Kathmandu— Paramount Skydance CEO David Ellison is considering moving the company’s operations out of California should the state not engage in settlement talks regarding an antitrust lawsuit aimed at preventing its proposed $110 billion merger with Warner Bros Discovery, according to reports published Tuesday. The potential relocation, which could extend to Warner Bros Discovery itself if the merger proceeds, signals a willingness to use economic pressure on California’s struggling film industry to advance the deal. Ellison reportedly informed Paramount's senior executives he would begin the process of leaving the state by October 1st if negotiations don't commence. The dispute centers around concerns that the combined entity would control a significant portion of both theatrical films and basic-cable output in the United States, potentially stifling competition.

Antitrust Concerns Fuel Legal Battle

California Attorney General Rob Bonta is leading a coalition of 12 state attorneys general in an antitrust lawsuit to block the merger, arguing that it would give the combined company control of 27 percent of theatrically released films and a third of basic-cable programming. Bonta warned that such consolidation “not only leads to higher prices,” but also “fewer opportunities for important stories to come to life.” The Writers Guild of America (WGA) has also filed suit, claiming the merger would reduce job opportunities and depress wages for writers due to decreased competition in the media market. An analysis by Los Angeles County estimates the merger could result in nearly 2,500 lost jobs within the county alone.

Ellison Defends Merger, Raises Control Concerns

In an opinion column published in The New York Times last week, Ellison addressed concerns surrounding the merger and questioned whether the states’ lawsuit was genuinely about market share. He speculated that it may instead be motivated by a desire to control major news outlets like CNN, asserting his political independence and stating he does not seek to influence the editorial direction of these companies. However, state attorneys general maintain that combining Warner Bros Discovery and Paramount would create a near-monopoly, with four distributors controlling 86 percent of films released in the United States.

Potential Relocation and Financial Implications

Variety reported that Ellison is considering relocating Paramount to Tennessee, Texas, or Georgia—states not involved in the antitrust lawsuit—if settlement talks do not begin by October 1st. He also allegedly indicated he would pull Warner Bros Discovery out of California should the merger be finalized. The delay caused by the legal battle could prove costly for Paramount Skydance, which faces a ticking fee of $7 million per day, or $650 million per quarter, if the deal doesn’t close by September 30th. Conversely, a prolonged standoff could also harm California's film industry, already facing challenges.

Merger History and Prior Consolidation

The dispute over Warner Bros Discovery’s fate dates back to late 2025 when the sale was first announced. Paramount previously consolidated with Skydance in 2025, a deal that also drew scrutiny regarding editorial independence. That merger resulted in approximately 2,000 layoffs. Netflix initially emerged as a potential buyer for Warner Bros Discovery before Paramount secured an agreement in February.

Paramount Skydance’s stock saw a slight increase following the reports of a possible relocation, while Warner Bros Discovery also experienced gains in midday trading. The outcome of settlement talks and the states' antitrust lawsuit will determine whether Ellison follows through with his threat to move operations out of California.

(With inputs from Al Jazeera)

Originally published on abcnews.com.np.