The federally approved merger between Paramount Skydance and Warner Bros. Discovery poses a significant threat to California’s economy, according to a former GOP operative who criticized the Trump administration's involvement. The $110 billion deal, cleared by the Department of Justice under Trump, might lead to a substantial corporate shift geographically away from Los Angeles and the state.
Steve Schmidt highlighted concerns that Paramount Skydance’s CEO, David Ellison, could move corporate headquarters and key business operations to Texas following the merger. Such a move, Schmidt argued, would severely impact jobs and economic activity in California’s largest entertainment hub, with ripple effects on the wider state economy.
Schmidt also called for California’s legislature to convene a special session to investigate the transaction—not solely for potential anti-competitive issues but on suspicions of corruption tied to the merger’s origins. Specifically, he cited a $16 million legal settlement paid by Paramount as part of Trump’s CBS lawsuit settlement, which he characterized as a “bribe” involving Paramount’s former controlling shareholder, Shari Redstone, and the new controlling interests led by Ellison.
This investigation, he suggested, should scrutinize connections between regulatory approval and corporate decision-making extending through the entire merger process. He urged California Democrats to adopt a firm stance ahead of upcoming elections given the potential economic and political ramifications.