California Attorney General Rob Bonta cancelled a scheduled mediation session with Paramount Skydance and said he will not return to the negotiating table until the company stops leaking details of their private discussions to the press.
Bonta spoke to TheWrap in an exclusive interview on Monday after walking away from the session. When asked whether talks could restart this week, he said: "It's up to them." He continued: "They've got to figure out where the leaks are and shut them down. And once they figure that out, we'll be happy to talk with them. I don't know how long it'll take them to figure it out and to fix it, but when they do, we're ready."
The cancellation followed a Wall Street Journal report published Sunday that disclosed details of a preliminary conversation between the two sides. Bonta said he was not only upset about the leak but also about how the information was characterized. "They're being cute. They're playing games. They are purportedly disclosing confidential information from our discussions, but misrepresenting it to the press. That's completely inappropriate," he said.
Paramount denied leaking the meeting and said in an earlier Monday statement that it shares Bonta's concerns about the "public discussions and misreporting that has surrounded this deal" and remains "hopeful and stand ready to continue good faith discussions."
Bonta was direct about where he places responsibility. "All of this is on them. This is another bed of their own making. We were literally ready to talk to them because we assumed, as I think we should, that they were interested in having good faith, sincere settlement negotiations until and unless they prove us wrong," he said. "They managed to prove us wrong in that assumption with these misrepresenting purported leaks. So that doesn't work for us."
The financial stakes surrounding the stalled merger are significant. Starting October 1, Paramount's majority owner Ellison will be on the hook for a 25 cent per share ticking fee, which translates to roughly $650 million per quarter or about $7 million per day until the deal closes. If the deal collapses entirely due to regulatory issues, Paramount must pay Warner Bros. a $7 billion break-up fee.
Paramount is also asking that the states and the Writers Guild of America post a $1.9 billion bond to cover the ticking fee and other financing costs during the delay. That request will be decided at a hearing on September 24.
The state attorneys general and the WGA are currently headed toward a trial with Paramount set for March, adding further financial pressure on the media company. A spokesperson for Paramount did not immediately return TheWrap's request for comment on Bonta's latest remarks.
