Warner Bros. Discovery (WBD) surged 8.3% in after-hours trading after reports emerged of advanced settlement negotiations tied to its pending $110 billion merger deal.
The Wall Street Journal reported that Paramount Skydance (PSKY) is in advanced talks with California Attorney General Rob Bonta to settle a 12-state antitrust lawsuit seeking to block the deal.
David Ellison’s Paramount Skydance and Bonta’s office are discussing potential compromises that could resolve the legal challenge currently holding up one of the largest media transactions in recent history.
Bonta has previously stated he is open to an out-of-court resolution, but has insisted on structural remedies rather than behavioral ones, such as divestments rather than pledges like releasing 30 films in theaters annually.
Among the compromises reportedly on the table is an agreement for Paramount to operate the two companies’ movie studios separately for a period, rather than combining them immediately after the deal closes.
Reuters later reported that Paramount and the state attorneys general could reach a settlement “as soon as this weekend,” with terms including independent content monitoring of CNN and theatrical release commitments.
Despite the optimism surrounding the talks, no agreement has been finalized, and a spokesperson for Bonta’s office told TheWrap that “potential settlement talks are confidential.”
Several high-profile figures have publicly backed a settlement, including Los Angeles Mayor Karen Bass, California Governor Gavin Newsom, gubernatorial candidate Xavier Becerra, the Directors Guild of America, and IATSE.
Opposition to the merger has also been significant, with over 5,000 Hollywood figures including Jane Fonda and Mark Ruffalo signing a letter against it, while SAG-AFTRA and Hollywood’s Teamsters union have also spoken out.
Time pressure is mounting for Paramount, which has warned it could begin relocating operations out of California if no agreement with state officials is reached, with Tennessee named as a potential destination.
The outcome of these negotiations will carry major implications for the future of the American media landscape, as well as for thousands of industry workers whose jobs are tied to the proposed merger.
