Representatives for Paramount Skydance and the California Attorney General’s office are slated to meet Monday to discuss a potential settlement in the ongoing antitrust lawsuit aimed at blocking Paramount’s proposed takeover of Warner Bros. Discovery. While key officials and industry groups are pushing for a resolution, it remains uncertain if these discussions will lead to a breakthrough, as California AG Rob Bonta insists on “robust structural remedies” for any settlement.
A critical meeting is reportedly scheduled for Monday between representatives of Paramount Skydance and the California Attorney General's office. The purpose? To discuss a potential path to settling the significant antitrust lawsuit that seeks to block Paramount's proposed takeover of Warner Bros. Discovery, as initially reported by The New York Times on Saturday.
This impending discussion comes amidst growing pressure for a resolution. Notable figures such as California Governor Gavin Newsom, Los Angeles Mayor Karen Bass, and the Directors' Guild of America have all publicly urged a settlement. However, sources familiar with the discussions cautioned The New York Times that there are no guarantees these latest talks will yield substantial negotiations towards an agreement.
California Attorney General Rob Bonta, a key figure in the legal challenge, recently stated on CNBC's "Squawk on the Street" that any settlement in the antitrust case would necessitate "robust structural remedies." Bonta expressed frustration with Paramount's prior focus, noting they "wanted to talk about everything except for what this case is about," diverting to topics like the streaming market or CNN, which are not central to the complaint. Instead, Bonta emphasized the state's focus on three specific markets where antitrust violations are alleged.
The lawsuit, filed in July by Bonta and 11 other state attorneys general, challenges the massive $110 billion acquisition. The proposed deal would unite two iconic film studios, Paramount and Warner Bros., along with their respective streaming platforms, Paramount+ and HBO Max, potentially creating the largest portfolio of TV networks in the U.S.
At the time of filing, Bonta asserted that "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."
The financial stakes are incredibly high. Paramount had previously agreed to delay the acquisition until as late as June 2027 due to the legal challenge, with a trial slated for March. Should the deal extend beyond September 30, Paramount faces a "ticking fee" to Warner Bros. Discovery shareholders, amounting to approximately $650 million in cash value each quarter. Furthermore, if the merger collapses entirely, Paramount would be liable for a hefty $7 billion breakup fee to WBD.
Interestingly, the U.S. Department of Justice's antitrust division had cleared the proposed merger in June, and European antitrust regulators also granted their approval in July. However, U.S. state officials, alongside influential groups like the Writers Guild of America and numerous Hollywood actors and actresses, continue to argue that the merger would not only stifle competition but also result in significant job losses across the entertainment sector.
A video from CNBC's "Squawk on the Street" features California Attorney General Rob Bonta discussing the lawsuit, titled: "California Attorney General Rob Bonta: Paramount-WBD lawsuit is a 'black-and-white' antitrust case."
— CNBC's Lillian Rizzo contributed to this report.
