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California Attorney General Rob Bonta is expected to demand significant concessions from Paramount before approving its proposed $110 billion acquisition of Warner Bros. Discovery, including the sale of certain cable channels and safeguards separating the companies’ movie studio operations.
According to a Wall Street Journal report citing people familiar with the negotiations, Bonta is expected to seek commitments aimed at addressing competition concerns surrounding the massive Paramount-Warner Bros. merger.
Paramount representatives and California state officials are scheduled to meet Monday to explore a potential settlement of the state’s antitrust lawsuit. Lawyers representing both sides met Friday to establish an agenda, with cable television and motion-picture operations expected to be among the main issues discussed.
Paramount, Warner Bros. Discovery and the California Attorney General’s office did not immediately respond to requests for comment outside regular business hours.
California and 11 other states filed a lawsuit last month seeking to block Paramount’s $110 billion takeover of Warner Bros. Discovery. The states argue that combining the two major entertainment companies could weaken competition in film distribution and cable television.
The lawsuit alleges that the transaction could hurt movie theaters and pay-TV distributors while potentially leading to higher consumer prices. Some states have also raised concerns that reduced competition could weaken wages and employment conditions for workers across the entertainment industry.
Paramount has rejected claims that the acquisition would result in less content or reduced competition. The company maintains that combining the businesses would strengthen production capabilities and allow the merged entertainment group to release more films.
Paramount CEO David Ellison has pledged that the combined movie studios would produce and release 30 films annually, presenting the commitment as evidence that the merger could increase theatrical output.
However, the states challenging the Paramount-Warner Bros. deal have argued that the 30-film commitment cannot be effectively enforced. Monday’s discussions could therefore prove important in determining whether divestitures and other concessions can resolve California’s antitrust concerns or whether the legal battle over the blockbuster media merger will continue.
