David Ellison Eyes Tennessee, Texas to Escape California's Tax Siege

When reports of Ellison’s speculation surfaced, roughly 7,500 Paramount employees in Los Angeles began scouring Zillow listings for homes in Nashville and Austin. One senior executive said he would consider relocating to Nashville, .

The legal dispute centers on Bonta’s claim that Paramount’s current structure allows it to evade taxes owed on revenue generated within California. Paramount has argued the lawsuit is an attempt to stifle a merger with Warner Bros. Discovery.

## Background & Context

The lawsuit, filed in June, alleges that Paramount’s ownership structure allows it to evade taxes owed on revenue generated within California. Court documents show the case was brought by Bonta and ten other state attorneys general who argue a similar pattern among major studios.

Ellison’s interest in moving the studio dates back to 2020, when he relocated his personal residence to Hawaii and shifted Oracle’s corporate headquarters from Silicon Valley to Texas. In 2024, Oracle announced a new headquarters in Nashville, where it began constructing a 70‑acre campus two years earlier.

Tennessee and Texas both lack state income taxes, offering potential savings for executives earning six‑figure salaries. For example, a $1 million salary could retain an extra $133,000 annually in those states versus California’s maximum rate of 13.3 %.

Bonta’s complaint cites a pattern where studios restructure ownership to qualify for California tax credits while retaining revenue generated in the state. The complaint also references previous lawsuits against similar companies.

court filings, Paramount has offered a settlement that would require structural changes to its ownership and a payment of $2 billion to California, though details remain confidential. The company claims it seeks a fair resolution without compromising its business model.

Industry analysts say the lawsuit could set a precedent for other studios seeking tax benefits while operating statewide. This could reshape state‑level film incentives nationwide.

## What High-Level Discussions Reveal

Sources say Ellison met with studio chiefs Dana Goldberg and Josh Greenstein, streaming head Cindy Holland and CBS executive George Cheeks to discuss a contingency plan. The meeting was described as a “spirited conversation” rather than a formal ultimatum.

An executive told us that the discussion focused on potential relocation sites and the incentives required to make a move viable, noting that billions of dollars would be necessary to develop new facilities.

The conversation also raised questions about the future location of senior leadership, though no definitive decisions have been announced.

Executives noted that any relocation would require significant investment in sound stages, housing, and transportation infrastructure to accommodate production crews. They also discussed potential partnerships with local governments for tax incentives.

The conversation also touched on the possibility of retaining senior leaders such as Goldberg, Holland and Cheeks in new locations, but no decision has been made. Staff retention plans remain under negotiation.

Ellison has reportedly engaged with officials in Tennessee’s capital and Texas’s Governor’s office, seeking tax breaks and infrastructure support. He has also received an invitation from Tennessee Deputy Governor to consider a relocation.

The conversation also explored opportunities for joint ventures with local tech firms to support streaming infrastructure. Potential collaborations aim to leverage existing data centers in Texas and Tennessee.

## Potential Impact on Hollywood and Real Estate

If Paramount were to relocate, Los Angeles’ entertainment real estate market could experience a shift, especially in neighborhoods that house high‑earning executives. High‑net‑worth professionals may retain a presence in L.A., but their time and spending could diminish.

Real‑estate analysts predict that while the market would remain robust, demand for premium properties in L.A. could soften slightly as some industry leaders move to lower‑cost cities. The potential exodus may encourage a more distributed industry model, with production hubs emerging in New York, Nashville, Austin and other regions.

The outcome of the lawsuit will also influence whether Paramount can proceed with a merger with Warner Bros. Discovery, which could further alter the competitive landscape. Local unions such as SAG‑AFTRA could face altered bargaining positions if major studios shift production hubs away from Los Angeles.

This could trigger a reevaluation of contract terms for crew members.

Production schedules might adjust to accommodate longer travel times, potentially increasing costs for projects that rely on the dense network of vendors in California. Smaller independent producers could be disproportionately affected.

The relocation could spur job growth in the new host states, attracting talent and supporting ancillary businesses such as catering and equipment rental. However, this shift may also intensify competition for skilled crew in those markets.

## Closing

As the legal battle continues and state officials weigh incentives, Paramount’s decision remains contingent on court rulings and negotiations. The industry watches closely to see whether California’s entertainment epicenter will stay or shift its center of gravity.

A preliminary hearing is scheduled for September 15, adding urgency to the negotiations.