The war of words between Paramount Skydance and California Attorney General Rob Bonta over the proposed Warner Bros. Discovery merger just took another turn.
Hours after Bonta abruptly canceled a planned Monday meeting with Paramount CEO David Ellison and accused the company of leaking confidential settlement discussions to the press, Paramount has now issued a direct denial.
According to Variety, Paramount said Monday that it was not responsible for leaking details from its discussions with Bonta’s office and remains prepared to continue negotiations.
“Paramount has not been the source of the leaks of any of our confidential discussions with the AG’s office,” the company stated.
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The alleged leak was the central justification Bonta gave for canceling what was supposed to be the first substantive attempt to negotiate a settlement in the multistate lawsuit blocking Paramount’s acquisition of Warner Bros. Discovery.
Now, there are two directly contradictory accounts of what happened — and Bonta has yet to publicly provide evidence establishing that Paramount was actually responsible.
Paramount Pushes Back on Bonta’s Accusation
As we reported earlier Monday, Bonta canceled a scheduled meeting with Ellison after representatives from the two sides participated in a preliminary discussion on Friday.
The California attorney general accused Paramount of violating the confidentiality of those discussions after details of California’s potential settlement demands began appearing in the press.
Bonta claimed Paramount had both leaked and misrepresented what was discussed.
“Not only did Paramount leak the alleged substance of settlement discussions, but they misrepresented these discussions,” Bonta said, according to Reuters.
Paramount Pictures Logo – YouTube, ClosingLogosHD
He then accused Paramount of “playing games” and said his office would be willing to resume discussions once the company engaged sincerely.
Paramount is now disputing that premise entirely.
The company told Variety that it shares Bonta’s concerns about the public discussion and inaccurate reporting surrounding the negotiations but has assured the attorney general’s office that Paramount was not responsible for leaking the confidential information.
Paramount also reiterated that it remains willing to negotiate a resolution to the attorneys general’s lawsuit and argued that the merger would increase competition and entertainment output.
In other words, Paramount didn’t walk away from the table. Bonta did.
So Who Actually Leaked the Information?
That question suddenly becomes much more important.
The controversy erupted after The Wall Street Journal reported that California was expected to demand significant structural concessions from Paramount in exchange for settling the lawsuit.
Among the reported possibilities were requiring Paramount to sell certain cable channels and keeping the Warner Bros. movie studio operationally separate from Paramount’s existing film business.
Those would be enormous concessions and potentially strike directly at some of the strategic benefits Paramount is seeking from the Warner Bros. Discovery acquisition.
Shadow in Sonic the Hedgehog 3 – Paramount
But the fact that confidential information appeared in the press does not, by itself, establish who supplied it.
Bonta publicly placed responsibility on Paramount and canceled Monday’s meeting as a result. Paramount has now categorically denied being the source.
Unless Bonta’s office has evidence connecting Paramount to the disclosure, his accusation remains unfounded.
That’s particularly noteworthy because the canceled meeting was supposed to move the dispute away from a courtroom showdown and toward a potential negotiated solution.
Could CNN Be One of the Cable Assets California Wants Sold?
One major question remains unanswered: Which cable networks does California actually want Paramount to sell?
The Wall Street Journal report that apparently helped trigger Monday’s blowup said Bonta was expected to seek the divestiture of certain cable channels as part of any settlement, but it did not publicly identify which networks California has in mind.
The combined company would own an enormous portfolio.
Paramount already controls networks including CBS-related cable properties, MTV, Comedy Central, Nickelodeon, BET, and others. Warner Bros. Discovery would bring HBO, TNT, TBS, Discovery, Food Network, HGTV, and — perhaps most politically significant of all — CNN.
Source Photo Credit: CNN; YouTube, Bloomberg Podcasts
There is currently no public evidence that Bonta has specifically demanded that Paramount sell CNN. But given everything David Ellison has said about the political opposition to this merger, it’s impossible not to wonder whether CNN could eventually become part of that conversation.
Earlier this month, Ellison made the extraordinary argument that the legal battle against his Warner Bros. Discovery acquisition is not truly driven by antitrust concerns at all.
He claimed it’s about CNN.
Ellison said he believes there’s a much simpler concern underlying the opposition to his acquisition: whether critics trust him to control Warner Bros. Discovery’s cable news network.
“I believe this fight is not really about market share,” Ellison wrote, before pointing directly toward concerns surrounding the news business and his potential stewardship of CNN.
A screenshot from CNN – YouTube, CNN
That’s an astonishing allegation coming directly from the CEO attempting to complete the largest Hollywood merger in history.
Ellison is essentially arguing that Democratic attorneys general are using antitrust law as a weapon because they’re uncomfortable with the possibility that CNN could fall under his ownership.
Bonta has denied that CNN is driving the lawsuit. But even Bonta’s own rhetoric has occasionally wandered into territory far beyond movie ticket prices and cable carriage negotiations.
During the announcement of the lawsuit in July, Bonta warned that the merger could result in “fewer journalists informing the electorate,” according to CNN’s own coverage.
That sounds considerably more political than an argument about whether Paramount and Warner Bros. would possess too much leverage negotiating cable distribution agreements.
A CNN Report on President Trump – YouTube, CNN
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And CNN has already become a sensitive issue surrounding potential settlement concessions.
Earlier this month, speculation emerged that Paramount could potentially divest the network to get the Warner Bros. Discovery deal across the finish line. Paramount responded forcefully.
A source with knowledge of the company’s thinking told TheWrap there was “zero truth” to reports that Ellison was prepared to sell CNN.
“CNN is not for sale,” the source said.
That makes the mystery surrounding California’s reported cable divestiture demand even more interesting.
Perhaps Bonta is looking at overlapping entertainment networks such as TNT, TBS, MTV, or other properties where California believes the combined Paramount-Warner portfolio would become excessively concentrated.
A news broadcast on CNN – YouTube, CNN
That would at least fit neatly within the stated antitrust rationale.
But if CNN eventually appears on California’s list, Ellison’s argument that political concerns are actually driving this lawsuit would suddenly become much harder to dismiss.
After all, Ellison has already publicly identified CNN as what he believes to be the backbone of the political opposition to this transaction.
Now California reportedly wants him to start selling cable networks.
Until Bonta reveals exactly which ones, CNN is going to be the elephant in the room.
There Is Growing Pressure to Reach a Deal
Both sides also have reasons to avoid waiting too long.
Under Paramount’s agreement with Warner Bros. Discovery, delays beyond September 30 can trigger approximately $650 million in quarterly payments — roughly $7 million per day — while the transaction remains unresolved.
Ellison has also warned that Paramount could begin moving operations out of California if the dispute isn’t resolved, while California Governor Gavin Newsom and Los Angeles Mayor Karen Bass have both publicly pushed for the parties to find a solution.
That makes Monday’s collapse particularly remarkable.
California Attorney General Rob Bonta – YouTube, KCRA 3
There was finally an opportunity for Paramount and California to begin negotiating the structural issues at the center of the lawsuit. Instead, Bonta canceled the meeting over an alleged leak.
And while the company says it remains ready to return to negotiations, the next move appears to belong to California’s attorney general.
If Bonta truly wants to settle this dispute in the boardroom, as he has repeatedly claimed, Paramount has just publicly told him that the door remains open.
The question is whether Bonta intends to walk back through it.
Do you think Rob Bonta was right about Paramount leaking information to the press? Sound off and let us know!
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