UPDATE 2: Stop treating it as a negotiating tactic. Per our insiders, Paramount’s move out of California is happening, deals and productions are frozen right now because of it, and Tennessee is the final destination.
UPDATE: Paramount has now put a price on the court delay, asking the judge to require a $1.88 billion bond covering ticking fees and financing costs in the Warner Bros. merger fight.
David Ellison says Paramount leaves California if there’s no settlement by October 1.
Everyone is treating it as a negotiating tactic.
So let’s take it seriously for a minute and ask what actually walks out the door.
The Bill: Jobs, Billions, And The Last Studio In Hollywood
Start with the people.
The combined Paramount-Warner Bros. company employs roughly 30,000 people in Southern California. Ellison’s plan moves the headquarters first, then shifts most studio jobs out over five years.
Then the money.
Paramount spends roughly $30 billion a year on content. Where the company is headquartered is where the decisions, the deals, and a growing share of that spending eventually live.
Then the taxes.
Ellison’s own math says leaving saves the company about $500 million a year. Every dollar of that is a dollar California currently collects.
Then the land.
The plan includes selling the Paramount and/or Warner Bros. lots, each valued at as much as $4 billion. Paramount is the only major studio still physically in Hollywood, on a lot with a century of history. Sell it, and Hollywood the place no longer contains a single major studio.
And it lands on an industry already limping.
Production in Los Angeles has been bleeding to Georgia, the UK, and everywhere else for years, which is why California just supersized its film tax credit to $750 million a year. That program was built to stop runaway production. It was never built to survive a major studio packing up the executive floor.
The crews, vendors, post houses, and small businesses that live off studio spending don’t relocate with a press release. They just lose the work.
Both Roads Out Of This Lawsuit Lead Out Of California
Now stack the scenarios, because this is where it gets ugly for the state.
If Bonta wins and the deal dies, our insiders have been clear about what happens to Warner Bros.: the studio gets sold off in pieces and ceases to exist, or survives as a shrunken label like MGM inside Amazon. The jobs and the spending scatter anyway.
If the deal survives but Bonta stonewalls past October 1, Ellison says the winner leaves the state regardless of the verdict.
Heads, California loses. Tails, California loses.
That’s why Newsom has been pushing Bonta toward a settlement for weeks.
The only door where California keeps the jobs, the spending, the taxes, and the lots is the one marked negotiate.
California should ask what’s left when he does.
