Paramount to meet California attorney general over WBD merger antitrust suit
Paramount Skydance representatives will meet California antitrust regulators on Monday to negotiate a settlement for the $110 billion Warner Bros. Discovery acquisition, potentially averting hundreds of millions in delayed closing penalties.
Representatives for Paramount Skydance are scheduled to meet with the California attorney general’s office on Monday to explore a settlement in the antitrust lawsuit blocking the company's takeover of Warner Bros. Discovery. The discussions aim to resolve legal hurdles that threaten the $110 billion transaction, which would unite two of Hollywood's most prominent film studios. The resulting entity would also combine the Paramount+ and HBO Max streaming platforms to create the largest portfolio of television networks in the United States.
Resolving the state-level litigation is critical for managing Paramount's financial exposure. If the transaction is not completed by September 30, the company must pay Warner Bros. Discovery shareholders a ticking fee estimated at $650 million per quarter. Furthermore, a total collapse of the deal would trigger a massive $7 billion breakup fee.
The U.S. Department of Justice cleared the proposed merger in June, and European antitrust regulators followed with their own approval in July. However, a coalition of 12 state attorneys general filed suit in July to block the consolidation. California Attorney General Rob Bonta stated on Thursday that any resolution requires robust structural remedies focused strictly on the specific markets outlined in the complaint.
Bonta expressed frustration that Paramount attempted to divert discussions toward the streaming market, CNN, and foreign regulators rather than addressing the core antitrust allegations. "They want to talk about everything except for what this case is about," Bonta said in a television interview. He emphasized that the state will only focus on the three specific markets set forth in the legal filing.
The push for a negotiated settlement has intensified amid mounting pressure from California Governor Gavin Newsom and Los Angeles Mayor Karen Bass. Major entertainment organizations, including the Writers Guild of America and the Directors Guild of America, have also called for a resolution. These groups, alongside several prominent Hollywood actors, argue the consolidation would reduce competition and eliminate industry jobs.
State regulators maintain that the combined entity would dominate the U.S. television landscape to the detriment of consumers and distributors. "The unlawful merger of these two entertainment behemoths would lead to higher prices, lower quality, and less content for film and television," Bonta said when announcing the lawsuit. He warned the move would ultimately harm movie theaters, basic cable distributors, and audiences.
Despite the upcoming talks, sources briefed on the discussions indicate there are no guarantees that Monday's meeting will produce meaningful negotiations. The antitrust trial remains scheduled for March, though Paramount had previously agreed to delay the acquisition closing until as late as June 2027 to accommodate the ongoing legal challenge.
