Deal or No Deal? The Contours of a Paramount Settlement for WBD Begin to Take Shape

What’ll it take for Paramount to get its $111 billion deal for Warner Bros. Discovery over the line? We may be about to find out.

Paramount and the state attorneys general have spent the weekend hashing out potential settlement terms, and the trickle of leaks from those talks are painting a picture of what a potential deal might look like … even if some of the AGs (not to mention the WGA) may not all be on the same page.

Among the terms being floated, according to reports from the Wall Street Journal, Bloomberg and others: selling off some cable channels (one source cited Comedy Central as a possibility given its wide reach). If the company sold off enough channels, it would serve as a structural remedy to the cable portion of the antitrust suit, giving it a smaller portion of the pay-TV ecosystem.

On the film front, the two sides could hammer out some sort of enforceable mechanism to guarantee the 30 films per year guarantee that Paramount CEO David Ellison has promised (Bloomberg pegged it at a $30 million per film penalty), as well as potentially keeping the film studios separated within the combined company presumably with their own development, marketing and distribution teams).

Production is likely to be a key piece of a settlement, including maintaining the two studio lots in Los Angeles, and some sort of production guarantees (the WSJ pegged it as $1.5 billion in California alone), though it remains to be seen if they are California-specific, U.S.-wide or some combination thereof. Suffice it to say states like New Jersey or New York may not be as eager to guarantee jobs in California specifically. Paramount had threatened to exit California if the antitrust suit goes to trial, with Ellison privately saying that he may have to start those logistics in October.

And then there’s CNN, where executives inside and outside the company (including Ari Emanuel) have floated the idea of a CNN oversight board to ensure editorial independence for the cable news channel. CNN is said to be a particular sticking point for New York Attorney General Letitia James (CNN has a heavy presence in NYC) as well as Connecticut AG William Tong. In any sort of oversight board situation, however, the devil will be in the details, which could make it tough to find common ground on.

Even if the two sides (California’s Rob Bonta is leading the coalition of states) do come to a preliminary deal, any rogue states that don’t agree to the terms, or the WGA, could potentially throw a wrench in things.

The stakes couldn’t be higher in the talks, which may or may not progress Monday, which is the Yom Kippur holiday. The future of Hollywood hangs in the balance, one way or another.