Los Angeles, CA — In response to a week of orchestrated leaks suggesting Paramount will leave California if its proposed acquisition of Warner Bros. Discovery is blocked, Economic Liberties released the following statement calling the threat what it is — an attempt to extort a settlement rather than defend the merger in court:

“There is a long history of corporations and dominant businesses, from Boeing to Amazon to the Mayo Clinic, threatening to leave certain states or redirect investments over policy disputes, and an equally long history of those threats being mostly hot air,” said Pat Garofalo, director of state and local policy at the American Economic Liberties Project. “Moving Paramount out of California is no simple task, so enforcers and legislators should recognize this move for what it is: An attempt by David Ellison to achieve his objectives through economic extortion rather than the rule of law.”

“If Ellison actually does it, it’s a $110 billion temper tantrum. If he doesn’t, it’s media manipulation 101. Either way, it reeks of entitlement and desperation,” said Alvaro Bedoya, Senior Advisor at the American Economic Liberties Project. “Good on Attorney General Rob Bonta for saying he won’t be blackmailed for enforcing the law. Good on the other state attorneys general for holding firm.” 

“This is an attempt to get people to freak out,” said Matt Stoller, Research Director at the American Economic Liberties Project. 

Research shows that 75 to 95 percent of companies choose their location before negotiating tax breaks, but they act as if they will pick up and leave so they can get a more favorable deal. This scenario isn’t about tax breaks, but it’s the same mechanism. Paramount wants to cause economic fear in California so residents and politicos put pressure on Bonta to drop this case. 

This is the move of a weak defendant trying to prevent an antitrust trial that they would likely lose and ram through an illegal merger that would harm workers, businesses, and the public. Their threat precedes key settlement negotiations mandated by the court, as well as the implementation of a $7 million a day ticking fee for Paramount, which Paramount itself enacted.

These leaks and insinuations about a plan to leave California come amidst an increasingly hostile pro-settlement blitz from Paramount, including threats to leave the State of New York, an AI-generated letter campaign to pressure California Attorney General Rob Bonta to settle, a demand for states and the WGA to post a $1.88 billion bond, and offensive smears against merger opponents. Amidst this push, numerous notable political leaders in California and New Jersey have called for a settlement, while the attorneys general of Iowa and Montana have gone as far as to ask the Supreme Court to block the states’ case against the merger. At the same time, workers, including unions representing writers, actors, and teamsters, continue to oppose the deal. Reporting from Variety further indicates a sizable portion of Warner staff and executives oppose the deal.

Read our memo, “The Case Against Negotiating ‘Concessions’ in a Paramount-Warner Deal,” here.

Read our fact sheet, “The Antitrust Cases Challenging The Paramount/Warner Bros. Discovery Merger,” here.

Learn more about Economic Liberties here