David Ellison: Me, Move? I Love L.A.

Paramount CEO David Ellison Valerie Macon / AFP via Getty Images

Fresh off brushing past California attorney general Rob Bonta with a settlement in which arguably only minor concessions were made, David Ellison is ready to re-commit to the idea of keeping his Paramount and Warner Bros. Discovery empire in Los Angeles.

“Now that we reached and announced a settlement, we’re eager to get to work building a stronger Hollywood,” Ellison said in a statement. “Let me be clear: the newly merged company will be headquartered in Los Angeles. We aren’t going anywhere. Our history is here and this is where our future is being built.”

This brings the mogul back in line with his tune circa February of this year, when he was making promises to California politicians about how he would boost local production and bring back glory to Hollywood’s hometown. Then California attorney general Rob Bonta and his posse of 12 states filed a lawsuit in July that seemingly had Paramount on the ropes.

And then the whispers started. You know, Ellison and his family have deep ties to Tennessee, he could pull up stakes and move Paramount there. Texas officials want the state to be the corporate headquarters capital of the United States, plus they have lower taxes — how does Austin sound for a Paramount base?

Even at the time, these hints were chalked up to a game of high-stakes chicken over the summer between Ellison and California. Bonta himself, in an interview with The Hollywood Reporter in August when he struck a more defiant tone about the lawsuit, characterized it as a “Hail Mary” move and said “it seems like they’re grasping at straws.”

But with each passing day, and with the threat of a $7 million-per-day ticking fee that Paramount would have to pay starting in October, the threat of a relocation kept feeling a bit more serious. Also, other states appeared to start taking the rumors seriously, too, which probably helped kick up the dust even more.

Now there’s a legal settlement in place between the 12 states and Team Ellison dictating some terms for what “Stay in L.A.” means. Per the consent decree, the Warner Bros. and Paramount lots in Los Angeles County can’t be sold during the commitment period, which is five years. (Right now the Warner Bros. lot sits on about 140 acres, including the Ranch, while Paramount’s Melrose Ave footprint is about 65 acres.)

It’s worth noting that up until Ellison’s buy, Paramount had been headquartered in New York (Paramount has an office in Times Square), and only last year had moved to L.A. And outside of the studio lot infrastructure itself, there is no commitments in the consent decree for, say, having a new office complex in another market outside of L.A. Paramount and Warner Bros. is a sprawling empire, after all. But the question was never really about the fine-print of where the corporate HQ was. It was about intent.

Through this summer of leaks, the implied message from Team Paramount was that Ellison would be ready to potentially do damage to the Los Angeles entertainment economy if things didn’t go his way in the court battle. There were plenty of locales that would be happy to greet Paramount and set up a water tower and some soundstages.

Just look at the production flight that had been plaguing L.A. for years on individual feature films and television series. Local officials feared that a Paramount move would be the straw that broke the camel’s back, despite California doubling its tax incentive annually to $750 million and pledges to cut red tape and make it easier to shoot in state.

Now that things did go the way that Paramount hoped as far as the settlement, it may prove tougher to just hit rewind to when Ellison was writing letters in March to California lawmakers saying, “my expectation that the commitments I have made will preserve and expand good-paying film and television jobs in the area.”

But as of this settlement Monday, we’ve now hit full circle in that regard. Next up, if the deal closes as expected in a couple weeks, is the plan to start finding those $6 billion in cost synergies between the companies while fulfilling the rules-of-the-road in the consent decree. If Los Angeles County’s own commissioned report in June is any indicator, there will be a lot of redundancies up ahead as the studios start integrating: “The merger places about 2,495 jobs in Greater Los Angeles County and about 6,000 globally at potential risk, mainly in corporate, tech, real estate, and other shared functions due to duplicative roles across the two companies.”