Paramount, State AGs Set October Settlement Talks in Antitrust Fight

U.S. Magistrate Judge Thomas S. Hixson directed the parties to arrange an in-person settlement conference over two consecutive days and submit their proposed dates by Sept. 15, according to Deadline. The sessions are expected to begin at 10 a.m. Pacific time.

The negotiations would bring Paramount and the states back to the table after an earlier attempt at talks collapsed amid public accusations over the handling of confidential discussions. California Attorney General Rob Bonta, who is leading the multistate challenge, previously canceled a planned meeting after accusing Paramount of disclosing and mischaracterizing details of settlement conversations, according to Deadline and other reports. Paramount denied being the source of leaks concerning confidential discussions.

The court-ordered conference shouldn’t be interpreted as evidence that an agreement is imminent. Bonta’s office told Deadline that requiring the parties to participate in a settlement conference is a normal step in litigation of this scale and doesn’t mean a settlement is already underway.

The Writers Guild of America West, which has brought a separate challenge to the transaction, is also expected to participate in the settlement process. The litigation is aimed at stopping Paramount’s roughly $110 billion acquisition of Warner Bros. Discovery, a transaction that would combine two of Hollywood’s largest film and television businesses.

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California and 11 other states filed their antitrust case in July, arguing that the combination would weaken competition in theatrical film distribution and cable television and reduce competition for entertainment-industry labor, including writers. Paramount has rejected those arguments and says the transaction would strengthen competition and increase content production.

Related: Paramount Seeks $1.88 Billion Bond as Warner Bros. Discovery Deal Faces Delay

The legal battle is increasingly expensive for Paramount. Beginning Oct. 1, the company is required to make payments to Warner Bros. Discovery shareholders if the transaction remains unfinished. Those payments amount to about $7 million a day, according to reporting cited by Deadline and Bloomberg. Paramount has pointed to those costs as part of its argument that delays caused by the litigation could produce substantial financial losses.

Paramount has separately asked the court to require the states to post a roughly $1.88 billion bond that could compensate the company for costs associated with delaying the transaction should Paramount ultimately prevail. A hearing on that request is scheduled for Sept. 24.

The dispute has also spilled beyond the courtroom. Paramount Chief Executive Officer David Ellison has threatened to begin shifting company operations out of California if the conflict isn’t resolved, adding economic and political pressure to the negotiations. The company has considered states including Tennessee, Texas and Georgia as possible alternatives, according to earlier reports.

Despite the new settlement conference, the litigation timetable remains in place. Deadline reported that the antitrust trial is scheduled to begin March 2, 2027. The October meetings therefore offer the parties an opportunity to resolve at least part of the dispute before the costly court fight reaches trial.

Paramount has said it remains willing to work with the plaintiffs toward a prompt resolution that would allow it to complete the acquisition, while Bonta’s office has emphasized that participation in the court-ordered talks by itself shouldn’t be taken as a sign that the states are prepared to abandon their antitrust concerns.

Source: Deadline