Paramount is preparing to meet California officials on Monday as the company seeks to open settlement talks over the antitrust lawsuit threatening its proposed acquisition of Warner Bros. Discovery, according to The New York Times.
California Attorney General Rob Bonta is leading a group of 12 Democratic-led states that sued in July to block the merger. The states argue that combining the two companies would create excessive concentration in theatrical film distribution and cable television.
Pressure has mounted on Bonta to enter settlement discussions. California Governor Gavin Newsom and Los Angeles Mayor Karen Bass are among those who have recently weighed in. Newsom said on Friday that he was aware of several meetings and ongoing conversations about a possible resolution.
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Bonta said he preferred resolving disputes outside court but warned that discussions would be unproductive without “robust structural remedies” addressing California's concerns. He has argued that the proposed merger could result in higher costs, weaker competition, lower wages, job cuts and fewer films and television shows.
Paramount, meanwhile, is seeking to complete a transaction that would bring together two major Hollywood studios and combine assets including Paramount+ and HBO Max, along with dozens of television networks.
The deal would also give Paramount CEO David Ellison control of major franchises including DC superheroes and Harry Potter, while adding CNN, Cartoon Network and Food Network to its portfolio.
Paramount has argued that the transaction is pro-competitive and would help it compete more effectively with streaming rivals including Netflix, Amazon's Prime Video and Disney.
The dispute has also drawn opposition from the Writers Guild of America, which has raised concerns about potential job losses.
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Meanwhile, the antitrust trial is scheduled to begin on March 2 and is expected to last 12 court days.
Paramount's agreement with Warner includes quarterly “ticking fee” payments of about $650 million to Warner shareholders from October until the deal closes. If the transaction is delayed, those payments could add significant pressure on Paramount to reach a resolution before the litigation proceeds further.
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