This is how Tennessee tries to woo Paramount and other companies away from California

Tennessee’s Pitch to Paramount Skydance

The overture arrives at a precarious time for the entertainment giant, which is currently navigating a brutal legal battle with California over its proposed $111-billion acquisition of Warner Bros. Discovery.

The state’s interest in the studio is not entirely without precedent in its current corporate strategy. Larry Ellison, Oracle co-founder and father of David Ellison, has already moved his own operations to the region. Oracle established a world headquarters in Nashville, a move that followed the company’s 2020 departure from California, where it had been based since 1977.

The Legal Challenges Facing the $111-Billion Merger

While Tennessee courts the studio, Paramount is mounting a defense in federal court against a coalition of 12 state attorneys general, led by California’s Rob Bonta, who seek to block the Warner Bros. Discovery merger. The states argue the deal would harm competition in theatrical and cable markets, alleging it violates the Clayton Antitrust Act. Paramount has pushed back, calling the lawsuit a fundamentally flawed application of the antitrust laws and arguing that the states have failed to provide the necessary evidence for a preliminary injunction.

The pressure is mounting for David Ellison, who aims to finalize the transaction by September. A failure to close by next summer could trigger a $7-billion payment to Warner Bros. Discovery. Furthermore, legal costs are escalating as the company manages a half-dozen law firms hired to defend the acquisition. On Thursday, a judge denied a separate request from individual Paramount+ subscribers to halt the merger, noting that the plaintiffs had failed to submit a single item of evidence in support of the motion, according to reporting by Variety.

Corporate Migration Trends and Tax Incentives

Tennessee’s courtship of Paramount is part of a larger trend of businesses leaving California for states with lower operational costs and fewer regulatory hurdles. Since 2005, major corporations have relocated to the Volunteer State, including Nissan, which moved its headquarters from Gardena to Franklin, and Mitsubishi Motors, which followed suit in 2019.

The trend extends into the food and retail sector, where companies have cited the California business climate as a primary factor for relocation. In 2018, CKE—the parent company of Carl’s Jr.—moved its headquarters to Franklin. In-N-Out also began a transition to Tennessee in 2023, with owner Lynsi Snyder announcing her own move to the state.

Market Power and Future Regulatory Hurdles

The core of the states’ antitrust case rests on the definition of market power.

As the legal battle continues, the outcome remains uncertain. While the U.S. Justice Department approved the merger last month, the coalition of state attorneys general continues to pursue a temporary restraining order. Paramount’s defense team, led by Jeffrey Kessler, maintains that the plaintiffs lack the standing to pursue these antitrust claims and that the states have not met the burden of proof required for an injunction. With the September deadline looming, the studio faces the dual challenge of navigating complex federal litigation while considering its long-term corporate home.