Paramount CEO David Ellison is facing pressure from his advisers to consider relocating his company out of California after the state government filed a lawsuit to block his planned takeover of Warner Bros. Discovery, as reported by Fox Business.

The reported $111 billion merger, expected to close later this year, would unite two of Hollywood’s most prominent studios under Ellison’s leadership.

However, the plan has stirred significant controversy and prompted concerns about reduced competition in the entertainment industry.

California Attorney General Rob Bonta on Monday led a coalition of twelve state attorneys general in suing to halt the deal.

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The lawsuit claims the merger would "lead to higher prices, lower quality, and less content for film and television," potentially harming theaters, cable distributors, and audiences nationwide.

Amid the escalating legal battle, insiders told Semafor that Ellison’s confidantes are urging him to move Paramount’s corporate headquarters and redirect as much as $30 billion in planned spending outside of California if the state continues to intervene.

These advisers, speaking to Semafor on condition of anonymity, noted that no final decisions have been made.

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They added that the idea could serve as a form of strategic brinkmanship since much of the industry’s production already takes place outside Hollywood.

Under the current deal, Paramount has committed to keeping both its and Warner Bros.’ lots operational if it continues doing business in California.

Yet the growing dispute has fueled speculation that Paramount could follow companies like Oracle and Tesla, which have previously left the state amid regulatory tensions.

Paramount did not immediately respond to requests for comment on the discussions. Semafor’s report also highlighted that Ellison remains hesitant about leaving California and its entertainment infrastructure, despite the mounting pressure.

In a statement to the Times, Paramount said it was prepared to address any "legitimate antitrust issues" but insisted that the Warner Bros. Discovery merger "raises no such concerns."

Ellison, the son of billionaire Oracle co-founder Larry Ellison, gained control of Paramount last year following an $8 billion merger between Skydance Media and Paramount Global.

The proposed acquisition of Warner Bros. Discovery would vastly expand his footprint in film, television, and streaming, making him one of the most powerful figures in Hollywood.

The Department of Justice recently concluded an eight-month investigation into the proposed merger, determining that it would not harm competition or consumer interests.

The DOJ said it reviewed more than two million documents and found the deal could actually enhance competition across various entertainment sectors.

Despite the DOJ’s clearance, state attorneys general maintain independent antitrust authority.

Their lawsuit, filed in the U.S. District Court for the Northern District of California, alleges that the merger violates Section 7 of the Clayton Act, which prohibits mergers that could substantially reduce market competition.

Attorney General Bonta urged both companies not to finalize the merger until the court process concludes and signaled his intent to seek a temporary restraining order if they proceed prematurely.

"California's film and entertainment industry touches the lives of Americans daily — it comes into the living rooms of families, has a starring role in many young people's first dates, and is a point of immense pride and employment for Californians up and down our state," Bonta said.

He warned that industry consolidation could limit creative opportunities and raise costs for consumers, adding that "America has no kings in government or our economy."

The next stage of the legal proceedings could determine not only the fate of the merger but also whether California retains one of its most prominent entertainment companies.

For now, Ellison appears caught between his advisers’ calls to relocate and his own caution about severing Paramount’s historic ties to the state.

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