Paramount and California AG Set to Meet Monday as Ellison Threat to Leave State Escalates

Paramount Skydance representatives are scheduled to meet with California Attorney General Rob Bonta's office on Monday, August 24, to discuss settling the antitrust lawsuit that's holding up the company's $111 billion takeover of Warner Bros. Discovery. Paramount requested the sit-down, according to The New York Times, which cited four people briefed on the plans.

Since 12 Democratic state attorneys general, led by Bonta, sued in July to block the merger, a judge has already asked both sides to identify magistrates for a mediation process, according to Screen Daily. But nobody involved is promising a deal.

Bonta laid out his terms in a statement to CNN's Brian Stelter: "any potential discussions about the Paramount/Warner Bros. merger will be unproductive absent robust structural remedies on the table that address our concerns." He said the same thing to CNBC's David Faber on Thursday, complaining that Paramount wants to talk about streaming, CNN, and foreign regulators, while his lawsuit is about three specific markets he says the merger would violate.

Structural remedies means divestitures or spin-offs, permanent changes to the corporate structure. That's a much bigger ask than what Ellison has offered so far: a pledge that a combined company would release 30 films a year in theaters. Bonta doesn't think a promise like that is enforceable long-term.

The Ellison exit threat

Puck News first reported that Ellison has developed a five-year plan to relocate most of Paramount's jobs out of California to Georgia, Tennessee, or Texas, regardless of how the lawsuit turns out. The New York Post reported Paramount and its partners are in advanced talks about the Bluebonnet Business Center in Austin, Texas, zeroing in on a 415,000-square-foot facility as a possible new home base.

Ellison has said he'll start moving operations if the case isn't settled by October 1, according to Fox News Digital. Bonta calls that blackmail. "Paramount has lost the plot as it continues to lose in court," he wrote on X, adding that the same threat didn't work "on the eve of our July lawsuit" and won't work now.

The timing matters because of money. A "ticking fee" kicks in October 1 if the deal isn't closed, requiring Paramount to pay Warner Bros. Discovery shareholders roughly $650 million a quarter, according to prior CNBC reporting and confirmed by Screen Daily's estimate of about $7 million a day. If the deal collapses entirely, Paramount owes WBD a $7 billion breakup fee. The antitrust trial isn't scheduled until March 2, 2027, so every month of delay costs real money.

Paramount's lawyers have also filed a legal request asking the plaintiff states to post a $1.9 billion bond by September 30 to cover financial harm from the delay, according to Screen Daily.

Who's calling for a settlement

The pressure campaign is broad and not strictly partisan. Outgoing Governor Gavin Newsom said Friday there's "universal sentiment" for a settlement "if that's possible" and suggested "a lot of conversation" is already happening behind the scenes, per CNN. Los Angeles Mayor Karen Bass held a press conference Thursday saying "it is time for all parties to come to the table," citing stalled productions and idle union workers.

The Directors Guild of America and IATSE, representing roughly 200,000 industry workers, sent a joint letter August 12 to both Bonta and Ellison urging a deal or an earlier trial date. The unions cited worldwide production down 35 to 40 percent, and even more in California, and said they're watching productions get shelved because of the uncertainty. Their letter proposed specific terms: Paramount stays headquartered in Los Angeles, the two studios stay operationally separate, each releases at least 15 theatrical films a year with 45-day theatrical windows before home rental and 120 days before streaming, and HBO stays a paid channel.

AMC, Cinemark, Regal, and Cinema United have all backed the merger and called for settlement too. Xavier Becerra, the Democratic nominee for California governor, said last week he hopes it settles before trial, saying "you get way more done in the conference room than you do in the courtroom."

Not everyone agrees a settlement is the right outcome. Los Angeles City Councilwoman Nithya Raman, who is challenging Bass in the November 3 mayoral race, said she stands with Bonta's lawsuit and called the merger "a bad deal for entertainment workers and a bad deal for Los Angeles." That's a genuine, unresolved policy disagreement: unions want the deal to happen with guardrails, while Raman and some workers argue the consolidation itself is the problem regardless of concessions.

Breitbart reported an unnamed insider accusing Bonta of "trying to kill Hollywood," a characterization Bonta's office has not addressed directly and which remains an opinion, not an established fact.

Monday's meeting will show whether either side is willing to move off its stated position. Bonta wants structural remedies Paramount hasn't agreed to. Ellison wants a settlement or he starts moving jobs to Texas in October. The $650 million quarterly clock starts ticking either way on October 1, whether or not anyone reaches a deal by then.