Advisers close to Paramount CEO David Ellison have encouraged the company to consider relocating its headquarters and shifting tens of billions of dollars in future investment elsewhere.
The Newsom administration's hostilities towards the merger between Paramount and Warner Bros. Discovery (WBD) could mean entertainment giant leaves California after it has been revealed the state may sue to block the Paramount's proposed $110 billion deal with WBD.
According to a report from Semafor, advisers close to Paramount CEO David Ellison have encouraged the company to consider relocating its headquarters and shifting tens of billions of dollars in future investment elsewhere if California Attorney General Rob Bonta files an antitrust lawsuit to block the deal. The discussions reportedly include relocating the company's headquarters and shifting much of its planned $30 billion in annual content spending away from California.
As there have been reports that Bonta may sue to block the deal, Newsom has increased funding for the antitrust litigation, per Deadline.
It comes after the New York Times reported on Sunday that a lawsuit loomed over the company from New York and California, in an attempt at US antitrust enforcement. One adviser described California as an "inhospitable" place to do business if the state chooses to fight the deal in court.
If Paramount ultimately relocates, it would join a growing list of major companies that have left California amid complaints over taxes, regulations, and the state's business environment. Recent departures include Chevron, Tesla and Oracle, which all established new headquarters in Texas. Paramount has already expanded outside California after signing a lease last year for nearly 300,000 square feet of studio space in Bayonne, New Jersey, giving it another potential operating hub.
High taxes, increasing regulation, costly labor rules, and frequent legal battles with major employers have encouraged companies to move jobs and headquarters to more business-friendly states. "We continue to engage constructively with the remaining few regulators around the world still considering the merger, including State Attorneys General, and are prepared to address any legitimate antitrust issues," Paramount said in a statement.
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