Paramount Skydance is preparing to leave California, according to sources familiar with discussions in the Los Angeles mayor’s office and the California Attorney General’s Office. However, Paramount has not publicly confirmed the move.

The development follows months of tension between Paramount CEO David Ellison and Bonta, who is leading a coalition of 12 state attorneys general seeking to block Paramount’s proposed $110 billion acquisition of Warner Bros. Discovery. California filed its antitrust lawsuit in July, arguing that the merger would reduce competition in the entertainment industry.

Ellison previously warned that Paramount could begin moving its operations out of California on October 1 if the dispute with the state was not resolved. Texas, Tennessee and Georgia have been identified as potential destinations. Paramount’s board has approved plans for an exit under that scenario, according to reporting confirmed by Variety.

Los Angeles Mayor Karen Bass has urged Paramount and state officials to resolve the dispute, warning that the conflict could affect jobs and production in the city. The mayor’s office has specifically called for keeping Paramount in Los Angeles.

The potential departure comes as California faces concerns over the loss of film and television production to other states. A recent economic analysis prepared for Los Angeles County estimated that a broader Paramount relocation could have significant effects on employment and economic activity across the region and state.