Paramount Skydance chief executive David Ellison has begun scouting Austin, Texas, as a potential new headquarters for the studio if California Attorney General Rob Bonta refuses to settle the multistate antitrust lawsuit that is blocking the roughly $110 billion acquisition of Warner Bros. Discovery.

The move would represent a significant shift for the entertainment company, which has long been based in California. Ellison's interest in Austin comes as the merger faces legal challenges from multiple states concerned about market concentration in the media industry.

The proposed deal would combine Paramount's assets, including its film studio and streaming service, with Warner Bros. Discovery's extensive portfolio of networks, studios, and content libraries. Proponents of the transaction argue it would create a stronger competitor to dominant streaming platforms and generate efficiencies in a challenging market.

Critics of the antitrust action contend that aggressive enforcement by state officials risks stifling business combinations that could benefit consumers through expanded offerings and innovation. Texas has positioned itself as a business-friendly alternative to California's regulatory environment, attracting companies seeking lower taxes and fewer restrictions.

Ellison's scouting of Austin underscores the high stakes of the ongoing litigation. The multistate suit alleges the merger would reduce competition, though settlement talks remain a possibility that could allow the deal to proceed with conditions.

Industry observers note that relocation decisions of this scale often hinge on regulatory outcomes and long-term operational costs. Austin's growing tech and media ecosystem, along with its lack of state income tax, makes it an attractive option for executives weighing such moves.

The situation highlights broader tensions between federal and state antitrust authorities and major corporate transactions in the entertainment sector. A refusal to settle could force Paramount Skydance to pursue the deal through the courts or explore structural changes to address concerns.