Paramount might join the great California Exodus.
A day after American Idol announced its move to Georgia, Los Angeles Mayor Karen Bass’ office and California Attorney General Rob Bonta’s office learned that Paramount would also be leaving the state.
Except…the announcement did not happen yesterday.
American Idol likely chose Georgia because the state “offers up to a 30% tax credit for unscripted and reality television productions that spend at least $500,000 in the state.”
Paramount apparently wants to leave California because California Attorney General Rob Bonta and 11 other state attorneys general filed a lawsuit to stop the merger with Warner Bros.
The news also comes after California canceled a meeting with Paramount, accusing the studio of “leaking details of a meeting” between the parties.
David Ellison, the CEO of Paramount, has threatened to move the studio to Texas, Tennessee or Georgia if the Cali A.G. didn’t back off and settle.
There were settlement negotiations over the last few months, but they couldn’t reach a deal. Attorney General Rob Bonta said Paramount was being unreasonable.
Did Paramount change its mind? Did it just delay the announcement?
“It’s no secret that Paramount has been making this threat despite its alleged commitment to California and Hollywood,” Bonta’s office told Fox Business. “What Paramount decides to do is Paramount’s choice alone.”
Bonta and the other state attorneys general filed the lawsuit in July to stop the $110 billion merger.
“The proposed merger, the largest in Hollywood history, would combine two of Hollywood’s five major film distributors and two of the five major basic cable channel owners, extinguishing competition between Paramount and Warner Bros., and inflicting substantial harm on movie theaters, basic cable distributors and, ultimately, audiences nationwide,” Bonta’s office wrote in a press release at the time. “In the U.S. alone, if allowed to merge, the combined titan would control nearly one-third of theatrical motion pictures, and nearly one-third of basic cable programming.”
However, I am sure tax relief plays a part in the decision. Politico reported that Paramount has been scouting places in Georgia, Tennessee, and Texas.
Why do companies merge? Usually because one of said companies is losing money and cannot survive.
Oh, look! Warner Bros. has financial struggles:
- Estimated $35 billion in debt
- Drops in cable viewership
- Struggling to keep up with streaming
Hasn’t anyone watched Wall Street? Without a merger, everyone loses a job. With a merger, at least some or most people keep their jobs.
Moving to a different state could cause more job losses. But I don’t know why anyone wouldn’t move to a state with affordable living and lower taxes.
The DOJ has sided with Paramount, claiming the merger would not limit competition.
The DOJ also sided with Paramount over a bond issue:
The move follows Paramount last week continuing to press California Attorney General Rob Bonta for a $1.88 billion bond to cover losses if it wins the cases over the deal, which has been temporarily halted. A trial has been scheduled for March, months past CEO David Ellison’s target closing date of late September.
In its filing, the Justice Department stresses that state and private parties challenging a merger — unlike the government — must post a bond if an injunction is issued. It characterizes the states’ lawsuit as a secondary enforcement mechanism subject to certain restrictions that don’t apply to the Justice Department and Federal Trade Commission.
“Congress provided for complementary antitrust enforcement by the federal government and private parties — but made clear that it was not a system of equals,” the DOJ states.
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