Paramount (PSKY) Stock: California Cancels Merger Talks After Accusing Company of Bad Faith

TLDR

• California AG Rob Bonta canceled Monday’s planned settlement talks with Paramount over its Warner Bros. Discovery merger
• Bonta accused Paramount of leaking and misrepresenting settlement discussions, citing a lack of good faith
• The meeting was meant to explore fixes like cable channel divestitures and keeping the movie studios separate
• California and 11 other states sued in July to block Paramount’s acquisition of Warner Bros. Discovery
• Bonta said talks could resume once Paramount “stops playing games”

Paramount (PSKY) is back in legal limbo after California Attorney General Rob Bonta pulled the plug on Monday’s planned settlement talks, accusing the company of leaking details of private discussions and misrepresenting them publicly.

Paramount Skydance Corporation Class B Common Stock, PSKY

“Not only did Paramount leak the alleged substance of settlement discussions, but they misrepresented these discussions, demonstrating a lack of good faith,” Bonta said in a statement reported by the New York Times.

The meeting had been set up to explore whether Paramount could satisfy California’s antitrust concerns before the state signed off on its merger with Warner Bros. Discovery (WBD).

Going into Monday’s talks, California was expected to push for Paramount to sell off some cable channels and commit to keeping its movie studio separate from Warner Bros., according to the Wall Street Journal.

Lawyers from both sides had met Friday to set the agenda, with cable TV and the motion-picture business both on the table.

The Lawsuit Background

California filed suit in July, alongside 11 other states, to block Paramount’s acquisition of Warner Bros. Discovery. The deal was initially reported as valued at $110 billion, though other reports put the figure at $81 billion.

The states argue the merger would hurt competition in film distribution and cable TV, raise prices for consumers, and push down wages for workers in the industry.

Paramount has pushed back, saying the deal would actually increase output. CEO David Ellison has pledged the combined studios would release 30 movies per year.

The states have called that commitment unenforceable.

Where Things Stand

Monday’s meeting was described as preliminary, meaning no final settlement was expected even if it had gone ahead.

Bonta made clear the door is not fully closed. He said talks would be rescheduled once Paramount “stops playing games” and shows sincerity.

Paramount and Warner Bros. Discovery declined to comment when contacted by Reuters. The California AG’s office did not respond outside regular business hours.

The breakdown leaves the antitrust lawsuit firmly in place, with no settlement path currently active.

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