5 hrs ago
Paramount Settlement Talks Include California Commitment and Asset Sales
Paramount wants to buy Warner Bros.
Discovery, but several states and the Writers Guild are suing to stop the deal.
California officials and Paramount are discussing a possible settlement.
The proposed agreement could require Paramount to stay in California and make other changes.
These changes might include releasing 30 movies in theaters each year and selling some cable channels.
There could also be an editorial board to monitor CNN.
Attorney General Rob Bonta has said he prefers selling assets over promises that may be difficult to enforce.
Some politicians and actors are urging him not to accept a settlement.
The agreement would probably need approval from all the states and the Writers Guild involved in the lawsuits.
Paramount faces large financial penalties if the acquisition is delayed or abandoned.
Paramount Skydance’s settlement discussions with California officials reportedly include a promise to remain in California.
Other proposed terms include a CNN editorial board, 30 theatrical releases annually, separate channel-distribution negotiations, and cable-channel sales.
CEO David Ellison and California Attorney General Rob Bonta have participated in talks that have not always included other states or the Writers Guild.
A settlement would likely require approval from all 12 Democratic states suing over the acquisition and the Writers Guild.
Paramount faces $7 million in daily late fees if the deal is not reached by the end of the month and a $7 billion payment if the acquisition fails.
- Who
- Paramount Skydance Corp., California Attorney General Rob Bonta, CEO David Ellison, the 12 Democratic states suing over the acquisition, and the Writers Guild.
- What
- The parties are discussing a possible settlement of litigation challenging Paramount’s proposed acquisition of Warner Bros. Discovery.
- Where
- The talks involve California officials; Paramount is headquartered in New York and has substantial operations in Los Angeles.
- When
- Talks were reported Friday; formally scheduled settlement discussions are set for Oct. 14-15, with a trial not scheduled until March.
- Why
- The discussions aim to resolve the merger lawsuit and avoid potential daily late fees and a $7 billion payment if the acquisition fails.
Settlement Supporters
Settlement Opponents and Skeptics
Whether to settle the merger lawsuit
Settlement Supporters
Paramount has strong financial reasons to reach a workable compromise and is discussing terms with California officials.
Settlement Opponents and Skeptics
Senator Elizabeth Warren and actor Mark Ruffalo have urged Attorney General Rob Bonta not to approve what they view as a weak deal.
Behavioral promises versus structural changes
Settlement Supporters
Possible behavioral terms include a CNN editorial board, 30 annual theatrical releases, and separate negotiations for channel distribution.
Settlement Opponents and Skeptics
Bonta has said behavioral remedies can be difficult to enforce and has expressed a preference for structural measures such as selling assets.
Asset sales as a condition
Settlement Supporters
Selling cable channels or intellectual property could address concerns about the merger, according to the reported discussions and Bonta’s comments.
Settlement Opponents and Skeptics
Some parties do not support all terms under discussion, and opponents have argued that promises and limited changes should not allow the acquisition to proceed.
Key facts
- Proposed California commitment
- Paramount would promise to remain in California.
- Potential theatrical releases
- Paramount could release 30 movies per year in theaters.
- Possible asset sales
- Some cable channels or intellectual property could be sold.
- Settlement approval
- All 12 Democratic states challenging the merger and the Writers Guild would likely need to support a settlement.
- Daily late fee
- Paramount would owe Warner Bros. $7 million per day starting at the end of the month if a deal is not reached.
- Failed-acquisition payment
- A failed acquisition would require Paramount to pay Warner Bros. $7 billion.
- Scheduled trial
- A trial has not been scheduled until March.
Quotes
Rob Bonta
California attorney general involved in the settlement discussions
“cannot confirm or deny whether settlement talks are occurring or their alleged substance.”
livemint.com
Geetha Ranganathan
Bloomberg Intelligence analyst
“Paramount has strong reasons to reach a workable compromise”
livemint.com
Sources
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