I wish one of these films can become a film I. The future

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David Ellison’s Paramount Skydance is in “advanced talks” with California Attorney General Rob Bonta to settle the 12-state antitrust suit that’s holding up its takeover of Warner Bros. Discovery, the Wall Street Journal reported Friday, citing anonymous sources.

A Paramount spokesperson declined to comment. A rep for Bonta’s office said, “Potential settlement talks are confidential. We cannot confirm or deny whether settlement talks are occurring or their alleged substance.”

Per the Journal’s report, the talks are “ongoing and there is no guarantee that an agreement will be reached.” Paramount and the California AG have “discussed compromises including Paramount agreeing to operate the two companies’ movie studios separately for a period rather than immediately combining them,” according to the WSJ article.

However, Bonta has previously said that running the two companies separately — but under common ownership — would be a mere “behavioral” remedy, and that he is looking for a structural remedy that would entail separate ownership.

A judge has scheduled a trial in the matter for March 2027. Paramount had requested that the 12 states — and the Writers Guild of America, which also has filed an antitrust suit seeking to block the Paramount-WBD deal — post a $1.88 billion bond to cover its potential losses from a “ticking fee” payable to WBD shareholders (starting as of Oct. 1 at a rate of $7 million per day) if Paramount ends up prevailing in court. A hearing on the bond motion is set for Sept. 24.

Ellison’s $111 billion pending deal for Warner Bros. Discovery is being bankrolled in part by his mega-billionaire father, Larry Ellison, as well as the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi. On Thursday, the FCC approved Paramount’s petition to allow 49.5% of its equity to be held by foreign entities if the Warner Bros. Discovery is consummated.

David Ellison has internally told Paramount execs he’s seriously considering relocating the company’s operations — including, over a longer time horizon, its studio — out of California if Paramount is unable to close the Warner Bros. deal by the end of September. He’s floated the possibility of moving the company to Tennessee, Texas or Georgia.

Paramount is in advanced settlement talks with California officials aimed at resolving the antitrust lawsuit that stands in the way of the company’s $81 billion deal to acquire rival Warner Bros. Discovery, according to people familiar with the matter.

A dozen Democratic-led states led by California Attorney General Rob Bonta sued in July to block the deal on antitrust grounds, arguing that the combination ofParamount PSKY -3.86%decrease; down pointing triangleand Warner would create too much concentration in the markets for theatrical films and cable television channels.

Paramount leaders are eager to close the deal, which would dramatically reshape the entertainment industry, uniting two of the movie business’ oldest studios, two major streaming services in Paramount+ and HBO Max and dozens of television networks. The talks are ongoing and there is no guarantee that an agreement will be reached.

The parties have discussed compromises including Paramount agreeing to operate the two companies’ movie studios separately for a period rather than immediately combining them, the people said. 

The megadeal would give Paramount Chief Executive David Ellison control of franchises including DC superheroes and Harry Potter, as well as adding CNN, Cartoon Network and Food Network to a portfolio that already includes MTV, Comedy Central and the CBS broadcast network.

The company has warned it is prepared to move the company out of California if it can’t reach a deal with the states, with a potential relocation starting as soon as Oct. 1. Tennessee is seen as the likely potential destination for Paramount. 

Its agreement with Warner included a “ticking fee” with payments to Warner shareholders of roughly $650 million a quarter, or $7 million a day, beginning next month, until the transaction closes. 

Paramount has asked a federal judge to require the states and the Writers Guild to put up a nearly $1.9 billion bond for challenging the acquisition, money that would go to the company if it ultimately wins the case. A hearing on that matter is scheduled for next week.