Paramount Skydance CEO David Ellison is urging 12 state attorneys general to resolve their lawsuit against its pending Warner Bros. Discovery merger as the $110 billion deal has satisfied all regulatory conditions across 68 countries.
“We are grateful that competition authorities in nearly 70 jurisdictions worldwide have independently and thoroughly reviewed this transaction and reached the same conclusion: it is pro-competitive, pro-consumer and pro-worker,” Paramount CEO David Ellison said in a statement. “While we remain confident that the law and the facts are on our side, we have offered commitments and concessions and remain open to working constructively with the State AGs to
find a path forward in the interest of our employees and the creative community in California and across the world – just as we have with the regulators in 68 countries worldwide.”
Paramount argues that an “unwarranted eight-plus month additional delay” for a March antitrust trial will “impose needless costs from penalty fees, litigation expenses and business disruption” and “inflicts harm without benefit” to the 12 states’ own constituents.
Starting Oct. 1, Paramount will be on the hook for a 25 cent per share ticking fee, which translates to a payout of $650 million per quarter or $7 million per day until a deal is closed. The company has agreed to delay the closing of its merger until five days after the outcome of the trial, or June 1, 2027, whichever comes earliest.
Per the terms of the merger, the final deadline for the deal to close is June 4, 2027. If the deal does not close at all due to regulatory matters, Paramount is also on the hook to pay WBD a $7 billion termination fee.
“As a business with many stakeholders, including pension and state retirement funds, Paramount is required to consider how it can absorb the unnecessary additional financial costs while preserving the longer-term strength of the combined company,” the company added. “The better path would be to resolve this through a settlement that would serve the interests of workers, consumers and the consumers in each of the 12 states.”
Ellison’s latest comments come after Paramount Chief Legal Officer Makan Delrahim told a Politico conference on Tuesday that “all options are on the table” to clear the deal. It also comes as Ellison has told theater owners that he would put his 30 theatrical film releases pledge in writing.
While the pair is open to a settlement to resolve the lawsuit and allow the merger to go through, Ellison has also threatened to move the company’s operations out of California if Attorney General Rob Bonta does not come to the table by the Oct. 1 ticking fee deadline.
At the same Politico conference, Bonta called the threat of a move “blackmail” and said that he is open to settlement talks, but that Paramount will have to propose structural remedies, such as divestments, rather than behavioral remedies.
In addition to the 30 theatrical release pledge, Paramount has considered creating an editorial board to oversee CNN to ensure it remains independent under the combined company, but has not been open to an outright sale of the network. Bonta has said that neither the creation of the editorial board nor a CNN sale would be enough on their own to satisfy the states’ concerns.
A spokesperson for Bonta also told TheWrap he remains “committed” to the lawsuit despite a settlement proposal from the Directors Guild of America and International Alliance of Theatrical Stage Employees. That proposal includes conditions such as keeping operation of Paramount and WBD’s film and TV studios and their production, distribution, marketing and exhibition groups separate; keeping HBO available on third-party platforms; and commitments around content licensing, theatrical releases, U.S.-based productions and remaining based in Los Angeles.
“I think they’re eager to enter those talks and we are very happy with where we are,” Bonta said on Tuesday. “We’re confident in our case. We will prepare and be ready to go to trial. And if they, in good faith and sincerely, want to talk about settlement with us, of course we will be open to any proposals they want to propose to us. But right now, we’re focused on litigation and going to trial.”
In addition to the state AGs, the Paramount-WBD merger faces lawsuits from the Writers’ Guild of America and a Paramount shareholder. A group of consumers also filed a lawsuit seeking to block the merger, but it was dismissed.
