California’s Attorney General Just Pulled the Plug on Paramount Settlement Talks

Paramount’s fight to close its blockbuster acquisition of Warner Bros. Discovery has dragged on for months, tangled up in courtrooms, regulatory reviews, and a growing list of state officials determined to slow the deal down. Even as the $111 billion merger has cleared several hurdles, California has remained one of its most persistent obstacles.

That tension has played out largely through California Attorney General Rob Bonta, who is leading a coalition of twelve states suing to block the acquisition on antitrust grounds. The states argue the combined company would control roughly a third of both wide theatrical releases and basic cable programming, giving it outsized influence over what gets made and who gets to make it.

After weeks of speculation about whether the two sides might resolve the case outside of court, those hopes hit a wall over the weekend. Bonta canceled a planned Monday meeting with Paramount that was meant to begin preliminary settlement discussions, accusing the company of acting in bad faith just hours before the sit-down was set to happen.

According to a statement from Bonta’s office, the cancellation came after Paramount allegedly leaked details of an earlier meeting held the previous Friday and mischaracterized what was actually discussed. “Not only did Paramount leak the alleged substance of settlement discussions, but they misrepresented these discussions, demonstrating a lack of good faith,” Bonta said in the statement.

Bonta made clear the door isn’t permanently closed, adding, “As soon as Paramount stops playing games and engages sincerely, my office is happy to meet again.” Paramount and Bonta’s office did not immediately respond to outside requests for comment following the cancellation.

This isn’t the first flashpoint between Bonta and Paramount CEO David Ellison as the case has progressed. Bonta previously accused the company of attempting to “blackmail” the state after Ellison reportedly threatened to begin relocating Paramount out of California starting October 1 if settlement talks didn’t move forward, a date tied to steep financial penalties baked into the merger agreement itself.

Those penalties carry real weight. Paramount is obligated to pay Warner Bros. Discovery shareholders $7 million per day starting October 1 for every day the deal remains unclosed, fees that could exceed $1 billion by the time a scheduled March trial concludes. Should the merger ultimately collapse due to the antitrust case, Paramount would also owe a separate $7 billion termination fee.

Paramount has previously agreed to hold off on closing the deal until either a court ruling or June 2027, whichever comes first, while also unsuccessfully pushing for an earlier November trial date. The company has floated various concessions throughout the process, including a pledge to produce thirty films a year, though Bonta has dismissed some of those offers as insufficient without more substantial structural changes to the deal itself.

With settlement talks now off the table for the moment and a trial still scheduled for March, the standoff between California’s top prosecutor and one of Hollywood’s most powerful new media companies shows no signs of easing. Whether both sides eventually find their way back to the negotiating table may depend entirely on which one blinks first.

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