Paramount-Warner Bros. Merger Nears Settlement as California Exit Threat Looms

Paramount and the coalition of states seeking to block its $110 billion acquisition of Warner Bros. Discovery could reach a settlement as soon as this weekend, according to a new report.The lawsuit, brought by California and 11 other states in July, represents one of the last major obstacles standing between Paramount and its ambition to become a formidable rival to Netflix and Walt Disney. A settlement could also spare Paramount from paying millions in fees to Warner Bros. shareholders, since the company is currently on the hook for a $7 million-a-day “ticking fee” for every day past September 30 that the deal remains unclosed.Independent content monitoring of CNN and a commitment on the number of theatrical releases are reportedly among the terms under discussion, sources told Reuters. News of a possible resolution sent shares climbing after markets closed Friday, with Paramount up nearly 7 percent and Warner Bros. Discovery gaining 8.4 percent.A spokesman for the California Department of Justice declined to confirm the negotiations, saying, “We cannot confirm or deny whether settlement talks are occurring or their alleged substance.” Even as settlement talks progress, Paramount has reportedly signaled it may abandon California entirely if the state doesn’t drop its opposition to the merger. According to sources who spoke to Deadline, Paramount leadership has told key officials — including Los Angeles Mayor Karen Bass and California Attorney General Rob Bonta — that the company is “deadly serious” about relocating out of Hollywood after more than a century in the region. Georgia, Tennessee, and Texas have reportedly been floated as potential destinations.A spokesman for Mayor Bass’s office told Deadline, “Mayor Bass is focused on protecting and fighting for jobs in L.A., including critical jobs in the entertainment industry that have been a vital part of Los Angeles’ economy. She’s been engaged on this issue and will continue to fight to make sure L.A. is home to Hollywood.”Mr. Bonta’s office pushed back on the relocation threat, telling Deadline, “It’s no secret that Paramount has been making this threat, despite its alleged commitment to California and Hollywood. What Paramount decides to do is Paramount’s choice alone. We’ll continue to apply the law without fear or favor and continue to be open to coming to the table for good faith discussions.”A report delivered to L.A. County warned that a full relocation could cost the state between 28,990 and 57,980 permanent jobs and between $10.6 billion and $21.2 billion annually in economic output, according to the county-affiliated Economic Development Corporation.Despite the friction, Paramount CEO David Ellison has maintained that the merger — which would unite CNN, HBO, “Harry Potter,” “The Daily Show,” and NFL broadcasting rights — would preserve theatrical output, with the combined studios releasing at least 30 films annually.A trial date is set for March 2, though court-ordered settlement meetings are scheduled for next month, potentially resolving the dispute long before then.

Paramount-Warner Bros. Merger Nears Settlement as California Exit Threat Looms

Paramount-Warner Bros. Merger Nears Settlement as California Exit Threat Looms

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