California AG Calls Paramount's Relocation Threat 'Blackmail' as Merger Battle Escalates

California Attorney General Rob Bonta has accused Paramount Skydance CEO David Ellison of attempting to "blackmail" the state, after Ellison threatened to pull Paramount out of California unless Bonta agrees to settlement talks over a blocked $110 billion merger.

The clash centres on Paramount's proposed acquisition of Warner Bros. Discovery — a deal that would combine two of Hollywood's largest studios. On 13 July 2026, California and 11 other state attorneys general filed a lawsuit to stop it, arguing the takeover would harm competition (Reuters). The 12-state coalition is led by Bonta.

Ellison told Paramount senior executives he is prepared to relocate the studio out of California — and Warner Bros. as well, if the merger closes — unless Bonta agrees to negotiate a settlement, according to Variety. Ellison said the Paramount Skydance board has approved the exit plan, and that the process of leaving California would begin on 1 October if settlement talks have not started.

Bonta fired back publicly on his official X account, @AGRobBonta. He wrote that Paramount had previously agreed to halt the merger until a court ruling or until June 2027, and had asked for a November trial, "before again attempting to blackmail the state into letting an illegal deal through" (Variety). In the same post, Bonta said "Paramount has lost the plot as it continues to lose in court," and that the tactic "didn't work the first time" and "won't work this time."

Bonta also published a guest column in Deadline on 11 August laying out his legal case against the merger (Deadline via Facebook). The column and the X post came on the same day.

The dispute has been building for months. As early as 5 June 2026, Bonta signalled that California would "soon decide" whether to sue, before the 12-state coalition filed the formal challenge five weeks later (Reuters).

The stakes are considerable. A studio relocation out of California would affect the crews, writers' rooms and production staff who work on Paramount's television and film output — the kind of workforce that anchors entire local economies. The merger itself, if it survives the legal challenge, would reshape the ownership structure behind a vast library of titles across streaming and linear television.

For now, the two sides are not talking. Bonta is pushing for a November trial. Ellison has set an October deadline. Neither has blinked.