“Paramount has deep roots in Southern California. My vision is to stay true to our roots,” wrote David Ellison in a letter to lawmakers representing the state in February.
What a difference a few months makes. Now the mogul is locked in a protracted legal battle with the attorneys general of California and 11 other states as he attempts to consummate a $111 billion mega-merger with Warner Bros. Discovery. And he’s in a race against time before a ticking fee penalty of $7 million a day kicks in at the start of October if the deal isn’t done.
And each week, it seems, there’s a new leak suggesting the Paramount CEO may be exploring other options to move his company’s headquarters — and taking the idea seriously.
On Monday, it was Puck that kicked off another cycle when reporting that Ellison told staffers in a senior leadership meeting he plans to move the company headquarters out of state if the antitrust suit isn’t settled by Oct. 1, when that penalty fee begins. This leak underscores that urgent timetable and could be seen as both a negotiating tactic and a real consideration to pull up anchor for new shores.
As The Hollywood Reporter reported in July, Tennessee has been one of the states courting Paramount. Now add Texas, Georgia or another state to the list. The insinuation is that even if the merger eventually goes through, the two historic Hollywood studios could (theoretically) be moving out of their historic homes.
So the notion that Ellison would abandon Paramount’s historic place in Hollywood (literally: Paramount’s 65-acre lot, parts of it a century old, is the only big studio in the neighborhood, after all) to finalize his mega-merger isn’t a new one. But this narrative also represents a notable change in tune from Ellison, a California native himself and the product of two California universities, who not long ago was courting state politicians to win their approval for his mega-transaction. In the same letter where he laid out his vision for Paramount staying “true to our roots,” he pointed out that it was his regime that relocated the company’s headquarters from New York to the Paramount studio lot in L.A. Paramount also made a commitment to produce more movies for theatrical release, “all of which means more activity in Hollywood and local jobs,” he claimed.
The letter was sent to lawmakers Sen. Adam Schiff and Rep. Laura Friedman in response to their concerns about what the merger would mean for jobs in the state. “Our pledge to continue to license Paramount and Warner Bros. film and shows means there will be additional opportunities available for creative talent in Los Angeles,” Ellison continued. “Our pledge to continue to be active buyers of content from third-party studios and independent producers also means more good-paying jobs in Los Angeles.”
For the politicians who received that February letter, the threat to leave the state is prompting a bit of whiplash. “The reason Paramount has been an entertainment powerhouse for over a century is the crews, the writers, the artists, and the local businesses in my district. They are the best in the world at what they do,” said Friedman in a statement to THR. “It would be a massive mistake for Paramount to leave them behind, and it’s wrong to treat the workforce that built Paramount as a bargaining chip in a legal matter.”
In his own statement, Schiff said his “north star” was to “protect the jobs of the hardworking Californians” in entertainment. “I hope that Paramount will stick to their commitments to build a stronger Hollywood and keep production here,” he added.
And Ellison isn’t the only one at Paramount to have paid lip service to the virtues of working in California. Two of Paramount+’s major upcoming new shows, the Clueless sequel starring Alicia Silverstone and the original series Ascent starring Viola Davis, are filming in L.A. They’re joining other series under the Paramount corporate umbrella, like Matlock, Tracker and NCIS: Origins, that already shoot in the state. As a result, Paramount landed more than $37 million in the last round of California film and television tax credits.
“We’re proud to continue investing in the local creative community and production talent who bring our stories to life,” said CBS Studios president David Stapf in a statement on Monday, before the latest reports of Paramount’s roving eyes emerged.
How real is the threat to flee the state, then, or is this a laughable pressure tactic? As THR has previously reported, it’s not impossible to imagine Ellison relocating the company headquarters, but the rubber would meet the road on attempting to persuade executives to move their studio work to, say, Nashville or Austin or Atlanta. All told, about 17 percent of the Paramount’s workforce is based in L.A. alone, according to a study from CVL Economics, while 13 percent of Warner Bros. Discovery is based in the area. Good luck to those Paramount execs trying to meet an up-and-coming writer-creator for a casual coffee on Music Row or convincing anyone major other than Taylor Sheridan (who is soon to bid goodbye to the studio anyway) to briefly pop by for a meeting in Texas.
That’s not to mention the significant ill will that would be produced by kicking a local industry while it’s down, all while Ellison’s representatives have been presenting him for some time as the savior of Hollywood and its jobs, if only his deal goes through. (“We will continue to fight against any attempt to derail a deal that plainly benefits consumers, creators, and the industry as a whole,” a Paramount spokesperson said in response to a town hall where Hollywood workers aired concerns about job loss as a result of the mega-merger.) The production downturn in California has been so severe that it’s created a grassroots movement to improve production conditions and become a major campaign narrative for L.A.’s mayoral candidates. It’s been a marketing tactic for television series and films to flaunt that they were made locally, rather than in, say, Romania or Australia.
For now, Ellison is attempting to ward off a trial with a stick, rather than a carrot, but the message keeps shifting. Maybe we should take his word for it that he means business on leaving California. But he said the opposite not too long ago.
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