Negotiations between Paramount and California Attorney General Rob Bonta, representing 11 other states, have stalled in recent days over what concessions David Ellison's company should make to settle a lawsuit challenging its acquisition of Warner Bros. The deal, which appeared to be nearing completion late last week, faced a significant hurdle by Sunday night as the involved states found themselves unable to agree on their priorities.
Sources familiar with the talks indicated that while discussions were initially optimistic, the mood shifted to skepticism by Sunday evening. "Anything could happen at anytime: A deal, calling off talks or they continue talking for days," one insider told Page Six. "Negotiations like this are complicated. Usually they take a while, and there are still, 'many issues big and small.'"
One of the primary roadblocks is the disagreement among the 12 states regarding their desired outcomes. Reports suggest that potential concessions being discussed range from independent content monitoring of CNN and CBS News, to maintaining Warner Bros. and Paramount as separate entities for a period. Other points include financial penalties for falling short of Ellison's commitment to produce 30 films annually and commitments to remaining in California for production.
While California Attorney General Bonta reportedly does not prioritize the future of CNN, other state Attorneys General, including New York's Letitia James, are focused on the news network's status, as well as job protections. Some states, however, are more concerned with ensuring Warner Bros. and Paramount operate as distinct entities.
"Bonta doesn’t care about CNN, but other AGs do," a source familiar with the talks stated. "It seems [Paramount CEO] David [Ellison] may be willing to divest much of the cable assets, but he wants to keep CNN."
The Writers Guild of America (WGA) is also pursuing a lawsuit to block the deal, and its case is proceeding concurrently. A settlement between Paramount and the states would not automatically end the WGA's challenge, but it could complicate the guild's strategy, particularly if a hearing this week on Paramount's request for the states and WGA to post nearly $2 billion in bonds favors Ellison.
Paramount's pursuit of the Warner Bros. acquisition has been marked by contentious negotiations. In the preceding week, Bonta reportedly called Ellison's bluff when the Paramount CEO allegedly threatened to move the studio out of California, a threat that did not materialize.
Bonta's office has maintained an official stance of not commenting on the specifics of the settlement talks, stating in a previous release, "What Paramount decides to do is Paramount’s choice alone. We’ll continue to apply the law without fear or favor and continue to be open to coming to the table for good faith discussions."
Paramount has declined to comment on the ongoing negotiations. The approaching October 1 deadline looms, by which time Paramount faces an additional daily payment of $7 million if a settlement is not reached. This deadline is also reportedly tied to Ellison's stated timeline for potentially relocating the studio out of California.