Paramount Mulling California Exodus Amid Antitrust Scrutiny

Paramount Skydance could be the next major company to leave California as the media giant faces intensifying antitrust scrutiny over its purchase of Warner Bros. Discovery.Makan Delrahim, Paramount’s top legal officer, said the Los Angeles-based company is “committed” to staying in California. But he also noted that “you have a fiduciary duty to shareholders.”“You have to take a look at the business environment and look to see what’s best for not only the community and the business,” he said at Politico’s The California Agenda: Sacramento Summit on Aug. 12. “And ultimately, you know, go to the place where you’re wanted.”In recent years, scores of American companies—SpaceX, social media platform X, Chevron, and Oracle—have shifted their headquarters or operations out of California and into other states. KB Home, Public Storage, Yamaha Motor, and D-Wave Quantum have been the latest businesses to relocate.Paramount secured its $111 billion purchase of Warner Bros. Discovery this past spring, beating Netflix for acquisition of the legacy entertainment empire. Warner Bros. shareholders approved the offer in April.But Paramount chose last month to pause its acquisition in the face of litigation from California and 11 other state attorneys general to block the merger. According to a court filing, both sides agreed to suspend the merger until June 2027 or until a judge rules on the case.The states say they believe Paramount would obtain too much power over the news, entertainment, and sports media industry by acquiring Warner Bros.“From the workers and artists who bring stories to life to the families who buy tickets at the box office, Paramount’s illegal takeover of Warner Bros. is a bad deal for all those who count on a competitive entertainment industry,” New York Attorney General Letitia James said in a July 24 statement.“Halting this merger while our case proceeds is a critical victory in our efforts to uphold the law and protect the film and television industries. I look forward to continuing our case to stop this illegal merger.”Paramount/Skydance Chairman and CEO David Ellison has pushed back against these claims, writing in an op-ed for The New York Times earlier this month that he does not “aspire to lead these companies to bend their newsrooms to my views.”“I believe this fight is not really about market share,” Ellison wrote. “I believe a plainer worry sits beneath the briefs and the news releases: the news. The issue is whether I can be trusted as a steward of Warner’s CNN. There has been speculation about my politics, my loyalties, my intentions.”Delrahim says the legal efforts are harming employment opportunities and that, “This merger is actually going to be good—not only for California—it’ll be good for America.”“I would love to see every policymaker who cares about jobs, who cares about high-paying jobs, who cares about union jobs—in California—speak on this merger.”While the deal is enduring regulatory hurdles domestically, Paramount has received approval from the United Kingdom, the European Union, and other foreign markets.New York Attorney General Letitia James leaves the Walter E. Hoffman United States Courthouse following an arraignment hearing in Norfolk, Va., on Oct. 24, 2025. Win McNamee/Getty ImagesDespite U.S. legal challenges, Warner Bros. is confident that Paramount’s buyout will close.“We have every expectation the transaction will close, and the company will be performing even better than the plan that we presented to [Paramount] when we did our deal,” Warner Bros. Discovery CEO David Zaslav said during an Aug. 6 earnings call with analysts.Market SkepticismShares of Paramount rose about 0.6 percent midweek, but they are still down more than 28 percent year-to-date, trading below $10.Wall Street analysts have turned bearish on the stock, with a consensus “Reduce” rating, according to MarketBeat. Weiss Ratings was the latest firm to have a “Sell” rating. Several firms lowered their targets to either “Sell,” “Hold,” or “Underperform.”While market analyst Gary Gambino says he is confident the deal will close, the true challenge will be whether Paramount can deliver on its proposed $6 billion in synergies.“At least some of this must be achieved to be successful, as both companies are struggling today on a stand-alone basis with their declining TV network businesses mostly offsetting growing streaming revenues,” Gambino said in a research note.“If no synergies are delivered the current PSKY price is probably fair, but with all $6 billion of synergies, the shares would be worth close to $23.”Kimberly Hayek and Bill Pan contributed to this report.