Another $30 billion could leave California as state stands in the way of a massive corporate merger

There are threats, and then there are $30 billion threats.

California Attorney General Rob Bonta seems to have the magic wand that could remedy the situation, but the decision is not exactly a case of right and wrong.

'The proposed transaction will increase output, expand theatrical releases, and enhance competition.'

All my exes live in Texas

The massive $110 billion takeover of Warner Bros. Discovery by Paramount has the California AG at a seemingly unforgiving fork in the road: either allow it to go through or face an exodus of capital in the amount of tens of billions.

At the same time, Paramount CEO David Ellison is allegedly being pushed by advisers and confidants to consider moving his company's business out of California. Semafor reported that this would take around $30 billion in planned spending out of state if AG Bonta stops the long-battled merger with his new lawsuit.

If the deal were to go through, Paramount would keep both companies' lots in California, but if it doesn't, there are a few distinct possibilities.

The first and most popular choice for companies in recent years has been Texas, where both Oracle and Tesla moved in 2020 and 2021. Oracle then went to Tennessee in 2024, which also offers a lower corporate tax rate than California, but neither of these locations is where Paramount bought new office space.

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Allen J. Schaben/Los Angeles Times/Getty Images

Strictly business

Last year, Paramount picked up 285,000 square feet of studio space in Bayonne, New Jersey, another option should things fall apart in the Golden State. However, New Jersey joined California's lawsuit to block the merger, so it remains unclear if the state would still welcome Paramount if it dropped anchor on New Jersey's shores.

Paramount has defended its intentions by saying the merger is not just good for business, it's good for the business.

"This merger will create a company capable of investing more aggressively in premium content, theatrical releases, and creative talent at a time when those investments matter more than ever," Paramount said in a press release provided to Blaze News.

Over the course of several letters, Paramount argued to the California AG that Netflix, Amazon, and Disney have control over the subscription streaming service world, and neither Warner Bros. nor Paramount would be able to "catch up" with the companies without doing "something transformative."

Paramount added, "The proposed transaction will increase output, expand theatrical releases, and enhance competition with scaled streaming platforms, all of which depend on sustained and growing demand for creative talent."

Needless to say, Bonta did not agree with these calculations and offered an opposing viewpoint.

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Allen J. Schaben/Los Angeles Times/Getty Images

Not a fan

In his lawsuit, AG Bonta said the merger could inflict "substantial harm on movie theaters, basic cable distributors and, ultimately, audiences nationwide."

The merger threatens viewers with higher prices, the AG claimed, while reducing the "variety, quality, and amount of content distributed."

The following states joined California in its lawsuit: Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington.

Paramount representatives did not address questions about the potential of leaving California.

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