Paramount in talks to settle antitrust lawsuit blocking WBD deal
Agreement to end action by a dozen Democratic states would clear path for $111bn tie-up
Paramount Skydance is closing in on a settlement deal with California officials to resolve an antitrust lawsuit over its $111bn combination with Warner Bros Discovery, clearing the path to the acquisition’s closure.
Settlement talks between Paramount and a group of a dozen Democratic states led by California attorney-general Rob Bonta are progressing rapidly, according to people familiar with the matter. The talks could lead to a settlement in the coming weeks although it is still possible that they collapse, the people added.
The tie-up between Paramount and WBD has in effect been on pause since July after the lawsuit from the coalition of 12 attorneys-general, alongside the Writers Guild of America trade union, forced Paramount to suspend closing the deal until a judge rules on the case. A trial date is set for March next year.
Since then, Paramount executives have publicly threatened to relocate the company’s headquarters out of California, putting pressure on Bonta to agree to a settlement.
Paramount is in a race against time to get the deal over the line as beyond the end of the month the movie studio will be forced to pay $7mn a day, totalling $650mn a quarter, to WBD shareholders in recompense for the deal’s closure dragging on.
The deal is set to reshape the entertainment industry, handing Paramount chief executive David Ellison, son of Oracle founder Larry Ellison, control of the DC Comics and Harry Potter movie franchises, as well as cable channels CNN and TBS and streaming service HBO Max.
Paramount and Bonta’s office declined to comment.
Shares in WBD jumped by 8.2 per cent in after-hours trading after The Wall Street Journal reported that Paramount was in advanced settlement talks.
Paramount has attempted to resolve the suits by pledging to release 30 films a year in theatres to protect the cinema industry, but Bonta has pushed back against such behavioural remedies, instead arguing for bigger changes such as asset sales.
The deal has received regulatory approval in nearly 70 jurisdictions, including most recently Mexico and the UK.
The Federal Communications Commission also earlier this week approved the 49.5 per cent foreign ownership interest, from Middle Eastern sovereign wealth funds, in the deal.