Paramount Skydance representatives are reportedly meeting on Monday with the California attorney general’s office to discuss a path to a potential settlement of the antitrust lawsuit seeking to block Paramount’s takeover of Warner Bros. Discovery, The New York Times reported Saturday.
Pressure to settle the suit has grown in recent weeks as California Gov. Gavin Newsom, Los Angeles Mayor Karen Bass, and the Directors’ Guild of America, among others, have called for a settlement. However, there are no assurances that this latest set of talks will lead to meaningful negotiations toward a settlement, the Times reported, citing people briefed on the upcoming discussions.
On Thursday, California Attorney General Rob Bonta told CNBC’s David Faber that the acquisition would require “robust structural remedies” to reach a settlement in the antitrust case.
″[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.
A group of 12 state attorneys general filed a lawsuit in July challenging the proposed $110 billion acquisition that would combine two of the most storied film studios in Paramount and Warner Bros., as well as streaming platforms Paramount+ and HBO Max. The potential deal would create the largest portfolio of TV networks in the U.S.
“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.,” Bonta said in a release at the time announcing the lawsuit.
Paramount had previously agreed to delay the acquisition to as late as June 2027 due to the legal challenge, and a trial is set for March. However, if the deal is delayed beyond Sept. 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. Should the deal fall apart entirely, Paramount would owe WBD a $7 billion breakup fee.
In June, the antitrust division of the U.S. Department of Justice cleared the proposed merger. European antitrust regulators also granted their approval for the deal in July.
However, U.S. state officials, as well as the Writers Guild of America and several prominent Hollywood actors and actresses, have argued that the merger would not only reduce competition but result in job losses in the entertainment industry.
Read the complete New York Times article here.
— CNBC’s Lillian Rizzo contributed to this report.
