Paramount is reportedly considering leaving California as the Golden State and others are said to be preparing a lawsuit over its planned $111 billion takeover of Warner Bros. Discovery.

On Sunday, Semafor reported that  friends and advisers  to Paramount chief David Ellison have been urging him to consider relocating his corporate headquarters out of the state. The news comes as California and other states are  preparing to file  a lawsuit to block the merger, according to The New York Times.

Citing  people familiar with the discussions,  Semafor reported that Ellison is being  pushed  to consider relocating out of state, which would also move $30 million in planned spending out of California, if Attorney General Rob Bonta sues to block the deal.

However, the news outlet noted that no decision has been made regarding a move. It's worth noting that Paramount did buy space in New Jersey last year. The studio signed a 10-year lease to occupy more than 285,000 square feet of 1888 Studios' production campus in Bayonne, which potentially makes Paramount eligible to receive a tax credit of up to 40 percent for movies and TV shows filmed in the state.

Meanwhile, California has reportedly  taken the lead  on a potential lawsuit to block the merger, with states including New York, Washington and Connecticut saying they will join in, according to NYT. According to a draft of the lawsuit, it reportedly claims that the merger would hamper competition for tentpole movies, among other concerns.

For its part, Paramount has argued that the deal will boost competition in Hollywood, saying it's necessary to compete against tech giants including Netflix, Amazon and Apple.

Reuters reported July 8 that a lawsuit could be filed as early as this week. Paramount is aiming to close the deal in third-quarter 2026.

 We are confident the facts and the law support this transaction, and we will continue to defend it vigorously,  Paramount told NYT.

The studio echoed that sentiment to Semafor:  We continue to engage constructively with the remaining few regulators around the world still considering the merger

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