RESOLVING THE LEDGER
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On July 2, Tennessee officials reached out to Paramount CEO David Ellison, gauging his interest in relocating the studio's corporate headquarters amid a rift with California over its $111 billion takeover of Warner Bros. Discovery., The Hollywood Reporter reported at the time.
Ellison, having just migrated Paramount out of New York last year, didn't consider this the optimal time for a move but needed a contingency plan so the numbers on the merger made more sense, according to a person familiar with the situation. A coalition of 12 state attorneys general was working up a lawsuit to block the deal. By Paramount's thinking, it'd win at trial but there was real concern it'd have to pay the so-called $7 million-per-day ticking fee, which starts accruing on Oct. 1. And so, less than two weeks after it was presented, Ellison took Tennessee's offer to the board at the urging of advisers in his circle to start the process of moving Paramount out of California if a settlement can't be reached.
Last Tuesday, Ellison called to convene a meeting with senior leadership for the next day at the Paramount lot on Melrose, where the company is the last legacy studio with a presence in Hollywood. It was official: Paramount had entered exploratory talks to relocate corporate headquarters, perhaps to Tennessee, Texas or Georgia.
As part of those discussions, the Paramount and Warner Bros. lots could be sold to help offset costs associated with a delay in closing the deal, the person said. Decisions related to production spend in California — perhaps Paramount's biggest bargaining chip — haven't been made, though everything is on the table. (Puck first reported last week's leadership meeting.)
When news broke in Semafor last month that Paramount was seriously considering a move out of California generally, critics dismissed the threat as a move to manufacture leverage in negotiations. That made sense. After all, California is the entertainment capital of the world. All the infrastructure is here, as is much of the talent and crew.
But putting aside the obvious brinksmanship for a moment, it is not that far-fetched that Ellison technically moves Paramount's headquarters to another state. It just might not mean what everyone thinks it does.
James Dolan reincorporated all his companies (MSG Sports, MSG Entertainment, AMC Networks, Sphere) in Nevada, though the New York Knicks, Madison Square Garden and AMC are all still squarely in Manhattan, even if some resources shifted closet to the Las Vegas home of Sphere.
Here, the critical factor is that Paramount is ultimately in the talent business: They need to attract the best creative executives, the most skilled advertising executives and the best programmers who will build the best tech stack.
Creative talent is largely based in Los Angeles and New York. The ad business circles New York. There are programmers in Austin, sure, but Silicon Valley and Seattle still dominate the scene. Look no further than Fox CEO Lachlan Murdoch, who was asked by a shareholder at last year's annual meeting (held right after New York City elected Zohran Mamdani mayor) whether he was ready to leave the city behind.
"That's an interesting question," Murdoch responded. "I can't see any scenario where we don't have a large and significant presence in New York City. It's an incredible city for us, and in our core businesses, it is the center of the news universe, certainly in this country."
"Obviously, we have bureaus in Washington, D.C., in Los Angeles, across our local television stations, but New York really is, is going to be the center of newsgathering for us for I believe, a long time to come," he continued. "It's also the center of the advertising industry, which is a very significant portion of our revenue, and we need to keep a very strong presence there to work with our advertising partners and clients."
Paramount could struggle attracting the most in-demand engineering talent to places it's currently considering. Oracle chairman Larry Ellison made a splashy proclamation in 2024 when Nashville was announced as the company's new "world headquarters," but he's had trouble meeting hiring goals, with the classification of the region in a lower geographic pay band than California or Seattle as a major obstacle, according to a Bloomberg report . Moving away from Southern California could undermine Paramount's plans to reimagine itself as more of a tech-forward company.
Outside of the entertainment business, the financial firm Citadel is moving forward with plans for a new office tower, despite founder Ken Griffin's ongoing and public beef with Mamdani. For his part, California Attorney General Rob Bonta sees weakness in Paramount's threat.
"It is an attempt to blackmail the regulators, who are daring to enforce the law," Bonta said Tuesday afternoon at a Politico event, though he added that if Paramount is willing to discuss structural remedies in a settlement negotiation, "we will listen."
"I think they are eager to enter [settlement] talks, and we are very happy with where we are. Literally, with every development in this case, we have won, and they have lost," Bonta said. "If they, in good faith, sincerely, want to engage in settlement talks with us, of course we would talk with them."
On the production front, Paramount's potential relocation comes as spending levels in the state appear to have somewhat stabilized. There was a 14 percent decline in filming in the first quarter of this year, but California saw its spend increase 2 percent as several competing regions that have historically seen big bucks from Hollywood logged big dropoffs in production spend year-over-year, according to a report from ProdPro. A decision to relocate any of its shows shooting in California, including Matlock, NCIS and Tracker , could undercut recovery efforts during a crucial period. Could Georgia see opportunity to help revive its film scene after a painful reset by offering sweete...
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