Hollywood
Paramount may settle with US states over Warner Bros. deal as soon as this weekend
Proposed terms also include a commitment on theatrical releases as talks advance
CALIFORNIA: Paramount Skydance and US states seeking to block its $110 billion acquisition of Warner Bros. Discovery could reach a settlement as soon as this weekend, with independent monitoring of CNN among the terms under discussion, according to a Reuters report.
Sources familiar with the matter told Reuters that a commitment on the number of theatrical releases is also being discussed as part of a potential settlement. Neither side has confirmed that an agreement has been reached.
The talks come as Paramount seeks to clear one of the final hurdles to its proposed takeover of Warner Bros. Discovery, a deal that would bring major properties including CNN, HBO, “Harry Potter”, “The Daily Show” and NFL rights under one company.
Paramount’s shares rose nearly 7 per cent after markets closed, while Warner Bros. Discovery shares gained 8.4 per cent in after-hours trading following reports of the settlement discussions.
Independent monitoring of CNN is being discussed amid concerns over how the news network would be managed after the acquisition.
Paramount CEO David Ellison has positioned the transaction as a way to consolidate two major Hollywood studios and build a larger competitor to Netflix and Disney.
The states, led by California, sued in July to block the transaction, arguing that the combined company could gain excessive market power and raise prices for movies and television.
A spokesperson for the California Department of Justice said potential settlement discussions were confidential and declined to confirm or deny whether talks were taking place or their alleged substance. Paramount declined to comment.
Another potential condition involves the number of films the combined studios would release theatrically.
Ellison has previously said the combined film studios would release 30 movies a year. Sources told Reuters that a commitment on theatrical releases is now among the terms being discussed with the states.
The settlement discussions could also help Paramount avoid additional costs linked to delays in closing the transaction. Under the merger agreement, Paramount faces a $7 million-a-day fee to Warner Bros. shareholders after September 30 until the deal closes.
The antitrust case is not the only legal challenge facing the proposed acquisition. The Writers Guild of America has also sued to block the transaction, arguing that the merger could reduce pay and worsen working conditions for film and television writers.
California attorney general Rob Bonta has previously argued that structural remedies, including selling parts of a business, can be more effective in protecting competition than commitments by companies to change their behaviour.
The proposed Paramount-Warner Bros. combination has already received regulatory clearance from the Trump administration, while the states’ lawsuit remains a key obstacle to completing the deal. The FCC also approved Paramount’s request to allow foreign investment in the transaction, while restricting foreign investors from holding voting stock or influencing content and management decisions.
For now, the focus is on whether Paramount and the states can agree on safeguards that would allow the $110 billion transaction to move ahead without resolving the dispute through a full court battle.
