Tennessee tries to poach Paramount Skydance from California amid $110B merger fight

A Republican-led state is making an aggressive pitch to lure Paramount Skydance out of California as the entertainment giant battles a lawsuit from the Golden State and 11 other Democratic-led states seeking to block its proposed $110 billion merger with Warner Bros. Discovery.

Tennessee Deputy Gov. and Economic and Community Development Commissioner Stuart McWhorter wrote to Paramount Skydance CEO David Ellison on July 2, urging him to consider relocating the company’s headquarters to the Volunteer State.

“Few leaders have the opportunity to redefine an iconic company while simultaneously shaping the future of an industry,” McWhorter wrote in the letter. “As you look ahead, I encourage you to consider Tennessee as the home for that future.”

The invitation comes as Paramount weighs its long-term future amid an increasingly hostile legal and political battle in California, where Attorney General Rob Bonta and attorneys general from 11 other states filed an antitrust lawsuit Monday seeking to block the merger, arguing it would reduce competition in the entertainment industry. 

A hearing on the states’ request for a temporary restraining order is scheduled for Friday. The attorneys general have also asked the court to issue a ruling by July 22.

McWhorter touted Tennessee’s low taxes, predictable government and business-friendly policies, arguing companies relocating to the state find “more than a favorable business climate—they find a state committed to helping them succeed.”

The deputy governor also promoted Tennessee’s growing technology and entertainment sectors, saying the state is home to a deep workforce ranging from software engineers and technology professionals to musicians, entertainers and storytellers.

“Nashville’s creative heritage is unmatched, but our state’s talent extends far beyond Music City,” he wrote, adding that Tennessee is cultivating leaders in entertainment, digital content, artificial intelligence and advanced technology.

McWhorter also highlighted the state’s workforce development programs, central location and rapidly expanding Nashville International Airport, arguing Tennessee provides companies with easy access to customers and talent across nearly half of the United States.

“But what ultimately distinguishes Tennessee is our character,” he wrote. “We are a place where employees can build meaningful careers and where families can build extraordinary lives.”

“As Paramount Skydance writes its next chapter, Tennessee offers a compelling proposition: a state where creativity and technology converge, where talent is developed intentionally, and where innovation is embraced.”

The letter was sent just as reports first emerged that some of Ellison’s friends and advisers were encouraging him to move Paramount’s headquarters out of California if the merger became entangled in legal challenges.

Those reports intensified after Bonta announced the multistate lawsuit, which alleges the merger would illegally consolidate two of Hollywood’s biggest studios.

Paramount has fiercely rejected the claims, accusing the states of misapplying antitrust law and arguing the merger would strengthen competition against dominant streaming platforms such as Netflix while creating a stronger company capable of investing more in films, television and creative talent. 

The California Post asked Paramount whether the company was seriously considering leaving California. A spokesperson declined to discuss the possibility, saying only: “We’re not commenting on that. Sorry!”

Following Tennessee’s letter coming to light, The Post also asked whether Paramount had responded to the state’s invitation. The same spokesperson confirmed only that the letter was authentic but declined to comment further.

Bonta has dismissed suggestions that Paramount could relocate, previously describing the reports as a “last-ditch effort” to pressure attorneys general into abandoning their legal challenge. He argued his office has a duty to enforce antitrust laws regardless of any relocation threats. 

The fight comes as California continues grappling with a years-long decline in film and television production, with studios increasingly moving projects to states offering more generous tax incentives and lower operating costs.

Paramount’s potential departure would represent another major blow to Hollywood if the company ultimately decides to move its headquarters elsewhere, bleeding the state of billions of dollars.

The Trump Department of Justice (DOJ) approved the $111 billion mega-merger between Paramount and Warner Bros. Discovery on June 12. The Antitrust Division cleared the acquisition without requiring any divestitures or behavioral concessions.

The Post has reached out to the Tennessee Department of Economic and Community Development for further comment, including whether Paramount Skydance has responded to the state’s recruitment effort and for its reaction to California Attorney General Rob Bonta’s lawsuit seeking to block the merger.

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