LOS ANGELES — Paramount Skydance and California Attorney General Rob Bonta have engaged in advanced settlement talks regarding an antitrust lawsuit filed to block the company's $111 billion acquisition of Warner Bros. Discovery. The negotiations occur as Paramount has threatened to relocate its Hollywood operations to Tennessee, Texas, or Georgia if the litigation is not resolved.

The legal challenge began in July 2026 when Bonta and 11 other state attorneys general filed suit to stop the merger. Paramount agreed to pay Warner Bros. Discovery shareholders a $7 million per day fee starting October 1, 2026, if the transaction does not close by that date.

The company stated the delay could cost it about $1.3 billion in fees to Warner Bros. Discovery shareholders by April 2027.

Settlement discussions have included proposals for Paramount to operate the Paramount and Warner Bros. Film studios separately for a period of time. The talks also included proposals for a third-party editorial adviser or board to monitor CNN and CBS News, as well as commitments for Paramount to remain in California for a set period. Discussions included a pledge by Paramount to produce at least 30 films per year.

Bonta has stated he requires structural remedies, such as divestitures, rather than behavioral remedies like separate operations under common ownership. "There needs to be separate ownership. If it’s under the same Paramount-Warner Bros. merged-entity roof, that’s not separate," Bonta said.

He described Paramount’s threat to leave California as blackmail. Paramount CEO David Ellison stated the company is open to settlement talks if conducted in good faith. "We are always open to coming to the table if it is in good faith and it is sincere. And we will always explore an opportunity to get the results that we want based on our evaluation of the case at the table," Ellison said.

In a February 28 letter, Ellison wrote that he promised to keep the Paramount and Warner Bros. Legacy studios operating separately. "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," he wrote.

California risks losing more than 50,000 jobs if Paramount relocates. Los Angeles Mayor Karen Bass publicly urged Bonta to settle the lawsuit to keep entertainment jobs in Los Angeles. "I will continue to engage with Paramount, Attorney General Bonta, and entertainment leaders to keep jobs in LA. This industry was built here. Its workers are here. I’m going to fight like hell to keep it here," Bass said.

California Governor Gavin Newsom also publicly urged Bonta to settle the lawsuit. Bonta’s office stated it would not confirm or deny whether settlement talks are occurring. "Potential settlement talks are confidential. We cannot confirm or deny whether settlement talks are occurring or their alleged substance," a spokesperson for Bonta said.

The office stated that Paramount’s decision to relocate is Paramount’s choice alone. "It’s no secret that Paramount has been making this threat, despite its alleged commitment to California and Hollywood. 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, the spokesperson said."

A source close to Paramount stated the company’s strategy is to isolate Bonta within his party. The game plan is to isolate Bonta in the state and in his own party. Every Dem pol in the state wants a settlement and is worried that Ellison will leave. They also think his antitrust case is a joke," the source said."

Sources within Paramount stated the company is deadly serious about leaving California. New York Attorney General Letitia James and Connecticut Attorney General William Tong have expressed reservations about the proposed settlement terms. Representative Jamie Raskin urged state attorneys general to oppose the merger settlement. "State Attorneys General, please hang tough against the giant proposed Paramount-Warner Brothers merger. Paramount, run by the Ellisons, should not own both CBS and CNN. California must not cave and take a deal that leaves both under the same owner, Raskin said."

Representative Ro Khanna urged Bonta to reject a settlement that allows Paramount to own both CBS and CNN. Paramount, run by the Ellisons, should not own both CBS and CNN. California must not cave and take a deal that leaves both under the same owner, Khanna said.

Senator Elizabeth Warren opposed the merger, citing concerns about media consolidation. As Trump tries to ban CNN from the White House, it would be a massive mistake to cave on the Paramount merger. The last thing we need is another Trump-controlled media conglomerate abusing its power to stomp out competition. This is a dangerous merger, Warren said.

Actor Mark Ruffalo urged Bonta to reject the settlement. Don’t you dare @AGRobBonta, do not cave. 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 said. Ruffalo stated that 5,670 filmmakers and over 75,000 signatories urged the Attorney General to reject the settlement deal."

The Block the Merger Coalition stated that rumored settlement terms were unacceptable. Protests against the merger settlement were planned for September 21, 2026, outside Bonta’s office in Oakland. Protests were also planned for September 22, 2026, outside James’ office in New York City, and for September 23, 2026, outside the Writers Guild of America West headquarters in Los Angeles. The Writers Guild of America filed a separate antitrust lawsuit to block the merger.

U.S. District Judge Araceli Martínez-Olguín scheduled a trial for March 2027. Paramount lawyers requested that the states and the Writers Guild of America post a $1.88 billion bond to cover delay-related costs if Paramount prevails. A hearing on the $1.88 billion bond request is scheduled for September 24, 2026.

