California Halts Settlement Talks Over Paramount-Warner Deal

California Attorney General Rob Bonta has canceled a scheduled meeting with Paramount Skydance representatives that was intended to begin settlement discussions over the state's lawsuit seeking to block the company's proposed $110 billion acquisition of Warner Bros. Discovery.

Bonta's office said the meeting, scheduled for Monday, was called off after the attorney general accused Paramount of leaking information about confidential discussions and misrepresenting what had been discussed.

The move creates another obstacle for Paramount as it attempts to resolve the legal challenges threatening its proposed takeover. The California case is one of the final major hurdles facing the transaction, alongside a separate lawsuit brought by the Writers Guild of America.

Paramount has been pushing for a settlement to avoid a trial scheduled for March. Continuing the litigation could expose the company to significant additional costs and fees as it works to keep the deal on track.

Bonta said his office had met with Paramount on Friday but accused the company of failing to negotiate in good faith.

"Not only did Paramount leak the alleged substance of settlement discussions, but they misrepresented these discussions, demonstrating a lack of good faith," Bonta said.

He added that California remained willing to resume negotiations if Paramount approached the process more seriously.

Paramount rejected the accusation, saying it also shared concerns about public reports surrounding the negotiations and insisted that it had not been responsible for any leaks.

The company said it remained prepared to continue discussions with California and other attorneys general in an effort to resolve the lawsuit and proceed with the merger.

Bonta has previously indicated that he is generally open to resolving legal disputes through settlements. However, he has also argued that structural remedies - such as requiring a company to sell parts of its business - can be more effective than relying on promises to change corporate behaviour.

That issue could prove critical in the Paramount-Warner negotiations.

Paramount Skydance Chief Executive David Ellison has pledged to increase movie production to 30 films a year and keep those releases exclusively in cinemas for at least 45 days.

California and 11 other states filed a lawsuit on July 13, arguing that the proposed merger would create a powerful media company capable of increasing prices and reducing competition across the film and television industries.

According to a report in The Wall Street Journal on Sunday, Bonta was expected to seek significant concessions before agreeing to the merger. Those could include the sale of certain cable channels and a commitment to maintain Warner Bros.' movie studio as a separate operation from Paramount.

Such demands could become central to any renewed settlement negotiations, particularly if California continues to oppose the acquisition without substantial structural changes.

For now, the cancellation of Monday's meeting leaves the two sides further apart, increasing uncertainty over whether Paramount can secure the approvals needed to complete its proposed takeover.