Paramount, California A-G reported to discuss concessions in deal that would clear hurdle for Warner Bros. merger

Paramount PSKY-Q and California’s attorney-general have discussed a range of concessions in advanced settlement negotiations, including a US$1.5-billion investment in production in the state, the Wall Street Journal reported Sunday, citing people familiar with the talks.

The case brought by California and 11 other states is one of the final hurdles to Paramount’s proposed US$110-billion acquisition of Warner Bros. Discovery. WBD-Q

The states sued in July to block the deal, arguing the combined company would create a media giant with the power to raise prices in movies and television.

Among the concessions discussed beyond the sizable production investment is a commitment not to sell either studio lot and to remain in California, the WSJ report said.

The parties have also discussed potential penalties if Paramount fails to honour an earlier pledge to produce 30 movies a year after the merger, including divesting its stake in Miramax, known for films such as No Country for Old Men and Pulp Fiction, the report added.

Other measures under consideration include selling some cable channels and creating a board to help ensure CNN retains editorial independence, the report said.

“Potential settlement talks are confidential. We cannot confirm or deny whether settlement talks are occurring or their alleged substance,” a California AG spokesperson told Reuters in a statement. Paramount Skydance did not immediately respond to a request for comment outside regular business hours.

Reuters reported last week that Paramount and the states could settle as soon as this weekend, with independent content monitoring of CNN and a commitment on theatrical releases among the terms under discussion.

Paramount CEO David Ellison has staked his company’s future on what he sees as a necessary bid to consolidate two of Hollywood’s biggest studios and unite a wide range of TV properties.