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California calls Paramount's threat to leave state 'blackmail' / Photo: JUSTIN SULLIVAN - GETTY IMAGES NORTH AMERICA/AFP/File
California calls Paramount's threat to leave state 'blackmail'
California accused Paramount of "blackmail" on Tuesday over a reported threat to pull the company out of the state because of lawsuits aimed at stopping its mega-merger with Warner Bros.
A dozen US states have launched legal action to block a $110 billion move that would see the firm swallow the storied Hollywood studio, claiming the debt-laden deal -- financed by Middle East oil money -- would reduce competition in the movie industry and lead to job cuts.
"In a span of weeks, Paramount agreed to halt the merger until a court decision or until June 2027, asked for a November trial, and is now back with another attempt to blackmail the state into letting an illegal deal through," California Attorney General Rob Bonta wrote on social media.
"This illegal merger will result in higher costs, fewer options, and fewer people making movies," he wrote. "My office remains committed to stopping illegal consolidation and protecting a vibrant California economy for businesses that play by the rules."
Bonta's broadside comes as trade media reported Paramount Skydance chief David Ellison, whose ultra-wealthy family is a close ally of US President Donald Trump, told senior executives he will start moving the firm on October 1 if Bonta does not negotiate a settlement to the lawsuits.
Paramount did not immediately respond to AFP requests for comment.
October 1 is significant because it is the date on which a $7 million-a-day "ticking fee" begins accruing for Warner Bros. Discovery shareholders if the merger has not closed.
Entertainment outlet Variety, citing insiders, said Ellison had devised a five-year plan to move the company from California, starting with its Los Angeles headquarters.
Any exit from Southern California -- the capital of America's movie industry -- would likely spark a wave of resignations from workers unwilling to relocate.
The war of words comes days after Britain gave the green light to the takeover, removing a major international hurdle to a deal that already has approval from the US federal government and from the European Union.
If the merger eventually closes, the new combined company would control a vast array of assets, including CNN, Warner Bros. Pictures and the HBO Max streaming service.
In addition to resistance from Hollywood figures, the deal also worries news media insiders who say Paramount is already remaking CBS News to make it more Trump-friendly, and could do the same with CNN.
(B.Smith--TAG)
