Paramount Skydance is preparing contingency plans to move operations from California to Tennessee or Texas as its $111-billion bid for Warner Bros. Discovery faces mounting legal and financial pressure. The relocation proposal, approved by Paramount's board according to people familiar with the matter, emerged as California Atty. Gen. Rob Bonta and 11 other Democratic state attorneys general gained traction in an antitrust lawsuit that could block the merger or make it far more expensive. David Ellison has told investors Paramount is open to a settlement, but the company is also examining asset sales including the 65-acre Paramount lot in Hollywood and, if the merger succeeds, the Warner Bros. campus in Burbank to help fund deal costs. The financial burden is growing quickly: Paramount agreed to pay Warner investors $31 a share plus ticking fees (extra payments for closing delays) of 25 cents per share for every quarter after Sept. 30 until the deal closes. Those fees could add $7 million a day, or $650 million a quarter, on top of the $81 billion Paramount already expected to pay shareholders, while a delay until next spring would also add $190 million in bridge loan financing costs. If the transaction does not close by June 4, Paramount would owe Warner Bros. a $7-billion breakup fee. The company had expected a faster path after receiving U.S. Department of Justice approval in June and clearances from 65 foreign regulators, including Britain and the European Commission. But U.S. District Judge Araceli Martínez-Olguín set trial for March 2 rather than November, extending uncertainty for employees and investors. Critics say the relocation talk looks like a pressure campaign aimed at California political leaders, while Paramount argues the merger is needed to strengthen Hollywood against Netflix and other large technology-backed rivals.