know, go to a place where you're wanted," Delrahim said at a conference sponsored by Politico.
Paramount Chief Executive David Ellison and his deputies are aiming to resolve the dispute that has delayed his quest to join Paramount, with CBS and its streaming services, to Warner, parent of HBO and CNN.
Losing Paramount would be a blow to California and the state's entertainment production economy, which is already struggling because of the flight of film and television shoots to other states and countries that offer generous tax incentives to Hollywood studios.
California Attorney General Rob Bonta, also speaking at the conference, described Paramount's talk of moving as "an attempt to blackmail the regulators who are daring to enforce the law."
California and the other states, including New York and Colorado, sued in July in federal court, alleging that combining Warner and Paramount would give one company too much power over theatrical movie distribution and cable television.
Paramount argues the deal is pro-competitive and pro-consumer and would help it compete with larger technology and media companies including Disney, Netflix and Amazon.com. The proposed transaction has been cleared by the U.S. Justice Department and regulators in the European Union, the U.K. and elsewhere.
California Gov. Gavin Newsom's office has reached out to Bonta's office to encourage a settlement, The Wall Street Journal reported last month. Democratic gubernatorial candidate Xavier Becerra, speaking at the Politico conference, also urged a settlement, saying it would be devastating for California if Paramount left.
While Paramount executives have privately acknowledged discussing a move from California, the studio's home for more than a century, Delrahim's remarks are the first time the company has publicly acknowledged the possibility.
As recently as last week, Ellison met with top executives at the company to outline a possible fall move, according to a person familiar with the matter. Digital news outlet Puck first reported that meeting.
Ellison has most often mentioned Tennessee as a potential new headquarters, the Journal previously reported. That state is already a home to Oracle, the software giant co-founded by Ellison's father and Paramount stakeholder Larry Ellison.
Other potential homes include Texas and Georgia, the person familiar with the matter said.
In October, Paramount is scheduled to begin accruing ticking fees that it would pay to Warner shareholders that amount to $650 million a quarter. Savings from moving production and operations to a more business friendly state could help offset those costs, the person familiar with the matter said.
Delrahim said the company doesn't want to leave. The intent, he said, "is to be committed to California," but "there's a point at which you have a duty, a fiduciary duty to your shareholders."
There are currently no settlement talks between Paramount and California. "We intend to go to trial and push this case to the end. We want to block this merger," Bonta said.
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