By Jody Godoy
Sept 18 (Reuters) – Paramount and states seeking to block its $110 billion acquisition of Warner Bros. could settle as soon as this weekend, with independent content monitoring of CNN among the terms under discussion, sources familiar with the matter told Reuters on Friday.
A commitment on the number of theatrical releases is also among the terms being discussed as part of a settlement, the sources said.
Paramount’s shares rose nearly 7% after markets closed. Warner Bros. Discovery shares were up 8.4% in after-market trading.
The case brought by California and 11 other states is one of the final hurdles to Paramount’s bid to become a major rival of Netflix and Disney. A settlement this week could help Paramount avoid paying millions of dollars in fees to Warner Bros. shareholders.
A spokesperson for the California Department of Justice said potential settlement talks are confidential. “We cannot confirm or deny whether settlement talks are occurring or their alleged substance,” the spokesperson said.
Paramount declined to comment.
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, as he and others in Hollywood wrestle with a decades-long market erosion.
The combination would unite a raft of valuable media properties, including CNN, HBO, “Harry Potter,” “The Daily Show,” and rights to NFL football games.
Paramount is on the hook to pay $7 million a day “ticking fee” to Warner Bros. shareholders each day after September 30 until the deal closes. The sweetener was meant to signal confidence to Warner investors.
Trump administration regulators cleared the deal, but in July the states sued to block it, arguing the combined company would create a media behemoth with the power to raise prices in movies and television.
The Writers Guild of America has also sued to stop the transaction, arguing it would decrease pay and worsen working conditions for film and television writers.
A WGA spokesperson did not immediately respond to comment on whether the union is part of talks with Paramount and the states.
Other potential settlement terms could not be immediately determined. California Attorney General Rob Bonta has said that structural remedies, which include selling off parts of a business, are more effective to protect competition than companies promising to take specific actions.
Ellison has previously vowed that the combined film studios would release 30 movies a year.
Lawmakers have criticized Ellison for tailoring news coverage at Paramount-owned CBS News to favor President Donald Trump. Critics fear how he would manage Warner’s CNN once it comes under his ownership.
(Reporting by Jody Godoy and Edmund Lee in New York; Editing by Chris Reese and Sam Holmes)
Comments