Paramount CEO David Ellison Backing Bipartisan Federal Film Tax Incentive

Paramount Skydance CEO David Ellison has been quietly backing a bill to launch a federal film tax incentive, with lawmaker support on both sides of the aisle, multiple sources told Variety.

Ellison has spent at least six months in exploratory meetings for the proposed legislation, two sources added, and on Monday evening was present in Washington, D.C. to break bread with top Republican leadership, where the matter will be discussed.

Names of politicians from both parties involved in the bill were not immediately available. More than one source noted the irony of Ellison’s Monday night meeting occurring the same day that a group of state attorneys general filed suit to block the mogul’s acquisition of Warner Bros. (his general counsel, Makan Delrahim, is at his side in D.C.)

A federal film tax incentive would provide significant financial relief to content producers fleeing the U.S. for rebates around the world. A federal program would also sweeten the deal in Hollywood’s home state of California, whose AG Rob Bonta is leading the charge on the searing antitrust lawsuit waged today against Ellison over Warner Bros.

Hollywood’s labor unions — including the DGA, IATSE and SAG-AFTRA — have also taken up the mantle on a federal incentive. In its just-negotiated contract, the DGA stipulated that top studio execs must participate in lobbying for more favorable domestic filming incentives.

California has a TV and film tax credit worth $750 million, but no such program exists on the national level.

Bonta, along with a coalition of 12 other states, alleged in their antitrust suit that the $111 billion merger between the two legacy studios violates the Clayton Act by weakening competition in three markets: wide-release theatrical distribution, “top-grossing” theatrical distribution, and basic cable licensing. If Paramount and Warner Bros. merged, the suit argues, the combined company would control 27% of the wide-release theatrical distribution market, 30% of the submarket comprising “anticipated blockbuster films” and 27% of the basic cable bundle.

“The unlawful merger of these two entertainment behemoths would lead to higher prices, lower quality, and less content for film and television, harming movie theaters, basic cable distributors, and ultimately, audiences on every sofa and movie theater seat in the U.S.,” Bonta said in a statement on Monday.

Paramount, of course, fired back with a scathing statement after the suit was filed. The company said in the statement, “The lawsuit filed by the state attorneys general, in the most generous light, reflects a fundamentally flawed application of the antitrust laws and is wrong on both the facts and the law. Delaying this transaction will only harm entertainment workers who have already suffered over recent years as technology has disrupted their livelihood and cost California tens of thousands of entertainment jobs.”

The Department of Justice already approved the deal in March, essentially clearing the way for Ellison to complete his plans for a combined Paramount-Warner Bros. Hollywood unions and stars have not been keen on the transaction, and fear an already struggling Hollywood could be further pushed underwater by a historically ineffective tactic of mega-merging two media behemoths.

Politico’s Daniel Miller was the first to report Ellison’s interest in the federal film incentive.