California Attorney General Rob Bonta said any settlement of the states’ antitrust challenge to Paramount Skydance Corp.’s planned acquisition of Warner Bros. Discovery would need to include structural changes to the transaction, underscoring the gap between the two sides as pressure mounts to resolve the dispute.
Bonta, who is leading a coalition of 12 state attorneys general seeking to block the roughly $110 billion deal, said his office remains willing to consider a settlement but is looking for remedies that directly address alleged concentration in theatrical film distribution and cable television, according to CNBC.
The California attorney general’s position suggests that promises governing how the combined company would behave after closing may not be enough to end the case. Bonta has previously said the states favor structural remedies — changes such as asset divestitures — rather than behavioral commitments that require ongoing compliance.
The distinction could determine whether Paramount and Warner Bros. can find a negotiated path to completing one of the largest media transactions in history.
California and 11 other states sued in July to stop Paramount’s purchase of Warner Bros. Discovery, alleging the combination would substantially reduce competition. The states have focused their case on three areas: distribution of widely released theatrical films, blockbuster movies and basic cable programming. California’s attorney general said when announcing the lawsuit that the transaction would violate federal antitrust law and could hurt consumers, workers and businesses that negotiate with the studios.
Paramount disputes those allegations and has argued that combining the companies would create a stronger competitor in an entertainment market increasingly dominated by large streaming platforms. In earlier court filings, the company said greater scale would allow the merged business to compete more effectively against companies including Netflix, Amazon and Disney.
The legal fight has become increasingly costly. Paramount this week asked the federal judge overseeing the litigation to require the states and the Writers Guild of America, which is pursuing a separate challenge, to post as much as $1.88 billion in bonds to cover potential losses associated with delaying the transaction, according to Reuters. Paramount says the delay could trigger substantial payments to Warner Bros. Discovery shareholders under the merger agreement.
Bonta has rejected the suggestion that taxpayers should bear responsibility for those costs, arguing that Paramount knowingly accepted the timing provisions when it negotiated the acquisition. In an earlier interview, he said the company was aware that a transaction of this size would undergo an antitrust review.
Related: Paramount Wants States to Post $1.9 Billion Bond Over Warner Bros. Deal
Pressure for a negotiated solution is also coming from parts of Hollywood. Cinema United, which represents theater owners, called this week for Bonta and Paramount to seek a settlement containing enforceable protections for exhibitors and consumers. The group, which had previously opposed the combination, said potential safeguards should address film distribution, exhibition fees and theater access to the studios’ libraries, according to Reuters.
That shift gives Paramount additional industry support as it argues that the transaction could benefit theatrical exhibition rather than weaken it.
Still, Bonta has drawn a firm line around what would qualify as an acceptable antitrust remedy. He has previously dismissed the idea that spinning off CNN alone could settle the case, saying such a divestiture would not address the competitive markets identified in the states’ complaint. He said a broader package of structural concessions could be considered if Paramount offered one.
The dispute therefore centers less on whether settlement is theoretically possible than on how much of the proposed combination Paramount might be willing to reshape to secure one.
The stakes are rising as the litigation stretches toward trial. Paramount has said delaying the transaction imposes significant financial costs, while the states maintain that allowing the companies to combine before their antitrust claims are resolved could make it difficult to restore competition later.
For now, according to CNBC’s reporting, Bonta’s message leaves the door to negotiations open — but only if Paramount is prepared to discuss changes that alter the structure of the deal rather than rely primarily on promises about how the merged company would operate.
Source: CNBC
