A federal judge has ordered Paramount Skydance and California Attorney General Rob Bonta into two days of settlement talks in October. The order lands as CEO David Ellison escalates threats to pull the studio out of Los Angeles.
Magistrate Judge Thomas S. Hixon ordered both sides to appear Oct. 14 and Oct. 15 in a San Francisco courtroom, according to court documents reported by the Los Angeles Times. The conference is a required step before the antitrust trial, scheduled to begin March 2, 2027, in Oakland before U.S. District Judge Araceli Martínez-Olguín.
The talks center on Paramount's proposed $111 billion takeover of Warner Bros. Discovery. The deal would combine HBO, CBS, CNN and the Paramount and Warner Bros. studios under one company. Bonta and 11 other state attorneys general sued in July to block it, alleging it would violate the Clayton Antitrust Act by reducing competition in theatrical and cable markets.
Bonta's office said the conference does not signal a deal is close, calling it standard procedure in a case of this size. Paramount said in a statement that it remains open to working with plaintiffs on a resolution.
Departure threat escalates
The settlement order landed the same day reports surfaced that Ellison's threat to leave California is intensifying. TMZ reported Sept. 16 that officials in both Mayor Karen Bass's office and Bonta's office were told Paramount would announce its departure from California on Sept. 15. That announcement did not happen. Paramount declined to comment.
Deadline reported that Paramount brass told key officials, including Bass and Bonta, the company is "deadly serious" about leaving after more than 100 years in California.
Paramount's board has approved Ellison's contingency plan to move the company's headquarters from Hollywood as early as fall 2026, the Los Angeles Times reported. Ellison has told associates he does not want to leave but is prepared to sell the historic studio lots and relocate if the merger is not finalized. He estimates the move could save about $500 million in taxes and other costs. Tennessee, Texas and Georgia have been floated as possible destinations.
What's at stake for LA
The financial pressure is real on both sides. Starting Oct. 1, Paramount must pay Warner Bros. Discovery shareholders a ticking fee of $7 million per day until the deal closes. If the deal collapses due to regulatory issues, Paramount owes a $7 billion break-up fee.
The L.A. County Department of Economic Opportunity (DEO) completed a 120-page report in August at the request of Supervisor Lindsey Horvath. It found the merger could eliminate about 4,500 direct film and television jobs in Los Angeles over three years, with $4.06 billion in lost business output and $547 million in lost tax revenue.
A separate study commissioned by Paramount, not an independent government analysis, estimated a full California exit could cost the state 28,990 to 57,980 full-time job-years. That study projected up to $21.2 billion in annual lost economic output, according to Reel360.
Economist Kevin Klowden, managing director at the Melcene Advisory firm, told the Los Angeles Times the standoff amounts to "a game of chicken," adding, "I'm not dismissing the threat because it is very real."
Bass's office issued a statement Sept. 16 saying the mayor is focused on protecting entertainment jobs and will fight to keep Hollywood in Los Angeles. In an August interview with TheWrap, Bonta placed responsibility squarely on Ellison, saying any decision to leave California belongs entirely to the CEO.
What happens next
Both sides must submit settlement statements to the court by Oct. 7. A separate hearing on Sept. 24 will address Paramount's request that the plaintiff states and the Writers Guild of America post a $1.88 billion bond. The U.S. Department of Justice filed a statement of interest on Sept. 16 siding with Paramount on that request.
