Howdy for Hollywood? Why Paramount’s threat to leave California matters

Start spreadin’ the news… they’re leavin’ today… Wait, that’s about New York.

And maybe they’re not leaving. Paramount has been threatening to leave Los Angeles and California for a few months now. Leaving would take one of Hollywood’s “Big Five” studios out of the city, out of the state, but not out of anyone’s mind. Discussions appear to be ongoing within the studio, as FOX Business recently reported. 

Paramount and Warner Bros. have been trying to merge their operations, and they have faced pushback from state and local authorities. California sued to stop it. In the midst of that, the studio is reportedly looking at other options, playing the field, flirting with Austin, Texas, and looking for office space in Nashville, Tennessee. 

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It’s not an idle threat. Long-running talent show “American Idol” has already made the move. The ABC revival announced recently that it’s ditching Tinsel Town for Atlanta. This will change its most iconic line – “You’re going to Hollywood!” But it also changes the tax situation of everyone involved, for the better. “You’re going to Atlanta!” doesn’t have the ring that the former line had, but give it time. 

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Star after star has left Hollywood over the past few years. This is by no means an exhaustive list, but “American Idol” alum and first winner Kelly Clarkson left Hollywood and took her daytime talk show with her. Jason Eisenberg left for Indiana. Others include Glenn Powell (Texas), Harrison Ford (Montana), Matthew McConaughey (Texas), Ty Burrell (Utah), Jessica Biel and Justin Timberlake (Tennessee and Montana), and Dean Cain (Nevada) are just a sample of the stars who’ve decided California taxes and policies aren’t worth the hassle.  

TV’s Superman fired powerful parting shots at what he called the “land of ridiculousness” on his way out.

“The policies are just terrible. The fiscal policies, the soft-on-crime policies, the homelessness policies,” Cain said in June 2023. “The things that our leaders in California have been doing have driven out anybody who can really afford to get out. People are flocking out of there in droves.”

Up to now, it’s just been stars and individual productions leaving Hollywood. 

Paramount leaving would change the story entirely. Double that if the Warner merger goes through. 

Hollywood’s Big Five are, currently, Disney, Universal, Warner, Sony and Paramount. The group would be reduced to either four or three depending on how things shake out. Either way, it’s a disaster for what is the world’s entertainment production capital. For now. 

There is a pattern in most of the stars’ moves that would be replicated if Paramount moves to either of its most rumored destinations – Tennessee or Texas.

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They’re red states. With red state policies of lower taxation and regulatory burdens. They’re red states that tend not to let their cities burn while the mayor is out of the country, too. And then (probably) reelect that mayor. 

California, New York and Illinois have become very good at driving Americans and businesses away and to red states, mostly Florida and Texas. Tennessee is in the game now, and while Georgia has gone purple, its production incentives should make California green with envy. 

Texas already has the Silicon Prairie and Y’all Street and has been chopping away at its high property taxes. Florida has the beaches and sunshine and a sound taxation policy. Georgia and Tennessee have willing workforces and leadership hungry to bring in high-profile industries.  

“Go West young man!” drove the ambitious toward California in the Gold Rush days, but it doesn’t mean anything in the century of Zoom, AI and easy mobility. The Volume, the revolutionary digital stage used to shoot “The Mandalorian” TV series, means California’s weather matters a whole lot less. If people can’t get their legislatures to lower taxes, they’ll find a state that will. 

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California’s current tax collectors would just confiscate most of the gold anyway.

Paramount reportedly has yet to decide whether it’s moving or not. It may be able to wrangle some concessions out of the state and city and give them a reprieve. But the proverbial writing is on the wall, and it’s increasingly being written hundreds of miles away from Hollywood.