Paramount Skydance is scoping out commercial property in Nashville as it weighs moving its operations out of Los Angeles, according to sources with knowledge of the search.

The studio has looked at roughly 400,000 square feet of potential space in the Tennessee capital that could house the company within two to three years, as reported by Politico.

Because no existing buildings match that timeline, representatives have reportedly spoken with at least two real estate developers about building a new facility, and were recently shown a vacant multi-acre site outside downtown Nashville.

The real estate search coincides with an antitrust lawsuit from a 12-state coalition, led by California Attorney General Rob Bonta, aiming to block the company’s $110 billion purchase of Warner Bros. Discovery. Critics have pointed to the relocation threats as an effort to gain leverage in settlement talks.

“His intent is to be committed to California,” Paramount Chief Legal Officer Makan Delrahim said of CEO David Ellison during an August summit, before adding, “There is a point at which you have a fiduciary duty to shareholders.”

“You have to take a look at the business environment and look to see what’s best for not only the community and the business,” Delrahim said. “And ultimately, you know, go to the place where you’re wanted.”

Leaving the historic Melrose Avenue lot — which spans more than 60 acres, features 29 soundstages and includes the Bronson Gate — would deal a major economic blow to Southern California, where more than 42,000 film and television jobs were lost between 2022 and 2024.

Local officials have monitored the plans closely, with sources indicating that Los Angeles Mayor Karen Bass and Attorney General Bonta were told an exit announcement could come on Tuesday, though that deadline passed without a formal word.

“Mayor Bass is focused on protecting and fighting for jobs in L.A., including critical jobs in the entertainment industry that have been a vital part of Los Angeles’ economy,” a spokesperson for City Hall told Deadline, noting that the mayor “has been engaged on this issue and will continue to fight to make sure L.A. is home to Hollywood.”

Bonta’s office addressed the situation by stating: “We cannot comment on a company’s plans. It’s no secret that Paramount has been making this threat, despite its alleged commitment to California and Hollywood. What Paramount decides to do is Paramount’s choice alone. We’ll continue to apply the law without fear or favor and continue to be open to coming to the table for good faith discussions.”

The case heads to trial in March. Starting October 1, Paramount faces a daily penalty of roughly $7 million for each day the merger remains incomplete.

Tennessee’s recruitment of the studio aligns with existing ties between the state and the Ellison family. Tech firm Oracle, co-founded by Larry Ellison — who is backing his son’s acquisition financially — announced its corporate move to Nashville in 2024.

A Los Angeles County Economic Development Corporation report estimated that moving headquarters out of state would result in the permanent loss of tens of thousands of jobs and billions in economic output, Deadline reported. However, the report also pointed out that Ellison has committed to maintaining a minimum output of 30 film releases per year.

The opposing parties are scheduled to hold court-mandated settlement discussions next month.