PARAMOUNT AND CALIFORNIA IN TALKS TO SETTLE WARNER BROS MERGER SUIT

Paramount and California's attorney general have held advanced discussions over a settlement to resolve a lawsuit challenging Paramount's $110 billion acquisition of Warner Bros Discovery, according to a Wall Street Journal report citing people familiar with the matter. The proposed terms reportedly include a $1.5 billion commitment from Paramount to film and television production within California. A separate report said Paramount had already reached a settlement with California and other states that sued over the merger, describing it as clearing a hurdle to the deal. A spokesperson for California's attorney general told Reuters that settlement talks are confidential and that the office could not confirm or deny whether they were taking place or their substance. Representatives for Paramount Skydance did not immediately respond to requests for comment.

The lawsuit was brought by California alongside 11 other states, which moved in July to block the transaction. State regulators argued that combining Paramount and Warner Bros Discovery would create a dominant media company capable of inflating prices across film and television markets. Negotiators have reportedly discussed requiring Paramount to retain its studio lots and keep its main operations in California. Enforcement mechanisms are also under consideration in case Paramount fails to meet its earlier pledge to produce 30 theatrical films a year after the merger, with penalties potentially forcing it to divest its stake in Miramax, the studio behind "No Country for Old Men" and "Pulp Fiction". Other provisions being weighed include the divestment of certain cable television channels and the creation of an oversight board to protect CNN's editorial independence.

Reuters reported last week that a settlement between Paramount and the states could be finalised as early as this weekend, with terms expected to cover theatrical release guarantees and independent monitoring of CNN. The agreement is described as central to the strategy of Paramount chief executive David Ellison, who views the combination of the two studios and their television assets as crucial to the company's future growth. Accounts of how close the two sides are differ: one report states a settlement has already been reached, while another describes talks as advanced but unresolved, with California's attorney general declining to confirm or deny their status.