David Ellison, the media company’s leader, is threatening to pull the company out of California in the face of a lawsuit by states seeking to block its big deal. The lawsuit, filed by California and other states, claims that the acquisition would give Paramount an unfair advantage and violate antitrust rules. Paramount’s board approved the purchase of a stake in the media conglomerate, a move that has attracted scrutiny from regulators and lawmakers.

Ellison’s threat comes after the company’s lawyers warned that the deal could be halted if the lawsuit succeeds. If Paramount leaves the state, it would be the first time a major media firm has considered abandoning a state over antitrust concerns. The company says it will continue negotiations while ensuring compliance with both state and federal regulations.

The lawsuit highlights growing pressure on large media conglomerates to address concerns about market concentration. Paramount’s leadership remains committed to the deal, but the legal battle may force a reevaluation of the company’s strategy. The outcome will have implications for media consolidation and state-level regulation of big tech.