Less than 24 hours after The Wall Street Journal reported that California Attorney General Rob Bonta was expected to meet with Paramount on Monday to discuss a settlement of the ongoing antitrust lawsuit brought by California and 11 other states over Paramount’s proposed acquisition of Warner Bros. Discovery, Bonta has reportedly canceled the meeting, citing details of the talks leaking to the press.
Sunday evening, the Journal reported that Bonta would request Paramount divest in “some” cable channels and commit to keeping its movie studio separate from Warner Bros. as conditions of settling the antitrust suit. The two sides met on Friday to discuss an agenda for the Monday meeting.
On Monday morning, Bonta accused Paramount of failing to “maintain the confidentiality” of the Friday meeting, per the Journal. “Not only did Paramount leak the alleged substance of settlement discussions, but they misrepresented these discussions, demonstrating a lack of good faith,” Bonta said. “As soon as Paramount stops playing games and engages sincerely, my office is happy to meet again.”
In response, Paramount issued a statement claiming they were not the source of any leaks.
“We share AG Bonta’s concerns about the public discussions and misreporting that has surrounded this deal,” the statement read. “As we have assured the Attorney General’s office, Paramount has not been the source of the leaks of any of our confidential discussions with the AG’s office.”
Paramount is facing significant financial pressure to settle within the next month. On Oct. 1, the company will begin paying daily “ticking fees” to Warner Bros. Discovery shareholders until the deal is finalized. A trial in the antitrust case will not be heard until next spring, meaning Paramount would be on the hook for over $1 billion in these fees should the case reach trial. If, for whatever reason, the deal is not finalized, Paramount would owe Warner Bros. Discovery a $7 billion breakup fee.
Bonta’s decision to cancel talks might not be all that surprising. Even when negotiations were scheduled to take place on Monday, a source told the Journal that it was “doubtful” any significant progress would be made during the meeting. For Paramount, divesting even some of its cable networks would be a huge financial blow, as the company will rely on the still-significant cash flow from those networks to finance its purchase of Warner Bros. Discovery.
It is unclear which cable networks Bonta would want Paramount to divest in this hypothetical settlement scenario. For sports fans, Paramount owns the CBS Sports Network cable channel, while Warner Bros. Discovery owns TNT, TBS, and truTV.
About Drew Lerner
Drew Lerner is a staff writer for Awful Announcing and an aspiring cable subscriber. He previously covered sports media for Sports Media Watch. Future beat writer for the Oasis reunion tour.