At the center of the talks is California Attorney General Rob Bonta, whose office has demanded what it has described as “structural remedies” to address concerns that the combination of the two major Hollywood companies could reduce competition across the entertainment industry.
The negotiations have intensified as Paramount faces growing financial pressure to complete the transaction. Under the terms of its agreement with Warner Bros. Discovery, Paramount would be required to pay WBD shareholders an additional $7 million a day beginning Oct. 1 if the acquisition remains unfinished.
People familiar with the discussions said negotiations involving Bonta appeared to be moving in a positive direction, although no agreement had been finalized. The two sides were expected to remain in communication Sunday, with talks potentially continuing until the evening before pausing for the Yom Kippur holiday if a settlement had not been reached.
The federal antitrust lawsuit filed in July by 12 states, including California and New York, represents the principal remaining legal obstacle to Paramount’s effort to close the transaction, which was agreed upon in late February.
Questions over proposed remedies
One of the most contentious issues is whether Paramount will agree to sufficiently strong safeguards to address the states’ concerns.
Reports have suggested that the settlement under discussion could involve commitments to keep the two studios operating separately for a specified period rather than immediately integrating their operations. The Wall Street Journal, citing people familiar with the matter, reported Friday that such an arrangement could form part of a potential settlement.
The possibility has prompted criticism from merger opponents, particularly because Paramount Skydance CEO David Ellison has previously made a similar commitment.
In a Feb. 28 letter to California Sen. Adam Schiff and Rep. Laura Friedman, Ellison wrote: “my promise to you is to build a stronger Hollywood, by keeping both of these legacy studios operating separately, thereby preserving and potentially increasing jobs.”
Bonta, however, has previously argued that simply maintaining separate operations under common ownership would not provide the kind of structural protection he believes is necessary.
In an interview with Variety last month, Bonta characterized separate operations as a “behavioral” remedy and said such arrangements could be difficult for authorities to enforce over the long term.
“There needs to be separate ownership,” he said. “If it’s under the same Paramount-Warner Bros. merged-entity roof, that’s not separate.”
People familiar with the negotiations said enforceable commitments requiring some or all Warner Bros. Discovery businesses to operate as separate entities from Paramount could nevertheless provide a possible route to a settlement. The discussions could also include commitments aimed at preserving jobs for a specified period.
Production, California jobs also on table
The negotiations have reportedly extended beyond corporate structure.
According to two people familiar with the talks, the sides have discussed production commitments, including Ellison’s longstanding pledge to make at least 30 films annually.
Other issues reportedly under discussion include a written commitment to maintain operations in California and the appointment of a third-party “editorial adviser” for CNN and CBS.
The proposed measures reflect the breadth of the concerns surrounding the transaction. Paramount and Warner Bros. Discovery collectively control major film and television operations, streaming platforms and news organizations, making the proposed combination one of the most consequential pieces of media consolidation in recent years.
People familiar with the situation also pointed to signs that senior Warner Bros. Discovery executives were beginning to prepare for the possibility of a completed transaction.
HBO CEO Casey Bloys and JB Perrette, president of WBD streaming and gaming and the business leader of HBO Max, have experience with major corporate transactions dating back to their years at Time Warner and Discovery Communications.
Their increased visibility around the Emmy Awards this past week was noted by people following the merger closely.
“Casey looks happier than he has in a long time,” one knowledgeable source said.
Paramount Skydance declined to comment Saturday on the settlement discussions.
Activists prepare demonstrations
While negotiators work toward a possible agreement, opposition to the merger is growing more visible.
The Block the Merger coalition said Saturday that the rumored settlement terms did not adequately address its concerns and criticized the possibility of an agreement that would allow Paramount and Warner Bros. Discovery to proceed with the transaction.
The coalition described the reported terms as “an insult to everyone who has stood up against this harmful transaction.”
Actor Mark Ruffalo, one of the most prominent Hollywood figures opposing the merger, has also urged supporters to pressure Bonta to maintain his opposition to what he considers inadequate safeguards.
Ruffalo, who stars in the HBO drama series “Task,” which was recently renewed for a second season, has continued to campaign against the transaction despite his connection to one of Warner Bros. Discovery’s flagship networks.
The four-time Oscar nominee, who received an Emmy nomination this year for “Task,” wrote on X: “Don’t you dare @AGRobBonta, do not cave. You work for the people — the very people who will be hurt if you let this lousy deal filled with empty promises go forward.”
Ruffalo called on supporters to gather outside Bonta’s Oakland office at 5 p.m. Sunday to protest the proposed merger. Additional demonstrations were scheduled for Monday outside New York Attorney General Letitia James’ office and Tuesday outside the Writers Guild of America West headquarters in Los Angeles.
Writers Guild maintains separate legal challenge
The Writers Guild of America has pursued its own legal challenge to the proposed acquisition, arguing that the merger would unlawfully reduce the market available for writers’ work.
Although the WGA is a party to the agreement that prevents the merger from proceeding before a federal trial scheduled for March 2027, the guild has not participated in the settlement negotiations between Paramount and the state attorneys general.
The legal dispute is scheduled to return to court Thursday before Judge Araceli Martinez-Olguin.
Paramount is seeking a $1.88 billion bond from the WGA and the states as the price of continuing to hold the merger at bay while the litigation proceeds.
For Paramount, the coming days therefore carry significant financial and legal consequences. A settlement could clear the way for the company to move toward closing the acquisition, while a failure to reach an agreement would leave the antitrust litigation as the central barrier to the transaction.
For Bonta and the other states, meanwhile, the negotiations present a different question: whether the proposed commitments would provide meaningful, enforceable protections against the competitive concerns that prompted the lawsuit in the first place.
With activists preparing demonstrations and the parties still negotiating, the outcome of the weekend talks could determine whether the $110 billion deal moves closer to completion or remains locked in a prolonged legal battle.