With a costly October 1 deadline days away, Paramount Skydance’s threat to leave Los Angeles may be tabled for now.
The Wall Street Journal reported late Sunday that the studio made a series of concessions to the coalition of blue states suing to stop the $110 billion merger that could at last bring their volatile negotiations to an end. Among Paramount’s offers are a $1.5 billion investment in California production, the sale of several cable channels, the establishment of an oversight board to protect CNN’s editorial independence, and an agreement to pay penalties if Paramount fails to make 30 movies a year.
The parties appeared close to reaching an agreement late last week after the studio reportedly told California officials that a deposit had already been put down on moving trucks. According to Variety, California Attorney General Rob Bonta, who had spent weeks accusing Paramount of trying to “blackmail” regulators with the relocation threat, softened his stance at the urging of Mayor Karen Bass and Governor Gavin Newsom. On September 20, however, the alliance of 12 states divided into competing camps when New York Attorney General Letitia James demanded further concessions.
James received outside support from celebrities like Mark Ruffalo, whose involvement also comes amid his separate feud with Paramount over his antisemitic remarks. As one of the most prominent voices in a group calling itself the “Block the Merger Coalition,” the actor posted multiple social media statements urging Bonta not to “cave” and called on supporters to protest outside Bonta’s office. If a deal is not reached by October 1, Paramount will have to pay Warner Bros. Discovery shareholders a $7 million daily ticking fee for every day the transaction remains incomplete, further incentivizing a move.
The sticking point comes down to CBS, CNN, HBO, Paramount Pictures, Warner Bros., and rights to NFL games coming under one corporate roof. In July, after the Trump administration approved the deal, Bonta and 11 other states filed suit to block it, arguing that the combined company would have enough market power to raise prices and weaken competition in the entertainment industry. The Writers Guild of America also sued, claiming further consolidation would reduce pay and worsen working conditions for writers. CEO David Ellison has argued that the merger is necessary to build a company capable of competing with other streaming giants like Netflix and Disney as traditional television continues to lose audience share.
According to Politico and Page Six, many Paramount staffers are privately enthusiastic about the prospect of relocation, citing lower housing costs, cheaper gas, and the absence of state income taxes in Tennessee and Texas. One executive estimated that relocating would allow him to keep another $133,000 of a $1 million annual salary, and former Los Angeles news anchor Jeff Vaughn said several employees have told Paramount execs, “Take us with you.”
Though Paramount has not formally announced it will abandon the Hollywood lot that has been its home for nearly a century, Texas, Georgia, and Tennessee have all been mentioned as possible new headquarters. And the company has reportedly been spotted exploring roughly 400,000 square feet of office space in Nashville. If one of the industry’s biggest studios does follow through on its relocation threat, it will be another blow to a state already contending with empty soundstages, shrinking production, higher operating costs, and aggressive incentive packages from rival states.
Leaked analysis commissioned by the Los Angeles County Economic Development Corporation estimated that a full Paramount departure could cost California nearly 58,000 jobs, up to $21 billion in annual economic output, and as much as $1.17 billion in state and local tax revenue. A separate estimate forecast about 4,500 Los Angeles job cuts over three years.
If the parties do not reach an agreement, the case will go to trial in March 2027.
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