Rana Foroohar Published September 27 2026 Jump to comments section Print this page Unlock the White House Watch newsletter for free Your guide to what Trump’s second term means for Washington, business and the world Hollywood just got more concentrated. Last Monday, Paramount eliminated the last major hurdle to its $111bn bid to buy Warner Bros, after playing the ultimate trump card: it threatened to leave the Golden State. California attorney-general Rob Bonta, who led a coalition of 11 other state AGs opposing the deal, had declared the threats “blackmail”.

But in the end, the possibility of losing thousands of union jobs and millions in tax revenue was a bridge too far. Bonta signed off on the deal without the major divestments the AGs had fought for. Paramount isn’t the only brand-name company threatening to leave its historic home if it doesn’t get what it wants from state government.

The Chicago Bears board voted in June to move the NFL team’s stadium to Hammond, Indiana, a border town about 25 miles from downtown Chicago in a neighbouring red state that’s offering bigger subsidies and tax breaks. Tesla’s Elon Musk (who has extracted billions of dollars in federal and state government concessions over his career) didn’t even have to threaten to leave Texas to get the tax incentives he wanted to complete a new $10.1bn solar cell factory in Houston. The local school district simply passed them unanimously in September without a public debate.

It is no secret that blue states like California, New York, Illinois and others have been losing business to red states willing to pay companies whatever they want to move. According to one study, state and local subsidy packages have doubled since 2008, with most of the companies in question moving to places like Texas, North Carolina, Florida, Tennessee and Arizona. The most cited reasons for moving, aside from the tax breaks themselves, are a “pro-business environment” and access to “growing and diverse talent pools”, according to a 2026 report from CBRE, the commercial real estate services and investment firm, that examined corporate relocation since 2018.

That reflects the fact that Americans themselves have been moving away from more expensive coastal states, most of which are more liberal, for several years now. Cost of living is a big reason for the mass post-Covid exodus west and south, but a more libertarian culture is a factor too. Americans love their freedom, and many feel they get more of it in places with lighter-touch regulation.

To that point: while politicos once speculated that blue-to-red state migrants would eventually turn politics purple (as has been the case in places like Georgia, where many Black Americans from the north-east have moved), many of the migrants leaving coastal areas for red states are conservative themselves. A study by the Public Policy Institute of California found 39 per cent of state voters who left between 2020 and 2024 were Republicans, compared with 25 per cent of total state voters. Migration away from California is arguably solidifying partisan politics.

That in turn makes it more likely that the regulatory arbitrage will continue, as blue state voters call for higher taxes on corporations and the rich, while red states push harder for deregulatory, low-tax, pro-business policies. As one Miami real estate developer told me recently: “We love Mamdani — he sends us so much business,” in the form of rich buyers migrating south. As blue and red states continue to diverge politically, writing different rules for things like AI, data centres, corporate governance, and zoning, corporate migration to red states may well increase.

But states’ willingness to bargain to keep those companies may increase, too. Many large companies are, despite all the geopolitical challenges, still flush with cash, and predicting higher earnings in the future. Meanwhile, federal debt and deficit levels are rising (something the bond market has clearly taken note of...