You know it's tough times in the entertainment biz when two of the oldest and most storied studios in Hollywood are forced into the merger-and-acquisition tango in hopes that they can both stay afloat. But it's a sign of something even crazier when the buyer threatens to leave Hollywood to escape the state's regulatory noose.
That's the word this weekend, when Semafor reported that "Paramount is reportedly considering leaving California" as Attorney General Rob Bonta is reportedly "preparing a lawsuit over its planned $111 billion takeover of Warner Bros. Discovery."
According to the exclusive, Paramount chief David Ellison's "confidants have pushed him to consider moving its corporate headquarters and reallocating much of its $30 billion in planned spending outside the state," should Bonta sue to stop the takeover from taking place.
The New York Times reported on Sunday that "a group of states" led by California is "preparing to file a lawsuit to block Paramount’s acquisition of Warner Bros. Discovery as soon as this week, according to four people briefed on the plans."
The buyout already enjoys the blessings of the federal government, after the Justice Department's Antitrust Division gave its approval in June. "After an extensive review, DOJ officials determined the transaction did not pose a threat to competition and declined to challenge it," Politico reported at the time. But with its headquarters in the Golden State, Sacramento's massive regulatory machinery must also give the thumbs up.
That's where Bonta comes in — and there's politics at the heart of the deal.
Bonta is fairly described (at least by Yours Truly) as a hardcore progressive lefty. On his appointment as AG by Gov. Gavin Newsom in 2021, California Healthline described the former longtime state assemblyman in glowing terms: "From Racial Justice to Dirty Air, California’s New AG Plots a Progressive Health Care Agenda." A New York Times report at the time called him "an Asian-American Progressive" and a "loyal political ally" of Newsom.
So far, so... very California.
What might give the Bonta-Newsom tag-team incentive to scuttle the buyout is that Ellison is a political ally of President Donald Trump. He also promised to make sweeping changes at Democrat house organ CNN if the merger were to go through.
No merger, no reforms.
UPDATE: It's official. "A coalition of state attorneys general have sued Paramount to stop its $111 billion takeover of Warner Bros. Discovery," the Hollywood Reporter just said, calling it "a sweeping legal challenge to a merger that threatens to reshape Hollywood amid the absence of the Trump administration’s intervention in big deals." The rest of the original column follows below.
This is where I should remind you that Paramount's rival for the Warner Bros. buyout was Netflix, which enjoyed for years a close and lucrative association with the Obamas. Lucrative for the Obamas, that is — I'd be surprised if Netflix didn't take a big loss on the Obamas' eight-figure production deal to produce unwatched content.
The Hollywood Reporter coyly noted Sunday that "while no decision has been made" to move, "It’s worth noting that Paramount did buy space in New Jersey last year." According to HR, the studio holds a 10-year lease on "more than 285,000 square feet of 1888 Studios’ production campus in Bayonne, which potentially makes Paramount eligible to receive a tax credit of up to 40 percent for movies and TV shows filmed in the state."
You know, just in case Paramount should decide there's a better place than California to spend its $30 billion on upcoming productions.
So far, both sides seem to be playing a game of Press Leak Chicken. Bonta hasn't (yet) tried to scuttle the deal, and nobody at Paramount has said anything official about pulling up stakes and heading east.
I guess we'll see who blinks first.
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