California Attorney General Rob Bonta has abruptly canceled a highly anticipated meeting with Paramount Skydance over its proposed acquisition of Warner Bros. Discovery, accusing the entertainment giant of negotiating in bad faith and “playing games.”
The stunning reversal comes just days after Bonta publicly indicated that he was willing to negotiate a potential settlement—and less than 24 hours after reports indicated that the two sides would sit down Monday in an attempt to resolve the antitrust lawsuit currently preventing the massive merger from moving forward.
Now, Bonta is the one walking away from the negotiating table.
According to Reuters, Bonta canceled Monday’s scheduled meeting late Sunday after accusing Paramount of leaking information concerning preliminary discussions held Friday.
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The California attorney general’s office reportedly viewed the leak as evidence that Paramount was not negotiating in good faith.
Bonta subsequently told The New York Times that talks could resume if Paramount stops “playing games.”
It’s an extraordinary escalation in what was supposed to be the first meaningful opportunity for the two sides to find an off-ramp from an increasingly ugly legal and political battle.
Bonta Cancels Talks Just Days After Saying He Was Willing to Negotiate
The timing is particularly noteworthy.
On Friday, Variety reported that representatives for Paramount and California were scheduled to meet Monday to discuss a possible settlement.
That development followed weeks of increasingly hostile rhetoric between Paramount CEO David Ellison and Bonta.
Bonta has maintained that Paramount’s proposed acquisition of Warner Bros. Discovery would harm competition. His office is leading a coalition of 12 attorneys general that sued in July to block the transaction.
Paramount Pictures Logo – YouTube, ClosingLogosHD
In announcing the lawsuit, the California Attorney General’s Office argued that combining Paramount and Warner Bros. would reduce competition across theatrical film distribution, cable television, and employment within the entertainment industry.
But despite that opposition, Bonta had publicly left the door open to a negotiated settlement.
California Gov. Gavin Newsom also recently signaled his support for negotiations. The Hollywood Reporter reported Friday that Newsom supported settlement discussions surrounding the lawsuit.
That made Monday’s scheduled meeting potentially significant.
Instead, it won’t happen.
Bonta Claims Paramount Leaked Details of the Negotiations
According to Reuters, Friday’s preliminary meeting was intended to establish the groundwork for Monday’s more substantive discussions.
But details of California’s potential demands quickly became public.
On Sunday, Reuters, citing reporting from The Wall Street Journal, reported that Bonta was expected to seek significant structural concessions from Paramount.
Among those potential demands were the sale of certain cable television channels and maintaining separation between Paramount’s and Warner Bros.’ movie studio operations.
Then came Bonta’s accusation.
California Attorney General Rob Bonta – YouTube, KCRA 3
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The attorney general reportedly concluded that Paramount was responsible for leaking information about the discussions and canceled Monday’s meeting.
That creates an almost surreal situation.
For weeks, Bonta has criticized Paramount for allegedly refusing to meaningfully negotiate. Paramount has responded by publicly urging Bonta and the other attorneys general to come to the table.
The two sides finally scheduled negotiations. Then Bonta canceled them before the substantive meeting could even begin.
Whatever one thinks about the merits of California’s antitrust case, Bonta can no longer simply claim Paramount refuses to negotiate without acknowledging that his office just canceled a scheduled negotiating session.
California Reportedly Wants Paramount to Sell Assets
The reported demands themselves also demonstrate just how far apart the two sides remain.
According to The Wall Street Journal, California is seeking structural changes that could include divesting cable channels and keeping the Warner Bros. movie studio independent from Paramount’s existing film operation.
Bonta had already made clear that relatively minor promises from Paramount would not satisfy him.
He has demanded what he described as “robust” concessions capable of addressing California’s underlying antitrust concerns.
David Ellison in an interview with Bloomberg – YouTube, Bloomberg Podcasts
That appears to put Bonta at odds with Paramount’s position that the merger has already survived enormous regulatory scrutiny.
Paramount CEO David Ellison has said the transaction has satisfied regulatory requirements across 68 countries, while the merger has received approval from the U.S. Department of Justice and European regulators.
California and the other states remain the largest obstacle standing between Paramount and the completion of the Warner Bros. acquisition.
And time is increasingly becoming a factor.
Paramount Has Threatened to Leave California
Ellison has dramatically increased the pressure on Bonta in recent weeks.
As previously reported, the Paramount CEO has threatened to begin moving operations out of California if the states refuse to reach a settlement.
Variety reported that Ellison warned Paramount could begin pulling operations out of the state starting October 1 if meaningful negotiations do not occur.
The threat infuriated Bonta.
The logo for Paramount Skydance – Paramount
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He publicly accused Paramount of attempting to “blackmail” California into abandoning its lawsuit.
But Paramount’s threat is particularly potent given the ongoing problems facing California’s entertainment industry and the potential economic consequences of losing even more entertainment jobs.
And Paramount has another reason to circle October 1 on the calendar.
The Clock Is Ticking on Paramount
The longer this fight continues, the more expensive it could become.
Paramount has asked the court to require the states and Writers Guild of America to post a staggering $1.88 billion bond related to potential damages caused by delaying the merger.
According to Axios, Paramount argues that it could incur approximately $1.3 billion in unrecoverable “ticking fees” as the litigation drags on.
Those fees are expected to begin October 1 and amount to roughly $7 million per day.
Paramount Skydance CEO David Ellison being interviewed – YouTube, CNBC Television
Bonta responded to the bond request by again accusing Paramount of attempted “blackmail,” arguing that the company willingly agreed to the terms of its merger agreement and the associated financial penalties.
But regardless of who is ultimately responsible for those costs, the financial pressure creates an obvious incentive for Paramount to resolve this dispute sooner rather than later.
Which makes Bonta’s decision to cancel Monday’s meeting even more significant.
Bonta Can’t Have It Both Ways
There are legitimate antitrust questions surrounding the combination of two companies as enormous as Paramount and Warner Bros. Discovery. California is entitled to raise those concerns, pursue its lawsuit, and demand concessions it believes are necessary to protect competition.
But Bonta’s public messaging is becoming increasingly difficult to square with his own actions.
He has blasted Paramount for threatening to leave California and seeking a massive bond, while also accusing the company of refusing to negotiate in good faith.
Yet when the two sides finally arranged a meeting specifically intended to explore a settlement, Bonta canceled it over an alleged leak concerning what California planned to demand.
The Hollywood Sign – Photo Credit: Thomas Wolf, www.foto-tw.de, CC BY-SA 3.0 <https://creativecommons.org/licenses/by-sa/3.0>, via Wikimedia Commons
Perhaps Paramount leaked the information. Perhaps Bonta has legitimate reasons for being furious about it.
But if the ultimate objective is protecting California workers and consumers while resolving legitimate competition concerns, walking away from the negotiating table hardly moves anyone closer to that goal.
And the stakes extend far beyond a corporate boardroom.
California’s entertainment industry continues to struggle with production leaving the state, while Paramount is openly threatening to take even more operations and jobs elsewhere.
Meanwhile, Paramount faces enormous financial penalties if the merger remains stalled.
Logos for Paramount Skydance and Warner Bros. – Paramount, WB
A trial is currently scheduled for March 2027. There is therefore every reason for both sides to negotiate.
Instead, the California attorney general has taken a dispute that appeared to finally be moving toward possible compromise and thrown another grenade into it.
For all of Bonta’s complaints about Paramount “playing games,” Monday morning was supposed to provide an opportunity to stop playing them and start negotiating. Yet Bonta canceled the meeting.
How do you feel about Rob Bonta cancelling the Paramount meeting? Sound off and let us know!
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