This is how Tennessee tries to woo Paramount and other companies away from California

This is how Tennessee tries to woo Paramount and other companies away from California - Click here to listen to this article - Share via See more from the L.A. Times in Google Search. Set us as preferred Tennessee propositioned Paramount Skydance, hoping to tempt it to become the next company to leave California. As California Atty. Gen. Rob Bonta gathered a coalition of 12 state attorneys general to try to block Paramount’s $111-billion takeover of Warner Bros. Discovery, Tennessee slid into Paramount’s DMs, suggesting it would be better treated in the southern state. Corporate flight from the Golden State has increased in recent years, with many California-based companies fleeing for lower taxes and more lax business regulations. For the first time this year, California was not the state with the most Fortune 500 companies, after Texas dethroned it in June. They fled L.A. for cheaper living in Austin, Nashville and beyond. For many, the math did not work out. California companies packing up their people and headquarters to move to Texas has been a well-traveled road for those looking for options. Now Tennessee wants to be in the running as a prime destination as well. Here is what you need to know about its efforts: What happened with Paramount? In a July 2 letter to Paramount Chief Executive David Ellison, Tennessee Deputy Gov. Stuart McWhorter pitched a relocation of the studio’s Hollywood headquarters to the Volunteer State. In the middle of a brutal legal battle with California regarding the proposed Warner Bros. merger, Tennessee may appear more appealing to Ellison. Paramount relocated its headquarters from New York to Los Angeles in August of last year. Winning a restraining order will be a crucial test for California Atty. Gen. Rob Bonta and his group. Some observers see the states’ efforts as an uphill climb because the U.S. Justice Department last month approved the merger. “As Paramount Skydance writes its next chapter, Tennessee offers a compelling proposition: a state where creativity and technology converge, where talent is developed intentionally, and where innovation is embraced,” said McWhorter in the letter viewed by The Times. “We would welcome the opportunity to share our vision for how Tennessee could help shape the future of Paramount Skydance and its talented team.” Though many in Hollywood have giggled at the idea of a major studio moving to the South, it isn’t totally ridiculous. Ellison has backing from his father, tech billionaire and Oracle co-founder Larry Ellison. Oracle, once a California-based company, is now moving its headquarters to Nashville. In December of 2020, the software tech company left California, where it was founded in 1977, to relocate to Texas. In April 2024, it chose Nashville as the home for Oracle’s “world headquarters,” which began construction in February. Have other companies moved to Tennessee? Oracle isn’t the first company to set up in Tennessee. Nissan, which had operated its U.S. headquarters out of Gardena since 1960, left the state in 2005 for Franklin. Nissan chose Tennessee for its drastically lower operational costs. Mitsubishi Motors also moved its headquarters to Franklin from Cypress in 2019. Mitsubishi moved for lower operational costs and to be in a state with less-strict business regulations than California‘s. Will Carl’s Jr. rebound to its former glory in its birthplace as a flagbearer for Californian burger culture or recede into irrelevance? Two beloved California burger chains moved to Tennessee. In 2018, CKE, the parent company of Los Angeles-founded Carl’s Jr., also left California for Tennessee. CKE consolidated 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— began a transition out of California in 2023. It established a corporate office in Franklin, and last summer, owner and Chief Executive Lynsi Snyder announced her own move to Tennessee. Last year, Snyder said pandemic-era restrictions and California policy motivated her decision to leave, but she has no plans for In-N-Out to expand farther East. The majority of In-N-Out locations are still in California. In-N-Out CEO Lynsi Snyder moves her family east to Tennessee, citing California’s difficult environment for raising kids and business operations. “There’s a lot of great things about California, but raising a family is not easy here. Doing business is not easy here,” Snyder said. What is so special about Tennessee? The southern state’s highly business-friendly tax incentives make it an extremely desirable location. Businesses and billionaires are drawn to Tennessee by its lack of state income and property taxes. Instead, the state relies on a 7% sales tax as its main source of tax revenue. Tennessee also offers a number of tax credits and grants for businesses, including many designed to support newly relocated businesses, cover costs of training new employees, and construction. Tennessee’s central location and well-connected infrastructure support supply chain logistics. Seven interstate highways run through Tennessee, and six of the United States’ class 1 rail lines operate there, allowing companies to cut transportation costs dramatically. Memphis is also home to the busiest cargo airport in the country. The Tennessee Department of Economic and Community Development says the state has one of the best business incentive programs in the country and has been ranked the third best state for doing business by Chief Executive magazine. Tennessee Gov. 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.”