Political Pressure Driven Paramount-WBD Settlement, Sources Say

California Attorney General Rob Bonta's decision to settle with Paramount and allow its acquisition of Warner Bros. Discovery was significantly influenced by political pressure from Governor Gavin Newsom, Los Angeles Mayor Karen Bass, and California Attorney General Xavier Becerra, according to sources familiar with the negotiations. This political maneuvering reportedly played a crucial role in clearing a major hurdle for the formation of a new media giant.

Paramount CEO David Ellison and his team intensified their efforts in recent weeks, emphasizing the company's seriousness about relocating its operations from Los Angeles to potential hubs in Nashville, Tennessee, or Austin, Texas. Ellison directly communicated this possibility to Bonta in a private meeting late last week. Paramount's legal team, led by chief legal officer Makan Delrahim, employed a multi-pronged strategy, including lobbying centrist Democrats concerned about job losses, pushing for the state attorneys general involved to post a significant bond, and seeking intervention from Republican state attorneys general to block the lawsuit. The Supreme Court's decision that prosecutors needed to respond to the complaint was also seen as a factor.

The political pressure created a rift within the state's Democratic Party, as moderates grew increasingly concerned about the potential departure of Paramount and the estimated 50,000 jobs it could take with it, along with the closure of the iconic Paramount lot.

"All these people – Newsom, Bass and Becerra – are running for office now and in the future; Newsom wants to be president. Were they going to risk their political career over a lawsuit that has little antitrust merit?" one person familiar with the negotiations stated. "No way."

Despite progress in settlement talks, disagreements persisted until Sunday night. While Bonta began to concede on certain points, agreeing to drop significant structural reforms in exchange for employment guarantees and a commitment to film production in California, other state attorneys general, such as Connecticut's William Tong and New York's Tish James, initially sought more substantial concessions, including the potential spin-off of cable channels. These demands were reportedly influenced by progressive donor bases, including unions and liberal groups, who opposed the deal due to the involvement of Larry Ellison, David Ellison's father and a major financial backer of the merger.

Actor Mark Ruffalo emerged as a vocal opponent of the merger, urging Bonta to reject the settlement. His public statements, which linked the merger to his father's business dealings with Israel and suggested it could promote genocide, drew criticism from Paramount and many major Jewish organizations. Hollywood figures, particularly those with pro-Israel ties, reportedly alerted Newsom, Bass, and Becerra, arguing that Ruffalo's comments had undermined Bonta's case by alienating fellow Democrats and that the politicians needed to intervene to ensure the deal's approval.

Many Hollywood executives also voiced their concerns to Bass, Newsom, and Becerra, fearing that if Bonta could block the merger of companies perceived as needing to combine to survive, other businesses might consider relocating from California. The European Union had already approved the acquisition.

One individual familiar with the negotiations noted that Bonta became more amenable over the weekend, particularly after acknowledging Larry Ellison's relocation of Oracle from California. David Ellison had also expressed serious intent to move operations. The controversy surrounding Ruffalo's statements was seen as detrimental to Bonta's position within his own party.

A late Sunday afternoon meeting involving all 12 state attorneys general saw Bonta advocating for the deal. Ultimately, James and Tong agreed to a settlement focused on employment guarantees and guidelines for the independence of CNN and CBS, rather than structural changes. Paramount executives reportedly grew anxious as the resolution of the talks remained uncertain, with a key Oct. 1 deadline approaching and the possibility of relocating to Nashville looming.

The Ellisons "were scared because it really seemed like it was touch and go on Sunday," a source close to the discussions remarked. The agreement in principle was reached Sunday, with the settlement officially finalized on Monday.