Paramount Settlement Talks Prospects Dim For Now As Gang Of Four AGs Resist Quick Ellison Deal

EXCLUSIVE: As Hollywood prepares to celebrate Yom Kippur at sundown tonight, a framework for a settlement of the antitrust suit hampering Paramount‘s $111 billion acquisition of Warner Bros Discovery has hit some political potholes on the way to what some hoped would be a quick deal.

Four of the 12 Attorneys General that took the David Ellison-run company and WBD to federal court are breaking with the California AG Rob Bonta-led faction that wants to put the big buck, high stakes dispute to rest, at least for the time being. Along with the Golden State, the blue state coalition that sued Paramount and WBD back on July 13 in a long anticipated action is made up of Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington.

A March 2, 2027 trial date has been set in the matter, much to Paramount’s chagrin.

Now, as the pressure turns into a court of public opinion vice for blue state reps, it is Minnesota AG Keith Ellison who has taken the reigns in resisting an agreement with David Ellison (no relation, but the irony is undeniable) and by inference the Para CEO’s father, Donald Trump’s “good friend,” and Oracle founder Larry Ellison. A longtime Democratic powerbroker, the North Star State’s Ellison is joined in the Gang of Four by NY’s powerful AG Letitia James, Connecticut’s William Tong and, indications are, Washington state’s Nick Brown.

With a plethora of topics on the table, the quartet are concerned that settlement parameters are “too lenient to Paramount” I hear. The states want Bonta to slow down and not overreact to threats of Paramount leaving California or other external pressures.

Specifically, as more and more fellow Democrats, Hollywood A-listers and activist urge rejecting a settlement with the MAGA adjacent Para, the Gang of Four are pessimistic of the power of a proposed CNN Editorial Board. “It has no teeth,” an individual close to discussions tells Deadline. “Ellison wants a deal, Bonta is feeling pressure to make a deal. Both want an off-ramp. The worry among the four states that have yet to sign off on a settlement is that some “window decorating” around CNN plus some cable sell-offs could be enough for Bonta to walk away from the larger legal battle with Paramount after months of hanging tough.

Over a weekend of remote talks, as the October 1 deadline for a $7 million a day ticking fee to WBD shareholders gets closer, a variety of items have been brought up to find common ground. To that, with court-ordered settlement talks already on the books for mid-October, the notion of making the two studios completely separate for at least two years has been floated.

As it stands tonight, things are in a state of suspended animation until next week, with one M&A vet telling me the Yom Kippur break could either “make or break” the talks going forward.

United with the AGs from almost the get-go, the WGA has been on the sidelines of current talks, I’m told. Yet, with outrage and now protests from the star-studded Block the Merger group (Oakland today, NYC Monday and outside Paramount in L.A. on September 22), the guild has been getting an earful from members, sources says. Additionally, the WGA leadership has been in contact with the office of NY’s James to “gauge the temperature” around any settlement, an East Coast insider notes.

In what one source called a “civil atmosphere,” the parties have also been very much aware of the busy calendar this week after the holiday. On September 24, a hearing is set before U.S. District Judge Araceli Martínez-Olguín on Para’s Hail Mary desire for a $1.88 billion bond from the AGs and suit partner the Writers Guild of America to cover the “extraordinary losses” the company says it will suffer waiting for the two-week trial to start next spring. The very next day, with the politics of Trump and the midterms never far from anyone’s mind, the AGs and the WGA have to reply to a motion by red staters Iowa and Montana to take the whole matter to the Supreme Court.

Neither Keith Ellison or Letitia James’ offices responded Sunday to Deadline’s request for comment on any settlement or gearing down. Paramount brass and Rob Bonata’s office also had nothing to say tonight about the state of the talks. However, the usually quick with a statement or interview availability CA AG did post a Yom Kippur message on his Threads account.

Read between the lines if you think there is something between the lines:

At the opening of the Lucas Museum of Narrative Arts on September 19, CEOs, Oscar winners, Jedis and more celebrated in an A-lister only event with the Star Wars creator and spouse Mellody Hudson, the Paramount talks were the talk of the shindig. One well-placed guest said to be in close touch with the talks told several attendees that while a deal wasn’t 100% done, the deep freeze between Bonta and Paramount’s Ellison was “unstuck.” Battling a tough campaign for reelection, L.A. Mayor Karen Bass was said to have stated to fellow Lucas attendees that a deal was “close.”

David Ellison wasn’t at George Lucas‘ soiree, nor was still WBD boss David Zaslav. The Paramount CEO was also nowhere to be seen ringside or elsewhere Saturday night at UFC 331 held at DTLA’s Crypto.com Arena.

Whether the Force is strong with proponents or opponents of a settlement, one idea certainly being considered for everyone to save face and the Ellisons to avoid that pricey ticking fee of their WBD deal is as a hold-separate arrangement. The corporate mechanism could allow the antitrust suit to proceed, but take the ticking fee financial strain off the deep-pocketed Ellisons and their recently DOJ approved Gulf State backers.

Even if the companies are held separate in a compromise deal, it would be good news for Paramount’s expense ledger but possibly bad news for its stock and that of WBD. The market has shown over the past two months that it doesn’t like limbo, and neither does the industry, which has grown restless about the damage already being done by the merger delay. (Sworn foes of the merger would argue that a period of stasis is better than what they see as heavier carnage were the merger to proceed.)

A hold-separate agreement has been struck before, including in the case of Time Warner and AT&T’s $85 billion merger in 2018. It also factored into Nexstar’s acquisition of TV station rival Tegna, which was opposed by state AGs and DirecTV — though in that instance it was after the merger had already closed in a still-pending lawsuit.

The past several weeks has seen a constant drip of leaks that Paramount will leave California if it doesn’t close the ParaBros deal or get a settlement soon. Even as the reelection and ambitious Bonta has cancelled previous settlement talks and called Team Ellison’s tactics “blackmail,” a growing chorus that includes outgoing Governor Gavin Newsom, likely next Governor Xavier Becerra, incumbent Bass, and IATSE have urged this all be settled “in the boardroom, not the courtroom.” Add to that, there’s been reports to the L.A. Board of Supervisors predicting big job losses if ParaBros become a reality. On the other hand, there’s also been Paramount commissioned reports to the powerful Supervisors promising even bigger jobs losses if the Melrose lot leaves, but an employment and production bonanza if the deal goes through.

With all that, worth noting that AG Keith Ellison’s radio silence today is very different from how adamant Ellison was earlier this summer when he took Paramount to town as the AGs suit hit the docket:

In contrast to AG Ellison’s current silence, ever since reports surfaced of a potential settlement emerged on September 18, Congressional Democrats, many of whom could hold key committee chair roles if the midterms occur and their poll leading party takes control, have been very vocal about Bonta and gang’s need to “hold the line” against a rushed deal. “With Trump and his billionaire allies crushing independent media, we need state AGs to stand strong against more corporate media monopolies,” Connecticut Senator Chris Murphy tweeted Sunday. “The AGs should keep fighting to block Paramount’s illegal merger with Warner Bros. Discovery.” Murphy was joined by dozens and dozens of his colleagues, including New Jersey’s senior Senator Cory Booker.

The long time foe of the merger weaved in the latest attack on the press by Ellison pal Trump in a tweet today:

Trump just locked CNN out of the White House. Now his billionaire allies want to own it. State attorneys general: Don't settle. Hold the line. Block this merger.

— Sen. Cory Booker (@SenBooker) September 20, 2026