Paramount and California attorney general Rob Bonta are reportedly in talks to settle the antitrust suit and find a path forward in David Ellison’s proposed $111bn merger with Warner Bros Discovery (WBD).
News circulated on Friday afternoon following a report in The Wall Street Journal citing anonymous sources who said talks were at an advanced stage, although they could not guarantee the outcome of the meeting.
Subsequent reports on Friday indicated a settlement could come as early as this weekend, however they may also be paving the way for a court-mandated settlement conference in San Francisco on October 14-15. The trial is scheduled for March 2, 2027.
Paramount did not comment on the development. Bonta’s office neither confirmed nor denied that talks were underway and said the matter was confidential.
One possible compromise reportedly under discussion was that Paramount CEO Ellison would agree not to combine the two studios and initially operate them as separate entities.
However that appears to contradict previous comments by Bonta, who is the lead in the antitrust case being brought by 12 US state attorneys general (Writers Guild Of America is also suing). Bonta has said he is looking for a structural remedy decreed by a court, which usually addresses corporate architecture and could cover something like a divestiture of cable channels.
Running two companies as if separate entities while under the same ownership would be a behavioural remedy. Another would be Ellison’s pledge that, were the merger to close, Paramount and Warner Bros would release a total of 30 features a year and adhere to 45-day theatrical exclusivity. Bonta does not favour behavioural remedies because they are hard to monitor and enforce.
Paramount would welcome any development that enables the merger to close before September 30 and save money. Starting on October 1 a ticking fee, agreed upon by Ellison and WBD CEO David Zaslav, kicks in that means Paramount must pay WBD shareholders what would amount to approximately $7m a day or $650m a quarter until the deal closes.
Last month Bonta cancelled a planned meeting with Paramount to discuss a possible settlement.
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