Nashville rumored to be possible destination for Paramount relocation

Driving the news: Paramount CEO David Ellison is trying to close on the Paramount-Warner Bros. Discovery merger.

• California leads a coalition of states suing to stop the merger for antitrust reasons. In response, Ellison has floated relocating Paramount's business to a place where the cost of living and tax burden is lower than California.
• In addition to Nashville, Atlanta and Austin are mentioned as relocation possibilities.

By the numbers: The merger is valued at $111 billion.

• To put that into context: Nashville business boosters act giddy at the prospect of attracting an MLB team here. The most valuable MLB franchise is worth $8.2 billion, according to Forbes.

What Nate's hearing: News coverage in Variety and the Hollywood Reporter and an op-ed in the New York Times cranked up the rumor mill last week. I reached out to political insiders to get their thoughts, expecting the idea to be dismissed as goofy.

• Instead, the responses I got ranged from "I actually think that could work" to "That's going to happen."

Yes, but: Nashville could simply be a pawn in Ellison's political standoff with California politicians, relegating the rumor to Hollywood trade industry fodder, and nothing more.

The case for Paramount to Nashville

In the event Ellison is serious about a relocation and not merely playing public relations chicken with a strident California attorney general, here's the case for why Nashville makes sense.

• The tax burden is lower here. It's why major companies like Starbucks, Amazon and AllianceBernstein set up shop in Nashville.
• Thanks to country music, the entertainment industry thrives here, making Nashville a cultural fit for executives who may be forced to move.
• The local film and TV business is a minuscule fraction of Southern California's — obviously — but it is growing. Productions of "Nashville," "9-1-1: Nashville" and Reese Witherspoon's production company are prime examples.

Inside the room: To pull off a deal like this, it would take tax incentives. Hanging over the debate about Paramount's future is the fact that film and TV productions are increasingly looking outside California to other states and countries that offer generous incentive programs.

• The Ellison family has found success negotiating such incentives in Nashville.

• The Oracle headquarters project on the East Bank is finally making progress, though slower than expected.

The intrigue: There's also the X-factor of the next governor. U.S. Sen. Marsha Blackburn, the heavy favorite in the race, served as the executive director of the state's film, music and entertainment commission in the 1990s.

• A massive relocation of Paramount would seemingly be in her wheelhouse.

The case against Paramount to Nashville

Despite the advantages for Paramount to move, Hollywood observers are casting doubt on such a deal.

• Like Nashville's country music industry, Hollywood is still very much a place where personal relationships are foundational to doing business. If executives are shipped out to Nashville, it would undercut their ability to close a deal over dinner at Osteria Mozza.
• To use a Nashville analogy: Even if it were cheaper to record a record in some other city, one couldn't transport the Music Row infrastructure overnight since all of the top producers, musicians, songwriters and executives call Nashville home.

Even if Paramount is serious about a move, there would be steep competition from cities like Austin and Atlanta, which have more established film and TV industries.

The bottom line: Sharon Waxman, editor in chief of The Wrap, concluded her New York Times op-ed by quipping, "And let’s face it, no one really wants to move from Beverly Hills to Nashville."

• That would be news to Nashvillians, who have watched Californians move here in droves.
• Time will tell if Paramount-to-Nashville turns out to be a record-setting economic development project or simply Hollywood tabloid gossip.