Settlement negotiations between Paramount Global and a coalition of state attorneys general have temporarily stalled as several officials argue for more stringent restrictions on the proposed Warner Bros. Discovery acquisition. Although California Attorney General Rob Bonta appears ready to accept the current framework, counterparts from New York and Connecticut are pushing for enhanced conditions prior to lending their support.
The twelve-state legal challenge, spearheaded by California, seeks to enjoin Paramount Skydance’s takeover of Warner Bros. Discovery on antitrust grounds. Discussions over the weekend focused on potential compromises, including Paramount’s agreement to run Warner Bros.’ studio division independently for a transitional period—a concession Paramount CEO David Ellison has previously signaled he would make. Additionally, the merged entity would be required to release a minimum of thirty theatrical films annually, with financial penalties attached to missed targets, a commitment Ellison has also reaffirmed.
Further terms under consideration involve a binding pledge that Paramount will not move its California-based operations, addressing concerns raised by Ellison’s past threats to relocate. The states also sought the appointment of an independent editorial advisor to monitor the independence of CNN and CBS News. However, sources indicate this measure may be insufficient for some critics.
New York Attorney General Letitia James is reportedly advocating for concrete job-protection guarantees for Warner Bros. employees. This demand arises from Paramount’s projection of $6 billion in synergies following the merger, a figure that implies significant workforce reductions. Meanwhile, Connecticut Attorney General William Tong opposes the existing terms, reportedly seeking stronger legal mechanisms to ensure CNN and CBS News remain free from ownership interference than what the proposed advisory role would provide.
The litigation follows a year-long struggle for Paramount, which originally had to compete against Netflix for the Warner Bros. Discovery assets before the streaming giant withdrew in February. While the Department of Justice and the Federal Communications Commission have cleared the transaction without imposing remedies—an approach noted as unusual for a horizontal merger of this magnitude—the state-level lawsuit and a separate antitrust suit by the Writers Guild of America West remain the final hurdles.
Ellison has characterized the opposition as politically motivated, linking it to his family’s proximity to President Donald Trump and asserting that the true concern among regulators is his stewardship of CNN’s news division. In a recent op-ed, he maintained that journalists at both CNN and CBS News would continue to serve the public rather than any political party.
Following a temporary restraining order issued in July, Connecticut’s Attorney General Tong hailed the move as a win for competition, independent journalism, and industry workers, criticizing the federal government for failing to act. New York’s Attorney General James echoed these sentiments, warning that the merger would eliminate historic competition between the two studios and create undue concentration of power over global entertainment and news.
Even if a settlement is reached with the state officials, the transaction is not expected to close immediately. Due to the complexity of the $110 billion deal, which involves $24 billion in funding from Middle Eastern government entities, Paramount and Warner Bros. Discovery anticipate needing at least a week to finalize the acquisition after any legal impediments are removed.
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