PSKY's Threat To Exit California Was The Pressure Point

Fear that Paramount would follow through on a threat to leave California helped drive California Attorney General Rob Bonta and Gov. Gavin Newsom toward a settlement that cleared David Ellison’s $111 billion takeover of Warner Bros. Discovery, sources familiar with the talks say. 

The Monday agreement ended a 12-state antitrust lawsuit that Bonta had led since July and removed the last major legal obstacle to closing the deal. Bonta said the settlement was “not a vote of support for this merger.” Ellison, hours later, declared the combined company would stay headquartered in Los Angeles. Bonta noted there is no requirement in the decree that the headquarters remain in the state. 

Sources close to the negotiations say the relocation threat was the political pressure point. Ellison had told senior executives that Paramount would begin pulling operations out of California as early as Oct. 1 if the states would not settle — the date a roughly $7 million-a-day ticking fee to Warner Bros. Discovery shareholders would start to accrue. 

Possible destinations included Tennessee, Texas and Georgia. Bonta publicly branded the threat “blackmail.” Newsom, according to people familiar with the talks, later served as an unofficial mediator and warned that a courtroom fight could cost California jobs. That calculus intensified late last week, when Ellison and Bonta met one-on-one. People familiar with the meeting say Ellison made clear he was prepared to move. 

Newsom, Los Angeles Mayor Karen Bass and gubernatorial frontrunner Xavier Becerra pressed for a deal rather than a March 2027 trial in Oakland, sources told The Post. Ellison later thanked Newsom “for his support throughout this process.” Newsom called the result “a win for California workers and our creative economy.”