Paramount has allegedly weighed moving its corporate headquarters and shifting billions of dollars in planned spending out of California if the state sues to block its proposed $110 billion merger with Warner Bros. Discovery, according to a report from Semafor.
The contingency planning comes as California Attorney General Rob Bonta and attorneys general from New York, Connecticut and Washington are expected to seek a temporary injunction aimed at preventing the merger from closing, according to multiple media reports. The potential legal challenge would mark a significant escalation in the regulatory battle over one of the largest proposed media mergers in several years.
In a Monday statement provided to Deadline, Paramount said it continues “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.”
The company added that it is “confident this transaction raises no such concerns,” arguing the deal “will create a stronger challenger to dominant global streaming and technology platforms, expand consumer choice, increase investment in premium content and theatrical distribution, and create more opportunities for creators and workers.”
According to Semafor, advisers to Paramount CEO David Ellison have encouraged him to consider relocating the company’s headquarters and redirecting much of the company’s roughly $30 billion in planned annual spending if California decides to file a lawsuit. No decisions have been made, and the apparent discussions could amount to nothing more than negotiating leverage as Paramount continues seeking the approval from the Golden State.
Semafor also reported that Paramount has proposed a series of commitments designed to address concerns from regulators, including producing 30 films annually and keeping both the Paramount and Warner Bros. studio lots operating in California. Deadline separately reported that Paramount discussions with state officials have included potential production commitments and employment safeguards as the company seeks to secure approval for the transaction.
Still, people familiar with the discussions told Semafor that Paramount execs have become frustrated by what they feel is a lack of engagement from Bonta’s office. One adviser described California as becoming an “inhospitable” place for the company to operate should the attorney general move forward with litigation.
Bonta previously said his office is investigating the merger, citing concerns about the potential for job losses along with higher prices. Neither Paramount nor AG Bonta’s office immediately responded to TheWrap’s request for comment.
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