Paramount, California AG Near Settlement on Warner Bros. Merger Suit

Paramount and California Attorney General Rob Bonta are in advanced talks to settle the state antitrust lawsuit blocking the $110 billion merger with Warner Bros. Discovery, according to the Wall Street Journal. The discussions mark a significant shift from August, when Bonta demanded structural remedies such as divesting cable channels and Paramount offered to sell CNN.

Current proposals focus on behavioral remedies, including independent content monitoring for CNN and a commitment to release 30 films annually in theaters. The sides also discussed operating the two movie studios separately for a transitional period rather than merging them immediately.

“Structural remedies, meaning divestitures, protect competition better than promises to behave.”

A mandatory two-day settlement conference is scheduled for October 14 and 15, ordered by a judge overseeing the case. The trial is set for March 2027, but Paramount faces escalating costs if the deal extends past September 30.

The merger agreement imposes a "ticking fee" of $7 million per day payable to Warner Bros. shareholders after September 30, amounting to roughly $650 million per quarter. This financial pressure is a key driver behind Paramount's softened negotiating stance.

Twelve state attorneys general joined the lawsuit filed in July after the Justice Department cleared the transaction in June. Los Angeles Mayor Karen Bass, Governor Gavin Newsom, and several industry guilds have publicly urged a settlement, while major theater chains and Lionsgate CEO Jon Feltheimer support the merger.