Federal regulators cleared the $110B deal, while competing California studies warn of job losses under either outcome.
California Attorney General Rob Bonta’s effort to block Paramount Skydance’s $110 billion takeover of Warner Bros. Discovery faced fresh scrutiny Tuesday after the Justice Department backed Paramount’s demand that the states challenging the deal post a bond covering potential losses from the delay, as the two sides simultaneously agreed to settlement talks next month.
The federal government’s intervention adds another point of disagreement between Bonta and the Justice Department, whose Antitrust Division conducted its own review before closing its investigation of the merger in June.
“The transaction is not likely to result in harm to competition or American consumers,” the Justice Department said after reviewing streaming, linear television and theatrical film markets.
Bonta has reached a different conclusion. His 12-state lawsuit filed in July alleges the combination would eliminate competition between two of Hollywood’s five major film distributors and two of the five largest basic cable channel owners. The states say the combined company would control nearly one-third of U.S. theatrical motion pictures and basic cable programming.
Bonta said when announcing an agreement that delayed the merger that excessive corporate concentration would ultimately hurt consumers.
“When too few corporations have too much power in markets central to American life, it makes things more expensive, and it makes things worse,” Bonta said.
The immediate legal fight now centers on Paramount’s request for a $1.88 billion bond. The company says it will begin owing Warner Bros. shareholders about $7 million per day if the transaction remains unfinished after Sept. 30 and could accumulate $1.3 billion in unrecoverable “ticking fees” by the time the case concludes next spring.
The Justice Department told the California federal court Tuesday that plaintiffs seeking an injunction under federal antitrust law should be required to post a “proper bond” covering potential damages if the order is later overturned. A hearing is scheduled for Sept. 24.
Bonta’s office has challenged that reasoning, contending Paramount voluntarily accepted both the ticking-fee arrangement and an agreement not to close the transaction while litigation proceeds.
“We believe Paramount’s motion has no merit and look forward to presenting our case in court at the September 24th hearing,” Bonta’s office said.
Paramount has separately accused Bonta of undercutting that position by describing the voluntary pause in television interviews as equivalent to an injunction — an argument the company says strengthens its demand for a bond. Bonta’s office disputes Paramount’s motion.
The standoff carries competing economic risks for California. A leaked Paramount-commissioned analysis estimated that a complete relocation of the company from California could eventually eliminate between 28,990 and 57,980 full-time jobs statewide and $10.6 billion to $21.2 billion in annual economic output.
But a separate Los Angeles County-commissioned study provides support for Bonta’s concerns about consolidation. It estimated that combining Paramount and Warner Bros. could expose roughly 4,500 direct film and television jobs and 10,360 total job-years to losses in Los Angeles County over three years. The county cautioned that the estimates are not forecasts of announced layoffs.
The next attempt at resolving the dispute is now set. A Tuesday court filing scheduled Paramount, Bonta’s office and the Writers Guild of America for in-person settlement talks Oct. 14 and 15 before U.S. Magistrate Judge Thomas Hixson. Bonta’s office said the conference is “standard course” and “does not indicate that a settlement is in progress.”
Bonta has maintained that any agreement would require structural changes, potentially including divestitures, rather than Paramount’s behavioral commitments, such as pledging to release 30 theatrical films annually. The antitrust trial is currently scheduled for March 2027.
