This is how Tennessee is courting Paramount and other companies to leave California
Tennessee pitched Paramount Skydance, hoping to persuade it to be the next company to leave California.
California Adv. General Rob Bonta, Paramount’s Warner Bros. He assembled a coalition of 12 state attorneys general to block his $111 billion acquisition of Discovery. Tennessee slid into Paramount’s DMs and suggested he would get better treatment in the southern state.
Corporate defections from the Golden State have increased in recent years; Many California-based companies are fleeing lower taxes and looser business regulations. For the first time this year, California does not have the most companies in the Fortune 500, after Texas was dethroned in June.
California companies packing up employees and headquarters to move to Texas has been a well-traveled road for those looking for options. Now Tennessee also wants to be in the race as its main goal.
Here’s what you need to know about their efforts:
What happened to Paramount?
In a July 2 letter to Paramount Chief Executive David Ellison, Tennessee Lieutenant Governor Stuart McWhorter suggested moving the studio’s Hollywood headquarters to the Volunteer State. Recommended Warner Bros. In the midst of a bitter legal battle with California over its merger, Tennessee may seem more attractive to Ellison. Paramount moved its headquarters from New York to Los Angeles in August of last year.
“As Paramount Skydance writes its next chapter, Tennessee offers an intriguing proposition: a state where creativity and technology converge, talent is intentionally cultivated, and innovation is embraced,” McWhorter said in his letter reviewed by The Times. “We welcome the opportunity to share our vision for how Tennessee can help shape the future of Paramount Skydance and its talented team.”
Although many in Hollywood chuckle at the idea of a major studio moving south, it’s not entirely ridiculous.
Ellison has support from his father, tech billionaire and Oracle co-founder Larry Ellison. Once a California-based company, Oracle is now moving its headquarters to Nashville.
In December 2020, the software technology company left California, where it was founded in 1977, to move to Texas. In April 2024, Oracle chose Nashville for its “world headquarters,” which began construction in February.
Have other companies moved to Tennessee?
Oracle isn’t the first company founded in Tennessee. Nissan, which has operated its U.S. headquarters in Gardena since 1960, left the state for Franklin in 2005. Nissan chose Tennessee largely due to lower operating costs.
Mitsubishi Motors also moved its headquarters from Cypress to Franklin in 2019. Mitsubishi moved to be in a state with lower operating costs and less stringent business regulations than California.
Two beloved California burger chains have moved to Tennessee.
CKE, the parent company of Los Angeles-based Carl’s Jr., made its way from California to Tennessee in 2018. CKE, Carl’s Jr. and its St. Louis chain Hardee’s under its headquarters in Franklin.
In-N-Out — arguably California’s most iconic burger spot, known for its animal fries and double doubles — is set to leave California in 2023. It established a corporate office in Franklin, and last summer owner and Chief Executive Officer Lynsi Snyder announced a move to Tennessee.
Last year, Snyder said pandemic-era restrictions and California politics motivated the decision to leave, but that In-N-Out had no plans to expand further east. The majority of In-N-Out locations are still in California.
“California has a lot of great things, but it’s not easy to raise a family here. It’s not easy to do business here,” Snyder said.
What makes Tennessee so special?
The southern state’s very business-friendly tax incentives make it an extremely attractive destination. Businesses and billionaires are drawn to Tennessee because of its lack of state revenue and property taxes. Instead, the state relies on the 7% sales tax as its main source of tax revenue. Tennessee also offers a number of tax credits and grants for businesses, including those designed to support newly relocated businesses, train new employees, and cover construction costs.
Tennessee’s central location and well-connected infrastructure supports supply chain logistics. Seven interstate highways pass through Tennessee and six of the United States’ Class 1 railroad lines operate here, allowing companies to significantly reduce transportation costs. Memphis is also home to the nation’s busiest cargo airport.
Tennessee Department of Economic and Community Development He says the state has one of the best business incentive programs in the country and was ranked the third best state for doing business by Chief Executive magazine.
Tennessee Governor Bill Lee attributes the success to the state’s competitive tax policy, workforce and quality of life.
“Companies choose Tennessee because they recognize the strength of our workforce, our strategic location and our ability to support long-term growth,” Lee said in an emailed statement. “Tennessee’s success comes from our commitment to helping businesses thrive.”
