David Ellison is eager to reach a swift resolution in the antitrust case filed by 12 states seeking to block the Paramount-Warner Bros. Discovery merger. And, in a move seemingly aimed at gaining leverage in the showdown, he’s prepared to start moving Paramount out of California as soon as October unless the merger is resolved through a settlement with the state’s attorney general, Rob Bonta, Variety has confirmed.

Ellison told Paramount senior execs last week that he will relocate Paramount’s operations outside of the state of California if the deal doesn’t close by Sept. 30, sources confirmed to Variety. The final hurdle to closing the Paramount-WBD merger is the states’ antitrust case; therefore, if Bonta does not agree to negotiate a settlement in the case by then, the company will begin the process of exiting California starting Oct. 1. Ellison told his team the Paramount Skydance board has approved the move.

Paramount declined to comment. Ellison’s threat to relocate Paramount in retaliation for California’s Bonta leading the charge to kill the WBD deal — a move that would include much of its studio operations, over time — was first reported by industry newsletter Puck.

In response, Bonta called Ellison’s planned exit from the state an “attempt to blackmail the state into letting an illegal deal through.”

“Paramount has lost the plot as it continues to lose in court,” the attorney general wrote in a post on X. “It didn’t work the first time — on the eve of our July lawsuit — and it won’t work this time.”

Bonta has not publicly said what concessions from Paramount-WBD he would consider acceptable enough to take the lawsuit off the table. But the Democratic attorney general has said any remedies would need to be “structural” (i.e., divestments) rather than “behavioral” (e.g., imposing certain production quotas).

The reason Ellison gave to his senior leadership team for the relocation out of California was that Paramount will need to cut costs once the “ticking fee” payable to Warner Bros. Discovery shareholders kicks in starting Oct. 1. On that date, Paramount will begin accruing fees owed to WBD shareholders of $7 million per day until the deal closes. The trial in the state AGs’ lawsuit is scheduled to start March 2, 2027, roughly five months after that, so Paramount would be on the hook to pay around $1.2 billion to WBD shareholders by the time the trial is scheduled to conclude.

At the Aug. 5 meeting on Paramount’s lot, Ellison told his 12-member senior executive team he expects Paramount to prevail in the antitrust case against the states. However, he also indicated that if Bonta balks at talks and the Paramount-WBD merger is still in limbo, Paramount will start packing up and moving out of the Golden State in less than two months.

Paramount’s L.A. headquarters would move out of the state first, with tax incentives from states allegedly helping to cover the costs of the relo. Ellison also outlined a five-year plan to shift most studio jobs out of California, sources said.

In a sign of how sudden this decision is, Paramount hasn’t yet decided where its new home might be; the company is considering destinations including Georgia, Texas and Tennessee. Paramount executives at the Aug. 5 meeting included Paramount’s studio bosses, Dana Goldberg and Josh Greenstein, and CBS and TV media chair George Cheeks, a company insider confirmed.

Ellison’s announcement of the Oct. 1 start date for Paramount’s potential move out of SoCal — which would obviously be disruptive and logistically fraught — caught some execs off guard. A large-scale exit from California could prompt a wave of employees to quit, particularly as major layoffs loom if Paramount ultimately consummates the Warners merger.

Ellison and much of the senior team work out from the Paramount Pictures studio lot, located at 5555 Melrose Ave. in Hollywood. However, in SEC filings, Paramount Skydance continues to list 1515 Broadway in New York (where the former Paramount Global had its HQ) as the “address of principal executive offices.”

The notion that Ellison would exit California if the state AGs sued to block the Paramount-WBD merger was floated in an item last month by Semafor. According to that report, Ellison’s “friends and advisers” were “pushing the media executive to consider shifting his business out of the state.”

At the end of 2025, Paramount Skydance had about 17,600 workers worldwide. Warner Bros. Discovery had 35,500. If the merger does cross the finish line, Ellison and his team are expected to slash thousands of jobs at the combined company to achieve cost savings and streamline operations.

David Ellison’s father, Oracle founder and billionaire Larry Ellison, has personally guaranteed $46.7 billion toward the megadeal. In addition, Paramount has lined up $24 billion in commitments from the sovereign wealth funds of Saudi Arabia, Qatar and the United Arab Emirates. According to Paramount, the three Middle Eastern funds would own 38.5% of the combined Paramount-Warner Bros. In SEC filings, Paramount has said that foreign investors backing the WBD bid will not have board seats or own any voting shares, and that therefore a U.S. government review of the deal’s financing is not warranted.

RELATED: David Ellison Is Promising Theater Owners Contractual Guarantees for Paramount-Warner Bros. 30-Film Annual Slate. But What if Moviegoers Don’t Care?