UPDATE #8: The court has set the calendar, and the last date before the deadline is September 24. That is the hearing on Paramount’s $1.88 billion demand, one week before the $7 million-a-day fee starts.
UPDATE #7: The deadline threat isn’t a threat. Per our insiders, the move out of California is happening, deals and productions are already frozen because of it, and Tennessee is the final destination, not Texas.
UPDATE #5: The sit-down is happening before the deadline. Settlement talks between Paramount and the state AGs are set for Monday, August 24, and Newsom went public, saying he takes the exit threat “seriously.” (Update #6: Bonta canceled the meeting late Sunday over leaks, putting the October 1 deadline back in play with nothing scheduled.)
UPDATE #4: The theater chains have answered. Cinemark is backing the merger, and Cinema United is now asking Bonta and Ellison to meet before October 1.
UPDATE #3: The cost of the standoff is now part of the court fight, with Paramount demanding a $1.88 billion bond from the states and WGA over fees and financing costs caused by the Warner Bros. merger delay.
UPDATE #2: The unions just answered the exit threat. Christopher Nolan’s DGA and IATSE sent both sides a letter urging a settlement, and one of their nine conditions is Paramount staying based in Los Angeles.
UPDATE: Since his first report from last night, Matt Belloni reports things are escalating, which is backed up by the owner of The Wrap. Bonta has also responded.
David Ellison’s threat to leave California now comes with a deadline, a shortlist of destinations, and approval from Paramount’s board.
According to Puck‘s Matthew Belloni, citing two people with direct knowledge, Ellison told Paramount’s top executives last week that the company will leave California if Attorney General Rob Bonta refuses to negotiate a settlement by October 1.
And this isn’t just a warning. Paramount’s board has already approved the move.
Ellison Gave Executives The October 1 Deadline
Last Wednesday, Ellison gathered Paramount’s 12-member executive leadership team for lunch on the studio lot. The group included studio chiefs Dana Goldberg and Josh Greenstein, streaming boss Cindy Holland, and CBS chief George Cheeks.
Ellison told them he remains confident Paramount will win the case and close the $110 billion Warner Bros. deal. His preference, he said, is to keep the combined company and its roughly 30,000 jobs in Southern California.
But he also confirmed the rumors.
If Bonta doesn’t come to the table by October 1 — the same day the $7 million-per-day ticking fee begins — Paramount will begin moving out of California.
The possible destinations include Tennessee, Texas, Georgia, and at least one other state Ellison didn’t name.
And according to Belloni, the move would happen regardless of how the lawsuit ultimately turns out.
Paramount’s headquarters would move first, with tax incentives from competing states helping cover the transition.
A five-year plan would then shift most studio jobs out of California.
Several executives reportedly left the lunch upset enough to tell colleagues about it, which is how the plan leaked.
Paramount declined to comment.
Ellison Says Leaving California Saves $500 Million A Year
Ellison also put a number on why Paramount is willing to make the move.
He estimates the company could save roughly $500 million a year in taxes by leaving California.
Then there’s the real estate.
Paramount could sell the Paramount and/or Warner Bros. studio lots, each valued at as much as $4 billion, and use the proceeds to help cover the costs of the legal fight and the mounting ticking fees.
Hollywood wouldn’t disappear completely. Ellison’s plan would keep a creative hub in Los Angeles.
The corporate headquarters and much of the business operation would go elsewhere.
Ellison also pointed to a precedent inside his own family. His father, Larry Ellison, moved Oracle’s headquarters from California to Texas and later Tennessee after years of complaints about taxes and regulation.
We broke down exactly what California loses if Paramount actually walks, from the 30,000 jobs to the last studio lot in Hollywood.
Bonta Calls The Threat “Blackmail”
Bonta’s office isn’t backing down.
His office told Belloni that Paramount’s threat is “another attempt to blackmail the state” into approving an illegal merger, while arguing the company has lost the plot as it continues losing in court.
The response came just hours after Bonta published his own Deadline op-ed, dismissing Paramount’s proposed fixes as piecemeal promises and declaring that he intends to win at trial.
(Update: Bonta has now said it himself, publicly. In a post on X, he pointed to the freeze and the trial date as proof Paramount keeps losing in court, accused the studio of another attempt to blackmail the state, and wrote: “It didn’t work the first time… and it won’t work this time.” A follow-up post claimed the merger means higher costs, fewer options, and fewer people making movies.)
Ellison, meanwhile, is working the phones for a back channel.
Per Belloni, citing a source in Democratic fundraising circles, Ellison has made several calls to Democratic politicians and top donors, hoping one of them can convince Bonta to come to the table.
Both sides are talking plenty in public.
They still don’t appear to be talking to each other.
Paramount Offered Bonta 12 Concessions Before The Lawsuit
Belloni’s report also adds important context to Paramount’s new contracts with theater chains.
On May 16, before Bonta filed the lawsuit, Paramount sent his office a proposed consent decree containing 12 concessions.
Among them: keeping both studio lots open and committing to release 30 movies a year in theaters.
According to Belloni, Bonta never responded.
Ellison then took one of those promises directly to theater owners.
AMC’s Adam Aron accepted first. Regal followed. Cinemark’s board is set to meet this week to decide whether to sign on, and smaller theater chains are expected to receive the same offer later this week. (Update: Cinemark has since come out in support of the merger.)
There is an important caveat.
Belloni notes that the breach penalties aren’t specified, and theater chains would be unlikely to sue one of their biggest movie suppliers anyway.
So the contracts aren’t exactly handcuffs.
But they do increase the pressure on Bonta to explain why a negotiated agreement still isn’t enough.
Everything Now Points To October 1
October 1 is quickly becoming the date that matters.
The $7 million daily ticking fee begins. Ellison’s deadline to negotiate expires. Governor Gavin Newsom is already pushing for a settlement. And the judge has ordered both sides to choose a settlement referee.
The court has set the trial for March 2, 2027.
Ellison just made October 1, 2026 the deadline that could decide where Paramount is headquartered long before then.
