Paramount has reached a settlement with California Attorney General Rob Bonta over a multi-state antitrust lawsuit, paving the way for its massive $81 billion Warner Bros. Discovery merger, according to sources.
By approximately 10:20 a.m. ET, shares in Paramount and Warner Bros. Discovery jumped 6.6% and 9.8%, respectively, after reports that advanced settlement talks over the weekend had been successful.
The settlement terms include a commitment to release 30 movies a year; a multiyear pledge to remain in California, after previously threatening to exit; and independent editorial boards for CBS News and CNN, sources told The Post.
The Wall Street Journal had reported on several possible concessions, including a $1.5 billion investment in California production and a possible penalty if Paramount doesn’t deliver on its 30-film promise, including the sale of Miramax, home to classics like “Pulp Fiction.”
Sources told The Post the deciding factor in the settlement was New York Attorney General Letitia James coming to the table. James – who is up for re-election in New York – represents thousands of New Yorkers who work for Paramount and Warner Bros.
Massachusetts, Connecticut and Minnesota had also opposed the deal, but the holdouts ultimately decided the cost of the legal battle wasn’t justifiable if California wasn’t also on board, according to Bloomberg.
Paramount and Bonta did not immediately respond to The Post’s requests for comment.
President Trump’s Department of Justice in June greenlit the deal, which would combine HBO Max, Paramount+, HBO, CBS, CNN and thousands of movie titles under one company led by David Ellison, the son of Oracle billionaire and Trump ally Larry Ellison.
In July, 12 state attorneys general, led by Bonta, filed an antitrust suit to block the deal, alleging it would lead to higher prices for consumers, less content for film and television and fewer jobs.
The Writers Guild of America also sued to kill the merger, arguing the deal would eliminate jobs for Hollywood screenwriters.
In recent days, Bonta had been rushing to reach a deal out of court, concerned that Paramount could follow through on its threats to leave the state – taking with it thousands of jobs and roughly $21 billion in annual economic output.
Without a settlement, the case was set to go to trial in California next March, delaying and potentially killing the deal altogether since a costly “ticking fee” kicks in Oct. 1.
The fee, which was wrapped into the deal agreement, meant Paramount would need to pay Warner shareholders roughly $650 million a quarter – or $7 million a day – until the deal is closed.
Paramount had asked a federal judge to force the states and the Writers Guild to supply a roughly $1.9 billion bond that will go to the company if it ultimately wins against the lawsuit.
Though Bonta had been leading the lawsuit campaign, other top officials in California have been pressuring him to reach a deal over the potential risks if the deal falls apart.
California Governor Gavin Newsom reportedly warned that state employment could suffer if the deal is blocked in court, while Los Angeles Mayor Karen Bass said last week that she’s “going to fight like hell” to protect production in the city.