Bonta demands structural remedies as condition for productive talks
Paramount is preparing to meet Monday with California officials to begin talks aimed at resolving the antitrust lawsuit blocking its $81 billion deal to acquire Warner Bros. Discovery, according to people familiar with the matter. The meeting follows a lawsuit filed in July by a dozen Democratic-led states seeking to block the transaction.
California Attorney General Rob Bonta filed that suit on antitrust grounds, arguing that the combination of Paramount and Warner would create too much concentration in the markets for theatrical films and cable television channels. Bonta said in a Friday statement that he prefers to “resolve disputes in the boardroom, not the courtroom” and that “any potential discussions about the Paramount-Warner Brothers merger will be unproductive absent robust structural remedies on the table that address our concerns.”
“As it stands today, the proposed Warner Bros./Paramount merger will mean higher costs, less competition, lower wages, job cuts, and fewer movies and TV shows,” Bonta said. A Paramount spokeswoman declined to comment, and Bonta’s office did not respond to a request for comment on the meeting beyond his Friday statement.
Paramount has warned it is prepared to move the company out of California if it cannot reach a deal, with a potential move starting as soon as Oct. 1. Tennessee is seen as a likely potential landing spot for Paramount.
Pressure on Bonta to engage in settlement talks has been building. California Gov. Gavin Newsom said at a Friday press conference he was aware of “many meetings going on and there are a lot of conversations about what that could look like.” Los Angeles Mayor Karen Bass and others have also weighed in recently.
The Directors Guild of America, the International Alliance of Theatrical Stage Employees, and major theater chains have urged the company and the states to resolve the dispute. The Writers Guild of America also sued over the merger, saying the deal would eliminate jobs and career opportunities for Hollywood screenwriters.
Earlier this month, U.S. District Judge Araceli Martínez-Olguín scheduled the antitrust trial for March 2, lasting 12 court days, much later than Paramount executives had sought. Paramount asked a federal judge to require the states and the Writers Guild to put up a nearly $1.9 billion bond for challenging the acquisition, money that would go to the company if it ultimately wins the case.
The United Kingdom’s government approved the deal in recent weeks, following the European Union, the U.S. Justice Department and regulatory bodies in dozens of other countries.
Paramount has argued its proposed deal is pro-competition and will benefit consumers, saying the company needs to increase its size to better compete against Netflix, Amazon’s Prime Video and Disney. The combination would give Paramount Chief Executive David Ellison control of franchises including DC superheroes and Harry Potter, and add CNN, Cartoon Network and Food Network to a portfolio that already includes MTV, Comedy Central and the CBS broadcast network.
Ellison has publicly argued that the states’ true objection to the deal is not about antitrust issues but about politics and the future of CNN. Ellison’s father, billionaire Oracle co-founder Larry Ellison, is friendly with the Trump administration.
Paramount’s agreement with Warner included a “ticking fee” with payments to Warner shareholders of roughly $650 million a quarter, beginning this October, until the transaction closes. If the trial proceeds as scheduled, Paramount could owe more than $1 billion in ticking fees before a verdict.