The prospect of a settlement between the state AGs and Paramount has sharply declined. According to Deadline, four state AGs appear resistant to talks as mediation continues. Talks took place over the weekend, and court-mandated meetings are set for October.
California Attorney General Rob Bonta appeared inclined to a settlement. Still, Minnesota AG Keith Ellison, New York’s Leticia James, Connecticut’s William Tong, and, though slightly unclear, Washington’s Nick Brown are not. Along with the Writers Guild Of America, Nevada, New Jersey, New Mexico, Colorado, Arizona, Oregon, and Massachusetts are the other states counted among the plaintiffs. Ellison, not to be confused with Paramount Skydance CEO David Ellison, appears to have taken the lead in the anti-settlement camp.
Bonta may be facing pressure to settle after Paramount threatened to leave California if there is no agreement by October 1st. Several prominent California politicians, including LA Mayor Karen Bass and Governor Gavin Newsom, have called for a settlement. Starting October 1st, Paramount will owe a $ 7 million-a-day ticking fee to shareholders.
The group of four opposed to settlement reportedly believes that it is too lenient on Paramount. Specifically, a CNN editorial board that a source says “has no teeth,” per Deadline. The group of four worries that any deal will be “window decorating,” as both sides feel mounting pressure to settle. They are also discussing a stipulation that includes financial penalties if the new company does not keep its theatrical release promises. Talks remain at a standstill as the groups break for Yom Kippur. The respite could prove to be crucial as both parties pause from mediation.
The WGA is currently a bystander, but protests by the Block Meger Group across the US are putting pressure on it. The WGA has been in contact with New York AG James to get a temperature check on settlement talks.
What began as a fairly heated atmosphere appears to have cooled, with talks being described as “civil”. On September 24th, U.S. District Judge Araceli Martínez-Olguín will hear arguments on Paramount Skydance’s request for a nearly $2 billion bond to cover the expenses of the ticking fee. The following day, the state AGs will respond to the countersuit from Iowa and Montana on whether to escalate the case to the Supreme Court.
While neither David Ellison nor WBD CEO David Zaslav attended, the potential merger appeared to be a heavily discussed topic among Hollywood elite at the opening of the Lucas Museum of Narrative Arts. Some attendees described the deal as “unstuck”. Even Bass appears optimistic about a settlement, with a source saying it was “close.” Bass, once opposed to the merger, has made it clear that he is thoroughly on the side of a settlement.
A hold-separate agreement could allow the lawsuit to move forward while also avoiding the ticking fee. While it avoids potential losses for Paramount, its effect on both companies’ stock prices is unclear. The market has indicated that it does not like the uncertainty the lawsuit has created.
AT&T and Time Warner Cable came to a hold-separate agreement during their 2018 merger. It was also considered in the current lawsuit over Nexstar’s acquisition of Tenga.
News has continued to be mixed for Bonta and company. While it initially seemed to hold strong, deriding Paramount’s threats to leave California, there seems to be plenty of wiggle room now. Even the labor unions are split, as the WGA is the plaintiff, but IATSE joined Bass, Newsom, and the probable next Governor of California in calling for a settlement. The L.A. Board of Supervisors recently commissioned a report, but a Paramount-commissioned report indicated that losses would be substantially worse if the company left California. Either way, it’s bad news for LA.
Neither Ellison (the AG, not CEO), James, nor Bonta have responded on the current state of deliberations. Ellison was initially extremely vocal about blocking the merger. Several Democratic members of Congress have spoken out in support of the AGs holding the line, including Senator Chris Murphy and outspoken opponent Cory Booker.
“With Trump and his billionaire allies crushing independent media, we need state AGs to stand strong against more corporate media monopolies. “The AGs should keep fighting to block Paramount’s illegal merger with Warner Bros. Discovery,” Murphy said per Deadline.
According to Deadline, Booker echoed his sentiments shortly after: “Trump just locked CNN out of the White House. Now his billionaire allies want to own it. State attorneys general: Don’t settle. Hold the line. Block this merger.”