Hollywood Deal: Media: Paramount Sets Course for Move Out of California
Paramount Pictures is a Hollywood institution. But a dispute over the acquisition of rival Warner Brothers could reportedly lead to a change of address.
Entertainment giant Paramount is setting the stage for a move out of California, according to media reports. The trigger for the move is reportedly an antitrust lawsuit against the planned takeover of rival Warner Brothers.
The Paramount board of directors approved the start of the project as of October 1, reported the website "Puck" and financial service Bloomberg, citing informed persons. There was initially no statement from Paramount. According to the reports, Paramount CEO David Ellison spoke of a five-year plan, in which the majority of jobs in the film and TV sector are to be relocated. If the Warner takeover is successful, a studio site in Hollywood could also be sold.
As a potential new home, among others, the states of Tennessee, Georgia, and Texas are being considered. These are all states in which the Republican Party of President Donald Trump is strong. Other companies based in California, such as the automaker Tesla led by tech billionaire Elon Musk, have also relocated their headquarters to Republican states in recent years, which promise companies a freer hand and a lower tax burden.
The current antitrust lawsuit was filed by California and other states led by Democrats. California Attorney General Rob Bonta spoke of an attempted extortion. The states argue, among other things, that the merger will distort competition in popular films and thereby put cinemas under pressure.
Standstill until March
Last week, a judge set the trial for antitrust lawsuits by US states and the Screenwriters Guild for early March next year. For Paramount, this makes the deal, which is already worth around $111 billion (around €96 billion), even more expensive. This is because the Paramount leadership promised Warner shareholders additional payments of around $650 million per quarter if the takeover is not completed by the end of September. It is highly likely that Paramount will have to pay at least $1.3 billion more.
For Paramount, time is ticking. The companies set a deadline of June 4, 2027, to complete the takeover. If it expires, Warner Brothers can terminate the deal - and collect a contractual penalty of $7 billion from Paramount. At the same time, the companies can also extend the deadline. Paramount suspended the Warner purchase after the antitrust lawsuits.
Translated by urgent.news from Handelsblatt's report; automated translation may contain errors. Machine-written — it may contain errors, so check the original before relying on it.
