California Attorney General Rob Bonta on Tuesday denounced reports that Paramount might relocate its studio operations out of state unless officials drop a legal challenge to its proposed merger with Warner Bros., calling the threat a "blackmail" attempt.Variety reported Tuesday that Paramount-Skydance CEO David Ellison told company executives last week he is prepared to move the combined studio business away if Bonta and other state attorneys general fail to negotiate a settlement over their lawsuit blocking the Warner Bros. Discovery merger.Ellison said the relocation process could start as early as Oct. 1 without settlement talks. Paramount has not commented on the threat, which was first reported by newsletter Puck.Bonta firmly rejected the alleged warning and reiterated his intention to challenge the deal."In a span of weeks, Paramount agreed to halt the merger until a court decision or until June 2027, asked for a November trial, and is now back with another attempt to blackmail the state into letting an illegal deal through," Bonta wrote on X. "Paramount has lost the plot as it continues to lose in court. It didn't work the first time — on the eve of our July lawsuit - - and it won't work this time.”"This illegal merger will result in higher costs, fewer options and fewer people making movies. My office remains committed to stopping illegal consolidation and protecting a vibrant California economy for businesses that play by the rules."A federal judge in northern California set a March 2 trial date last week for the antitrust lawsuit. U.S. District Judge Araceli Martínez-Olguín noted the trial will run from March 2 to March 19 of next year in Oakland federal court.The timeline is critical because Paramount must pay roughly $7 million for every day the transaction fails to close after Sept. 30 under an agreement with WBD.California Attorney General Rob Bonta (Reuters)Paramount previously indicated the acquisition would remain paused while contesting antitrust suits brought last month by 12 state attorneys general led by California. Consequently, the parties involved and the Writers Guild of America agreed to call off an Aug. 3 preliminary injunction hearing.Bonta previously noted that if the court rules against the merger, the deal would be blocked pending appeal.In a quarterly earnings report last month, Ellison reiterated that the company "fully expects" the deal to complete."As it relates to the planned acquisition of Warner Bros. Discovery, we fully expect the transaction to close and remain focused on preparing for a successful combination once it is complete," Ellison wrote in a letter to shareholders.(Getty)Following the state suit filed July 13, the Writers Guild of America also sued to stop the transaction, claiming harm to writers and the job market.The guild contends Paramount's acquisition of WBD would cut opportunities, suppress wages, and harm working conditions for writers. It argues that removing a key competitor and forming a dominant company would reduce film and television output by giving the merged firm greater leverage to cut back production.The Screen Actors Guild-American Federation of Television and Radio Artists also backed the lawsuits challenging the consolidation."Our members have every right to expect that the government will do thorough regulatory oversight when a deal of this magnitude takes place. The workers in this industry should not have to rely on promises and aspirational statements," SAG-AFTRA President Sean Astin said. "These companies have the ability to commit to making more films and shows in this country and they should. This isn't a conversation about shareholder value, it's about the survival of the entertainment business in America."A Paramount spokesperson previously maintained the planned combination "is lawful, pro-competitive, and will benefit consumers, creators, workers, and the entertainment industry."The studio stated that the European Commission formally approved the acquisition, alongside regulatory bodies in the United States, Australia, Brazil, Canada, China, Kuwait, Montenegro, New Zealand, North Macedonia, Saudi Arabia, Serbia, South Africa, South Korea, Ukraine, and the regional competition authority for the Common Market for Eastern and Southern Africa.