Paramount and California AG Rob Bonta Reportedly Closing in on Settlement Over Warner Bros. Discovery Merger

Paramount and a coalition of states led by California Attorney General Rob Bonta are nearing a deal to settle a lawsuit challenging the studio’s bid to acquire Warner Bros. Discovery, The Wall Street Journal reported Friday, citing anonymous sources.

On July 13, a coalition of 12 Democratic-led state attorneys general — including California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington — sued in federal court to block Paramount’s roughly $110-111 billion acquisition of Warner Bros. Discovery.

The states argued the combined company would control nearly a third of U.S. film output and roughly a third of basic cable programming, which they said would lead to higher prices and less content for audiences. Paramount disputed the claims, arguing the merger would give the combined company the scale needed to compete with larger tech and entertainment companies.

Talks between the two sides haven’t been smooth. Bonta canceled a scheduled settlement meeting in late August, accusing Paramount of “playing games,” and had previously told CNBC that any resolution would require “robust structural remedies” — typically meaning divestitures. As of last week, Deadline reported the two sides were still in early “agenda setting” discussions rather than advanced negotiations, before the Journal’s Friday report indicated the talks had progressed further.

According to reporting, a potential deal under discussion would require Paramount to keep Warner Bros. Discovery’s operations separate for a specified period rather than immediately merging them, along with possible provisions for independent content monitoring at CNN and commitments around theatrical release windows.

Paramount has already offered behavioral concessions, including a pledge to release at least 30 films annually with 45-day theatrical windows. Securing a settlement without divestitures would represent a significant win for Paramount CEO David Ellison, given Bonta’s earlier stated preference for structural remedies.

Paramount and Warner Bros. Discovery have agreed not to complete the merger until June 1, 2027, or until a court ruling on the states’ claims, whichever comes first. But Ellison has additional financial pressure to resolve the dispute quickly: The Los Angeles Times has reported that starting October 1, Paramount will owe Warner Bros. Discovery shareholders an additional $7 million per day on top of the $81 billion already agreed upon, under a “ticking consideration” clause.

The two sides have also agreed to participate in court-ordered settlement talks scheduled for October 14 and 15. Ellison has separately warned he would consider relocating Paramount out of California if the legal fight isn’t resolved.

The merger has already cleared all foreign regulatory hurdles, including a recent FCC review of its foreign ownership structure, and the U.S. Justice Department found no competitive harm in its own review. The state lawsuit remains the last major obstacle, with a trial currently scheduled for March 2027 if no settlement is reached before then.

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