Larry and David Ellison control Paramount Skydance, owning 77.5% of the voting shares and 47.2% of all shares. RedBird Capital Partners owns 22.5% of the voting shares and 13% of all shares of Paramount Skydance. The Federal Communications Commission approved Paramount’s petition to allow 49.5% of its equity to be held by foreign entities upon completion of the Warner Bros.

Discovery acquisition. Paramount Skydance is partially funded by sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi.

Paramount maintains that the merger would create a stronger company capable of competing with tech giants such as Apple, Netflix, Google, and Amazon. Paramount’s regulatory filings list its Times Square offices in New York as its corporate headquarters. The U.S. Department of Justice Antitrust Division completed an eight-month investigation into the merger, reviewing over two million documents from over 80 custodians, and determined the transaction is not likely to result in harm to competition.

Experts Fiona Scott Morton, Gene Kimmelman, and Norm Eisen published an opinion piece arguing that Paramount’s threat to leave Los Angeles lacks business sense. "Ellison’s threat is empty, and the AG should call that out — not give into it," Scott Morton said. "Paramount [would be] sinking the cost of moving before it knows what businesses it owns and how best to combine and organize them — which makes expensive strategic mistakes inevitable. A company that raises its own costs while leaving behind the most valuable labor in the industry does not threaten California; it threatens itself, Kimmelman said."

Steve Kang, Los Angeles Mayor Karen Bass’s film czar, stated that the city is preparing for all options regarding Paramount’s potential relocation. We’ve heard the same information that everybody has. We need to be prepared for every option to be available — whether it’s true or not," Kang said."

Why It Matters

The outcome of these settlement talks will determine the structure of one of the largest media mergers in history and the future of the entertainment industry in California. The state risks losing more than 50,000 jobs if Paramount follows through on its threat to relocate operations to Tennessee, Texas, or Georgia. The conflict shows the tension between state antitrust enforcement aimed at preventing media consolidation and corporate strategies to manage regulatory hurdles through financial pressure and political lobbying.

Timeline

On December 23, 2008, Cohen v. United States District Court for the Northern District of California proceeded to the Court of Appeals for the Ninth Circuit, where Circuit Judge Betty B. Fletcher addressed a petition by Roberto Cohen. On February 28, 2026, David Ellison wrote in a letter that he promised to keep the Paramount and Warner Bros. Legacy studios operating separately, stating, "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." In July 2026, California Attorney General Rob Bonta and 11 other state attorneys general filed an antitrust lawsuit to block the merger.

What's New

Additional reporting indicates that he says the delay could cost it about $1.3 billion in fees to Warner Bros. Discovery shareholders by April 2027.

It has emerged that Paramount and Bonta have engaged in advanced settlement talks regarding the antitrust lawsuit. Bonta described Paramount’s threat to leave California as blackmail. A source close to he stated the company’s strategy is to isolate Bonta within his party. Bonta has stated he requires structural remedies, such as divestitures, rather than behavioral remedies like separate operations under common ownership, noting, "There needs to be separate ownership. If it’s under the same Paramount-Warner Bros. merged-entity roof, that’s not separate."

How Sources Differ

Sources differ on details regarding Paramount. The California Office of the Attorney General states that Paramount Skydance has proposed an $111 billion acquisition of Warner Bros. Discovery, while a Federal Communications Commission order notes that the FCC approved Paramount’s petition to allow 49.5% of its equity to be held by foreign entities upon completion of the acquisition.

Regarding Warner Bros. The Attorney General’s office cites the $111 billion acquisition proposal, whereas the merger agreement specifies that Paramount agreed to pay Warner Bros. Discovery shareholders a $7 million per day fee starting October 1, 2026, if the transaction does not close by that date. On the topic of Warner Bros. Costs, the Attorney General’s office reports that he says the delay could cost it about $1.3 billion in fees to Warner Bros. Discovery shareholders by April 2027, while the FCC order focuses on the approval of foreign equity holdings. Regarding discovery shareholders, the Attorney General’s office cites the potential $1.3 billion cost, while the merger agreement details the $7 million per day fee structure. On the issue of the attorney general, primary and additional sources report that Representative Ro Khanna urged Bonta to reject a settlement allowing Paramount to own both CBS and CNN, while other data indicates that Mark Ruffalo stated that 5,670 filmmakers and over 75,000 signatories urged the Attorney General to reject the settlement deal. Regarding settlement discussions, multiple sources indicate talks included proposals for separate studio operations, while another source notes discussions included a pledge by Paramount to produce at least 30 films per year. On the subject of Warner Bros. Operations, some sources cite the settlement proposals for separate operations, while a letter from David Ellison references his earlier promise to keep the legacy studios operating separately. Finally, regarding the attorney general, some sources report that Mark Ruffalo urged Bonta to reject the settlement, while others note Ruffalo’s statement regarding the number of filmmakers and signatories urging the same action.