Paramount & AGs Settlement Meeting Monday More Show Than Substance As Cable Channel Sell-Offs & Curbing Ellison’s Power Put On The Table

EXCLUSIVE: A meeting Monday between Paramount brass and state Attorneys General over sussing out settlement talks between the parties in David Ellison‘s contested $111 billion acquisition of Warner Bros Discovery has turned into a “game of PR chicken,” an industry insider says. “Ellison and Makan Delrahim think they can force Rob Bonta into backing off with threats and intimidation,” a Tinseltown mandarin points out, as leaks out of Paramount insist the company is considering leaving California if the antitrust suit filed by the Golden State’s AG Bonta and 11 others ends up going to trial in May 2027. “That’s not going to work. He’s more determined that ever to take them to court, the rest is all for show, to take the pressure off.” A part of that so-called show and responding to settlement calls from corporate and political stakeholders are some pretty audacious proposals that were discussed in August 21 communications between the AGs’ offices, their Milbank outside counsel, and the Melrose lot. Watch on Deadline It wasn’t quite the drama of Reagan and Gorbachev in Reykjavík in 1986, but there certainly were landmines. Setting the stage for the August 24 conference, Team AG are asking Paramount to sell off several of WBD’s cable channels. The Wall Street Journal first reported the potential conditions earlier Sunday. Doubting Ellison’s repeated promise to release 30 movies a year in cinemas is real or even possible, the states’ also want the movie studios kept separate, Deadline has confirmed. Bonta, New York’s Letitia James and the other blue state AGs have said they will bring a codicil of sort to the table for the August 24 huddle. In what is both a boss move and a poison pill, the AGs want Donald Trump’s “good friend” David Ellison agree to not have any day-to-day oversight or control of WB, I’m told. California Attorney General Rob Bonta left, Paramount CEO David Ellison Getty Images “David’s not going to go along with any of that, and Bonta knows it,” a studio exec told Deadline Sunday of stipulations that would neuter the mogul aspiring Para CEO and gut most of any immediate revenue streams for a $80 billion debt carrying ParaBros combo. Using terms like “performative” to describe Bonta and the other AGs staff agenda items, the exec asserts: “Ellison needs those cable channels, that’s still where the money is.” Though the object of much chatter and always in Trump’s bad books, sparkly CNN does not appear to be among the cable jewels the AGs want Oracle founder Larry Ellison’s son to divest himself of to get the merger done. HBO and HBO Max are not part of the talking points for the meeting, to no surprise. Individuals from different corners of the corporate, political and legal arena as well as with co-plaintiffs the Writers Guild of America, tell Deadline that expectations are “intentionally low” for that Monday’s meeting. “No one trusts anyone on the other side, it’s obvious,” the industry insider claims of the big law firms feeding frenzy, the big stakes and big personalities involved. “The states’ think Paramount’s going to say whatever they need to say to close the merger and avoid paying fees. Paramount think this is all partisan politics. Both sides are wrong and right, not willing to give anything big up. That’s not going to work if you want a deal.” While Paramount has made some minor M&A and ownership concessions outside the US and the UK for regulatory approval of the merger, the agenda items the AGs are throwing down are on a whole other level. A de facto obligation under the mediation proceedings routinely initiated in federal civil cases to prevent costly and time consuming trials, the perfunctory August 24 gathering took on exalted status in past 55 hours. After placed items that a Red State could become Para’s new HQ, and a tactical but punted Hail Mary request for the states to pony up a $1.88 billion bond to offset the “extraordinary losses” the states’ case could cause home of The Godfather, increasingly lame duck Governor Gavin Newsom suddenly joined the chorus of exhibitors, gubernatorial candidates, the DGA, IATSE and flipping and then flopping again LA Mayor Karen Bass to break his Sphinx-like silence last week. Newsom said he believed “there’s some universal settlement there, if that’s possible” between his close colleague Bonta and his reported pal Ellison. Stressing on August 21 he took “seriously” the threats Paramount may leave California, the probable 2028 POTUS contender threw some Red media meat into the mix, adding: “I know there are many meetings that are going on, and there’s a lot of conversation.” Paramount had no comment Sunday on any proposals put forth late last week for discussion in Monday’s part face-to-face, part virtual meeting. The CA AG’s office, the NY AG’s office and the WGA did not respond to Deadline’s request for comment tonight. However, in what could be the first conversation between Ellison and Bonta since the AGs filed their now WGA joined antitrust action on July 13, there is hope on both sides that the principals can at least lower the temperature a tad. To that, Ellison may need to get much more directly involved Monday and going forward as a backlash is growing against Para’s chief legal officer and merger field marshal Delrahim. “It’s not just he says one thing in public, another in private,” a source close to events tells Deadline of the “frustrated” opinion officials have of the former Trump Assistant Attorney General and antitrust boss. “He seems to want to provoke a conflict for conflict’s sake.” Back in court, Judge Araceli Martinez-Olguin last week set August 26 as the date a Magistrate judge will be selected for mediation between Para and the AGs/WGA. An amended proposed scheduling order is due from the parties the same day. Besides leaks, tweets and the usual spin from the participant Monday, that order may prove to be the best indication what direction this all could really be going.