Paramount Skydance, led by David Ellison, is reportedly in “advanced talks” with California Attorney General Rob Bonta to resolve an antitrust lawsuit filed by 12 states that is currently hindering its acquisition of Warner Bros. Discovery. This information was disclosed by the Wall Street Journal on Friday, citing anonymous sources.
Settlement Negotiations Underway
While a spokesperson for Paramount declined to comment on the negotiations, a representative from Bonta’s office stated that, “Potential settlement talks are confidential. We cannot confirm or deny whether settlement talks are occurring or their alleged substance.” According to the Journal, the discussions are ongoing, and there is no assurance that a resolution will be reached. Reportedly, the parties have considered compromises, such as an agreement for Paramount to operate the two companies’ movie studios separately for a certain period before any potential merger.
Structural Remedies versus Behavioral Remedies
However, Bonta has previously indicated that running the two companies separately under common ownership would be viewed as a mere “behavioral” remedy. He is advocating for a structural solution that would involve separate ownership entirely.
Upcoming Trial Scheduled
A trial date has been set for March 2027 regarding the antitrust case. In the meantime, Paramount has requested the 12 states, along with the Writers Guild of America (which has also filed a suit to block the merger), to post a $1.88 billion bond. This bond would cover potential losses from a “ticking fee” payable to WBD shareholders, which began accruing at a rate of $7 million per day starting October 1, should Paramount prevail in court. A hearing on the bond motion is slated for September 24.
Funding and Future Considerations
David Ellison’s ambitious $111 billion plan to acquire Warner Bros. Discovery is partly financed by his father, Larry Ellison, and also involves sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi. Recently, the FCC approved Paramount’s petition that allows foreign entities to hold up to 49.5% of its equity if the Warner Bros. Discovery acquisition goes through.
Potential Company Relocation
In light of the uncertainty surrounding the merger, Ellison has informed Paramount executives that he is considering relocating the company’s operations, including its studio, out of California if the acquisition is not finalized by the end of September. Options being floated include moving to Tennessee, Texas, or Georgia.
