As Paramount Settlement Talks With States Progress, Some AGs Are Pushing for Stronger Restrictions

On Sunday, settlement talks between Paramount and the state attorneys general that sued to block its Warner Bros. Discovery deal continued — but there was no resolution by the end of the day.

But while California Attorney General Rob Bonta, who is leading the 12-state coalition’s antitrust litigation, is said to be open to considering a set of conditions that would put certain restrictions on Paramount’s takeover of Warner Bros., at least two other AGs are pushing for stricter measures before they sign off on anything.

Over the weekend, the sides hashed out potential terms of a settlement. The sides were expected to put the negotiations on hiatus on Monday for the Yom Kippur holiday.

The terms discussed were said to include Paramount agreeing to operate Warner Bros.’ studio operations separately for a time (something Paramount chief David Ellison already said he was willing to do). Also on the table was a requirement that the merged Paramount-Warner Bros. release at least 30 films theatrically per year (a promise Ellison has already made, repeatedly), with financial penalties if they fail to hit that mark. In addition, the two sides also discussed a binding guarantee from Paramount that it would not relocate its existing California operations (as Ellison has threatened to do) and the formation of a third-party “editorial adviser” to oversee CNN and CBS News.

But some of the states want more.

New York Attorney General Letitia James, for one, wants Paramount to commit to specific job-protection guarantees, including for employees at Warner Bros., sources confirmed. Paramount has claimed it would achieve $6 billion in cost savings by merging with WBD — and that would imply thousands of layoffs.

In addition, Connecticut Attorney General William Tong is opposed to the current proposed settlement terms with Paramount, Variety confirmed. A source familiar with the AG’s position said he wants any agreement to include stronger provisions guaranteeing that CNN and CBS News remain independent from interference from Paramount’s owners, with more teeth than a third-party “adviser.” Details of the pushback by the New York and Connecticut AGs has been previously reported by CNN and the media industry newsletter Status.

The battle has taken on political overtones given the connections of Paramount Skydance CEO David Ellison and his family to President Donald Trump. The Justice Department and FCC have approved the transaction without asking for any concessions or remedies — an unusually hands-off approach for such a large horizontal merger. That opened the door for the 12 states to flex their legal muscle to scrutinize the combination.

David Ellison has voiced his belief, which is shared by other critics of the AGs’ legal maneuver, that the opposition to Paramount-WBD is about his control CNN — rather than antitrust concerns. “I believe this fight is not really about market share,” Ellison wrote in a New York Times op-ed. “I believe a plainer worry sits beneath the briefs and the news releases: the news. The issue is whether I can be trusted as a steward of Warner’s CNN.” Ellison has pledged that CNN and CBS News journalists “will continue to answer to the facts and to all the people they serve — not to any party or cause.”

The lawsuit filed by the 12 states and a similar antitrust case filed by the Writers Guild of America West are the last obstacles holding up Paramount’s closing of the WBD acquisition. It’s been a wild, yearlong chase that included Paramount having to outbid Netflix, which reached a deal to buy Warner Bros. and HBO n early December. The streaming giant was out of the picture by late February.

Even if Paramount is able to reach a settlement with the state AGs, the Paramount-WB merger will not close immediately, a knowledgeable source told Variety. Because of the $110 billion pact’s intricate financing — including some $24 billion from Middle Eastern government funds — and other factors, Paramount and Warner Bros. Discovery will need at least a week or so after any deal with the states is in place.

Tong, after the U.S. District Court for the Northern District of California granted the states’ request for a temporary restraining order halting the Paramount-Warner Bros. Discovery merger in July, said in an official statement: “This is a critical victory for American consumers, for objective and independent journalism, and for the workers, actors, artists and fans of our country’s celebrated film and television industry. We are suing to protect free and fair competition, choice and quality programming. This order demonstrates the strength of our case and the power of states stepping in to fill the void left by Trump’s absent Department of Justice.”

And New York’s James, after the 12 states initially filed their lawsuit in July, said in a statement: “For over a century, Paramount and Warner Bros. have competed to create movies and television that bring people together, inspire and sustain generations of artists, and help us understand the world. This merger would destroy that competition, creating a massive company with unprecedented power and influence over news and entertainment across the globe. Paramount’s acquisition of Warner Bros. threatens to raise costs for consumers and put jobs and businesses nationwide at risk.”