PSKY in advanced talks to resolve WBD deal antitrust lawsuit – reports

Paramount Skydance (PSKY) and the 12-state coalition suing to block its takeover of Warner Bros Discovery (WBD) are reportedly in advanced talks to find a settlement.

David Ellison

If an agreement is reached, it would enable the David Ellison-led company to finally close its controversial US$110bn deal and take control of WBD.

The Wall Street Journal (WSJ) was the first to report, on Friday, that the two sides are inching towards a settlement that would involve PSKY making some concessions.

California attorney general Rob Bonta, who has spearheaded the lawsuit and a public campaign against the deal, is now pushing for the coalition to settle. The WSJ said talks were at an advanced stage, but cautioned an agreement might not be reached.

Media-focused publication Status subsequently reported that New York and Connecticut were in disagreement with California on how best to settle the suit.

Bonta has been calling for structural remedies that could include selling off some cable networks, independent content monitoring of news network CNN and ironclad commitments on releasing 30 theatrical films a year.

Reports also suggest that under one potential permutation, PSKY could be permitted to close the acquisition (thus avoiding the ‘ticking fee’ that is set to come into effect on October 1) but would be forced to keep the two companies separate until after the lawsuit concludes. In that scenario, the merger would be unwound if a judge ruled that the mega-merger violated antitrust laws.

At the same time as the lawsuit has been active, PSKY has been threatening to relocate its headquarters outside California if the merger is blocked. The industry is divided on whether Ellison is serious in his threat or whether he is simply trying to create leverage to force Bonta into a settlement.

On Sunday, the WSJ reported one concession under discussion would see PSKY committing to production worth US$1.5bn in California.

As it stands, the case is set to go to trial in March 2027.

Reports that the state attorneys general are close to settling has drawn criticism from several quarters, including the Block the Merger Coalition.

In a statement issued on Saturday, the group said a settlement would represent “an insult to everyone who has stood up against this harmful transaction and to the hundreds of thousands of workers, journalists, and consumers who will be hurt if it goes forward. Let’s be very clear: an agreement based only on unenforceable concessions is a win only for David Ellison. It is an L for everyone else.”