Hollywood Exodus: Why Paramount Is Looking Beyond L.A.

Paramount Skydance’s threat to move operations out of California is putting Hollywood’s business model under pressure. The company hasn’t announced a relocation, but reports say executives are reviewing other states as California Attorney General Rob Bonta fights the proposed purchase of Warner Bros. Discovery. Paramount CEO David Ellison has warned that the company could begin the process of leaving California on Oct. 1 if the legal dispute remains unresolved. Paramount’s merger with Warner Bros. Discovery is valued at about $110 billion. The company could also face a fee of roughly $7 million for every day the deal remains incomplete and a possible $7 billion termination fee. The relocation threat comes from Paramount Skydance. Warner Bros. Discovery hasn’t announced a joint decision to leave Los Angeles. Reports have connected Paramount’s plans to Nashville, while other reports have pointed to Austin as a possible base. The company has not formally committed to either location. Much of a studio’s business can move. Corporate offices, executive staff, production equipment, sets and other physical assets can be sold, shipped or rebuilt. The company’s film and television rights als...