Paramount CEO’s Threat to Move Out of California

Earlier this week, Paramount’s CEO, David Ellison, issued a warning about moving the studio out of California if the state’s Attorney General, Rob Bonta, doesn’t engage in discussions to resolve the ongoing merger with Warner Bros. Discovery. This ultimatum is a stark reminder that the deadline is approaching—October 1st is just around the corner.

On Tuesday, Democratic candidate Xavier Becerra, aiming to succeed Governor Gavin Newsom, took notice and urged the attorney general to settle the matter quickly.

Becerra seems aware that Ellison isn’t merely making empty threats. If Bonta continues to obstruct the deal by refusing dialogue, Ellison will likely relocate Paramount. If the merger eventually gets the green light, it could lead to Ellison taking charge of WBD, putting over 50,000 jobs at risk.

It’s a striking situation, certainly. Many large companies have already made their exits from California, including Tesla and Hewlett-Packard, largely due to high taxes, overwhelming regulations, and a perception of poor governance. It’s hard to fathom the potential impact of losing two major Hollywood studios—it could really damage California’s reputation as a business-friendly state.

Southern California, particularly Los Angeles, is known as the entertainment capital of the world, and it’s hard to overstate how influential the entertainment industry has been in shaping California’s identity. It brings to mind other hypothetical losses—like Boston without the Red Sox or Florida without its oranges.

Ellison is serious about his intentions. His father, Larry Ellison, made a similar choice in 2020 when he moved Oracle, a huge company, to Texas. So, it’s not hard to imagine that David Ellison could follow suit.

As Governor Newsom navigates his own uncertain political future, he has acknowledged the significance of the situation, pressing for a settlement. Losing a major studio could further undermine his presidential ambitions.

Becerra has approached this situation quite wisely. He remarked that resolving this issue outside of court is preferable. His experiences have shown him that much more can be accomplished through negotiation than litigation.

While Becerra hasn’t openly supported the merger, his actions signal a favorable view. Ellison has made his stand clear with an effective threat.

It’s worth noting that any delays in this merger seem motivated by a desire to maintain CNN’s role as a dominant voice for the Democratic Party.

Even if Paramount and WBD merge, there’s little concern about a monopoly since companies like Netflix and Disney command a larger portion of the market.

The hesitance to approve the merger appears to stem from fears that Ellison and Bari Weiss could significantly reshape CNN, something many Democrats dread amidst plummeting ratings and dwindling credibility for the network.

In a recent opinion piece, Ellison expressed that if CNN were under his direction, the goal would be straightforward—to report the truth.

This desire might not align with the current interests of the Democratic Party or the existing personnel at CNN.