Paramount, Bonta Meet Monday as $7M Daily Fee Pressures Deal

Paramount and California's attorney general will meet Monday to explore settling the antitrust suit blocking the $110 billion Warner Bros. Discovery deal.

Paramount representatives will meet California Attorney General Rob Bonta's office Monday to discuss a potential settlement of the antitrust lawsuit blocking the $110 billion Warner Bros. Discovery acquisition, a person familiar with the matter said.

"Coming to the table has always been on the table," Bonta told CNBC last week. "We do prefer to resolve cases in the boardroom instead of the courtroom, but for now we're bringing our case."

The talks come as Bonta and 11 other state attorneys general plus the Writers' Guild of America prepare for a March trial. David Ellison, Paramount Skydance's CEO, faces a 25-cent-per-share ticking fee starting Oct. 1 — $650 million per quarter, or $7 million per day — until the deal closes. Bonta has insisted any settlement include structural remedies such as divestments, arguing behavioral pledges like Ellison's commitment to 30 theatrical releases per year are difficult to enforce.

A settlement would clear the largest media merger in history, removing regulatory overhang for both Paramount and Warner Bros. Discovery. Failure to reach a deal sends the case to trial March 2, 2027, before U.S. District Judge Araceli Martinez-Olguin, with closing delayed until five days after the verdict or June 1, 2027 — whichever comes first.

The meeting, which includes senior executives and lawyers from each side, has been in the works for about a week, according to the New York Times, which first reported the talks. Paramount requested the session. It's unclear whether the discussions will produce a resolution.

Calls for Bonta to settle have intensified over recent weeks. Newsom, Bass, the Democratic nominee for governor Xavier Becerra, the Directors' Guild of America, IATSE and trade group Cinema United — which previously opposed the merger — have all backed a settlement. Cinemark, the CEOs of AMC Theaters and Regal, Lionsgate CEO Jon Feltheimer and WME Group executive chairman Ari Emanuel have backed the deal.

Ticking Fee Deadline Looms

Ellison has threatened to move Paramount's operations out of California if Bonta doesn't come to the negotiating table by the Oct. 1 ticking fee deadline. Bonta called the threat "blackmail" but said he remains open to talks. During a court hearing this week, Judge Martinez-Olguin asked both parties to identify two potential magistrates who could oversee mediation by next Wednesday.

Bonta told CNBC that Paramount had steered early discussions toward subjects outside the complaint — the streaming market, CNN and foreign regulators — rather than the three markets where the states allege antitrust harm. "We want to talk about the three markets that we set forth in our complaint, where we think there's antitrust violation," he said.

The states argue a merged entity would control roughly a third of wide-release film distribution and a comparable share of basic cable TV programming. Bonta rejected Paramount's contention that declining pay TV subscriber numbers weaken the case, calling a merged company's position in the relevant markets "presumptively illegal market concentration."

Jobs Report Sharpens the Stakes

A Los Angeles County study released this week estimated the merger could put about 4,500 film and television jobs in the Greater Los Angeles area at risk over three years, threatening $1.26 billion in wages, $2.78 billion in economic value and $547 million in tax revenue. The report, prepared by CVL Economics, projected 10,360 job-years could be at risk including indirect employment at prop houses, printers and transportation vendors.

The WGA criticized Bass for backing a settlement, saying the mayor had "chosen to join Paramount's pressure campaign on public enforcers." Over 5,000 actors, including Jane Fonda and Mark Ruffalo, signed a letter opposing the merger. SAG-AFTRA and the Hollywood Teamsters have also spoken out against the deal.

The U.S. Department of Justice closed its review and approved the merger June 12. Paramount has asked the court to require the plaintiff states to post a $1.88 billion bond, arguing litigation-driven delays impose costs the company couldn't recover even with a trial victory. Bonta's office rejected that argument, saying Paramount agreed to the existing timeline.

If settlement talks fail, the case proceeds to trial in March. Paramount has said it would contest the case aggressively, with lead trial counsel Jeffrey Kessler indicating the company would pursue the dispute to the Supreme Court rather than accept a deal-blocking outcome.

This article is for informational purposes only and does not constitute investment advice.