California cancels talks with Paramount over Warner Bros deal

California Attorney General Rob Bonta canceled a meeting with Paramount Skydance representatives on Monday to begin settlement talks over the state's lawsuit aimed at blocking Paramount's $110 billion acquisition of Warner Bros. Discovery. The company is seeking a settlement in the case, which is the final obstacle to the deal alongside a parallel lawsuit by the Writer’s Guild of America. The merger faces significant costs and fees if the lawsuit proceeds to trial in March.

Bonta and his associate have secured crucial rulings, granting them influence should settlement discussions continue. Bonta accused Paramount of leaking details of a meeting held on Friday and acting in bad faith, a claim the company has denied. "Paramount leaked the alleged substance of settlement discussions, and misrepresented these discussions, demonstrating a lack of good faith," Bonta stated, adding that his office met with Paramount on Friday. Bonta expressed readiness to meet again once Paramount engages sincerely.

Paramount spokesperson acknowledged Bonta's concerns about public discussions and misreporting surrounding the deal. The company affirmed that it has not been the source of leaks and remains hopeful about continuing good faith discussions to resolve the Attorney General's suit and advance plans for increased competition and output for the benefit of talent and entertainment workers.

Bonta has shown openness to settling cases, but has also advocated for structural remedies, such as selling off part of a business, over mere promises of future actions. Paramount Skydance CEO David Ellison pledged to release 30 movies annually and keep them exclusively in theaters for 45 days. California and 11 other states filed a lawsuit on July 13, contending that the deal would create a media conglomerate with the ability to raise film and television prices.

Sources familiar with the matter told The Wall Street Journal that Bonta planned to request Paramount to divest certain cable channels and pledge to keep its movie studio separate from Warner Bros. before approving the merger.