According to Deadline, the Monday meeting between the state attorneys general and the lawyers for Paramount Skydance is reportedly more PR than actual litigation. The meeting is in response to settlement calls from political and financial stakeholders.
“Ellison and Makan Delrahim think they can force Rob Bonta into backing off with threats and intimidation. That’s not going to work. He’s more determined that ever to take them to court; the rest is all for show, to take the pressure off,” says one industry insider per Deadline. Paramount has made threats to leave California after the start date for the trial was set for March. Starting October 1st, Paramount will owe a ticking fee to shareholders of 7 million dollars a day. The WGA has pointed to this response as the reason for blocking the merger.
The Wall Street Journal reported that the state AGs are gearing up to ask Paramount to sell off several WBD cable channels. The state is also likely to request the movie studios remain separate. Believed to be a non-starter for New York and California AGs, Letitia James and Rob Bonta are reportedly going to ask Ellison to forfeit day-to-day oversight.
“David’s not going to go along with any of that, and Bonta knows it,” one studio executive said. He went on to describe Bonta’s requests as “performative” before stating that “Ellison needs those cable channels, that’s still where the money is,” via Deadline.
Although many, including Ellison, have said his stewardship of CNN is a sticking point, the AGs are not set to ask him to divest CNN in particular. HBO and HBO Max will not be discussed during the meeting.
According to Deadline, perspectives from both sides of the business and political spectrum, including co-plaintiff The WGA, agree that expectations are “intentionally low”. One source said, “No one trusts anyone on the other side; it’s obvious. “The states’ think Paramount’s going to say whatever they need to say to close the merger and avoid paying fees. Paramount think this is all partisan politics. Both sides are wrong and right, not willing to give anything big up. That’s not going to work if you want a deal.”
To gain approval from international organizations, Paramount did make concessions, but they are believed to pale in comparison to the AG’s requests. The meeting represents an unstated requirement for federal trials of this scale, intended to avoid drawn-out legal battles if possible.
In addition to a possible departure to a Republican-held state, Paramount also requested a $1.88 billion bond to cover the ticking fees expense while the lawsuit is sorted. California governor Gavin Newsom chimed in, attempting to balance political affiliation with concerns of a departing major studio in an already declining California film industry. ”There’s some universal settlement there, if that’s possible,” Newsom said per Deadline.
Neither Paramount nor the state AGs responded to reports that the meeting was essentially a mirage. Even if there is no actual legal progress to be made, there is still hope that the parties may be able to begin a friendlier discussion.
Sentiment toward Paramount’s chief legal officer and former Trump assistant attorney general Delrahim may be becoming increasingly negative. A source told Deadline, “It’s not just he says one thing in public, another in private. He seems to want to provoke a conflict for conflict’s sake.”
Federal Judge Araceli Martinez-Olguin set August 26th to select a mediation judge. A scheduled amendment is also set to be submitted the same day.
