Paramount Skydance representatives are set to meet Monday with the California attorney general's office to discuss a potential path to settling the antitrust lawsuit that seeks to block Paramount's takeover of Warner Bros. Discovery, according to a report by The New York Times.
The meeting follows weeks of growing pressure on both sides. California Governor Gavin Newsom, Los Angeles Mayor Karen Bass, and the Directors Guild of America have all called for a settlement. Still, people briefed on the upcoming discussions told the Times there are no assurances the talks will lead to meaningful negotiations.
California Attorney General Rob Bonta spelled out what a settlement would require on Thursday, telling CNBC that the acquisition would need "robust structural remedies." He also described what he saw as a mismatch in priorities at the negotiating table.
"[Paramount] wanted to talk about everything except for what this case is about. They want to talk about the streaming market, which we don't allege in our complaint. They want to talk about CNN, which is not a focus of our complaint. They want to talk about the foreign regulators. We want to talk about the three markets that we set forth in our complaint, where we think there's antitrust violation," Bonta said on CNBC.
The lawsuit was filed in July by a group of 12 state attorneys general. The proposed $110 billion deal would combine Paramount and Warner Bros. Discovery, merging two major film studios along with streaming platforms Paramount+ and HBO Max. If completed, the deal would create the largest portfolio of TV networks in the United States.
When announcing the lawsuit, Bonta described the stakes in direct terms. "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.," he said in a release at the time.
Not all regulators have opposed the deal. The antitrust division of the U.S. Department of Justice cleared the proposed merger in June. European antitrust regulators approved it in July. But opposition from state officials, the Writers Guild of America, and several prominent Hollywood figures has kept the deal in legal limbo.
The financial stakes of delay are significant. Paramount previously agreed to push the acquisition deadline to as late as June 2027 because of the legal challenge, and a trial is set for March. However, if the deal is not completed by September 30, Paramount will owe Warner Bros. Discovery shareholders a ticking fee that could amount to roughly $650 million in cash value every quarter, according to previous CNBC reporting. If the deal falls apart entirely, Paramount would owe WBD a $7 billion breakup fee.
The Monday meeting with the attorney general's office will be watched closely as the September 30 deadline approaches.
