Paramount Settlement Talks With State AGs Reach Critical Stage as Merger Opponents Rally and Urge Rob Bonta ‘Do Not Cave’

Paramount Skydance is moving closer to the finish line of its yearlong pursuit of Warner Bros. Discovery as the company’s weekend settlement negotiations with the state attorneys general reach a critical stage. Meanwhile, opponents of the merger are rallying to protest what it warns is shaping up to be a “cave” by the 12-state coalition that has sued to block the Paramount-Warner Bros. on antitrust grounds. The federal lawsuit filed in July by 12 states, including California and New York, is the last obstacle that Paramount has to clear to close the $110 billion acquisition agreement that it reached in late February. Paramount is on the hook to pay WBD shareholders an additional $7 million a day as of Oct. 1 if the deal is not closed, hence the urgency for Paramount. Sources familiar with the situation said the negotiations with the state AGs, by Bonta, appeared to be moving in a positive direction. Popular on Variety The sides were expected to be in communication Sunday but will pause by evening for the Yom Kippur holiday if the sides have not yet come to an agreement. As talks between the two sides continue — with the expectation that the situation could come to a head as soon as Sunday night — antimerger activists are planning a series of rallies in Oakland, Los Angeles and New York. California Attorney General Rob Bonta has demanded “structural remedies” as part of the agreement, but rumors have indicated that his office may agree to something that falls well short of that. The Wall Street Journal, citing unnamed sources, reported Friday that the deal might include operating the two studios “separately for a period,” rather than immediately combining them. But David Ellison, the CEO of Paramount Skydance, has already agreed to separate operations in some form. In a Feb. 28 letter to Sen. Adam Schiff and Rep. Laura Friedman, two California Democrats, Ellison wrote: “my promise to you is to build a stronger Hollywood, by keeping both of these legacy studios operating separately, thereby preserving and potentially increasing jobs.” The discussions have also included output — including Ellison’s longstanding pledge to produce at least 30 films a year, according to two sources familiar with the talks. Meeting remotely, the two sides have also discussed a written agreement to remain in California and a third-party “editorial adviser” for CNN and CBS. Bonta has repeatedly said that such “behavioral” remedies are weak and difficult for states to effectively enforce. In an interview with Variety last month, he also described separate operations as a “behavioral” remedy. “There needs to be separate ownership,” he said. “If it’s under the same Paramount-Warner Bros. merged-entity roof, that’s not separate.” Sources close to the situation reinforce the suggestion from a report in the Wall Street Journal that enforceable commitments for Paramount to operate some or all of Warner Bros. Discovery assets as separate entities from Paramount could be a path forward for a settlement, which might also include job preservation commitments for a fixed period of time. Sources noted that the teams led by HBO CEO Casey Bloys and JB Perrette, president of WBD streaming and gaming and the business leader of HBO Max, appear to be shifting into deal-closing mode — a process both know well after years of M&A at Time Warner and Discovery Communications. Merger-watchers took note that Bloys and Perrette were prominent in the social swirl around the Emmy Awards this past week. “Casey looks happier than he has in a long time,” a knowledgeable source noted. A representative for Paramount Skydance declined to comment Saturday on the settlement talks. Outside the studio gates, the emotions stirred by the latest instance of media consolidation aren’t likely to cool down soon. The Block the Merger coalition warned Saturday that the rumored settlement terms were not acceptable, saying they are “an insult to everyone who has stood up against this harmful transaction.” Actor Mark Ruffalo, an outspoken merger opponent, also rallied his supporters to pressure Bonta not to “cave.” Ruffalo also happens to top-line the HBO drama series “Task,” which was recently picked up for a second season, setting up an awkward dynamic (to say the least) between network and star. But Ruffalo, a four-time Oscar nominee who was Emmy-nominated this year for “Task,” has been undeterred. “Don’t you dare @AGRobBonta, do not cave,” the actor wrote on X. “You work for the people — the very people who will be hurt if you let this lousy deal filled with empty promises go forward.” Ruffalo asked fans to turn out to Bonta’s office in Oakland at 5 p.m. on Sunday to voice opposition to the deal. Other such rallies were set for Monday, outside Attorney General Letitia James office in New York, and Tuesday, outside Writers Guild of America West headquarters in Los Angeles. The WGA has filed its own antitrust lawsuit, alleging that the deal will unlawfully reduce the market for writers’ work. The WGA is a party to the stipulation that blocks the merger from taking place before a March 2027 federal trial, but has not been involved in the settlement talks. The case is due to go before Judge Araceli Martinez-Olguin on Thursday, as Paramount is seeking a $1.88 billion bond from the WGA and the states as the price of holding the merger at bay. Cynthia Littleton contributed to this report.