Judge Sets Date For Settlement Talks In Paramount-WBD Antitrust Case

Paramount and the State Attorneys General suing to block its merger with Warner Bros. Discovery were ordered by a judge to appear for a two-day settlement conference Oct. 14-15 in a San Francisco courtroom.

It’s a mandated step for two sides approaching a trial, set in this case for early March, and doesn’t mean there’s been any particular behind-the-scenes progress in reaching an agreement. California AG Rob Bonta, who is leading a group of 12 AGs in the antitrust case, canceled a scheduled meeting last month after accusing Paramount of leaking details of a prior discussion. Paramount denied this.

Bonta has insisted publicly on “structural” remedies like asset sales that may include divesting Warner’s cable networks and retaining a degree of separation between the Paramount and Warner Bros. film studios. Paramount CEO David Ellison has made promises about the merged company’s film output (30 a year) and theatrical terms. He has also threatened to relocate the studio out of California if the case drags on.

The company will start racking up a $7 million a day ticking fee on Oct. 1 if the merger hasn’t closed as part of its agreement with WBD. That’s the date, he told senior managers, that he’d start looking seriously at other states.

Magistrate Judge Thomas S. Hixson told the parties in a court filing Monday to send him, and exchange with each other, settlement statements no later than Oct. 7. Those are documents that briefly state claims and defenses, a description of the major issues in dispute, “a candid evaluation of the parties’ likelihood of prevailing” and relief sought. The parties should describe any “discrete issue that, if resolved, would facilitate the resolution of the case” and their positions on settlement, including present demands and offers and a history of past settlement discussions.

Either side can also submit an additional confidential letter to the Court.

The filing said the parties should be prepared to discuss settlement objectives, any perceived impediments to settlement, “and the possibility of a creative resolution of the dispute.”

Reps from the WGA, which is also suing to block the merger, will participate.

The list of attendees is due October 12. The settlement statements are private, as are the meetings. Statements made during the conference are confidential and will not be admissible at trial if the case does not settle.

The sides were told to notify the court if the case settles earlier.

Meanwhile, a separate hearing is set for Sept. 24 where a judge will rule on Paramount’s request that plaintiffs put up a $1.88 billion bond to cover the ticking fee. It will accrue daily even if the company ultimately prevails at trial.

The States argue that nothing beyond a nominal bond is due. The Department of Justice, which approved the Par-WBD merger in June, came out in support of the bond earlier today. “The bond requirement forces parties to have skin in the game, and also provides a measure of protection to defendants who were ultimately found to be wrongly enjoined,” it wrote.